The performance of virtual hosts in terms of gross merchandise volume, average view duration, number of viewers and transaction rates is better than that of human hosts, he said.

"However, under current technical conditions, the digital anchors can't totally replace real humans as it is difficult for the former to establish trust with fans," Tao added.

Ping Xiaoli, vice-president of Chinese tech heavyweight Baidu Inc and general manager of Baidu's e-commerce business, said compared with humans, the biggest advantage of digital avatars is that they can greatly cut operating costs of livestreaming for merchants, and work 24 hours a day without coffee and restroom breaks, pushing up sales of products.

Baidu has rolled out its digital avatar platform Xiling, which provides a complete set of services for the creation and operation of virtual hosts, virtual celebrities and virtual brand spokespersons for clients in fields like broadcasting, television, internet, finance and retail.

"An increasing number of brands are looking to use virtual beings in livestreaming and other marketing campaigns, which will help enterprises reduce at least 50 percent of costs by cutting spending on brick-and-mortar livestreaming locations, hardware equipment and hiring human anchors," said Li Shiyan, head of Baidu's digital human and robotics section.

However, the virtual human industry is still in an early stage of development and there are some challenges, such as how to produce low-cost digital assets and digital content, and how to make digital humans interact with real people more naturally, Li said.

The use of virtual hosts in livestreaming sessions can bring a feeling of freshness to users, while brand owners can attract new consumers via this innovative method, said Mo Daiqing, a senior analyst at the Internet Economy Institute, a domestic consultancy.

Mo said AI-powered digital humans in livestreaming can help improve operating efficiency, enhance consumer shopping experience and promote the development of livestreaming e-commerce industry.

Moreover, virtual humans can play a pivotal role in finishing tedious and repetitive tasks, thus allowing human hosts to devote more time to creative work. However, they will not fully replace real human hosts, Mo added.

Pan Helin, a member of the Expert Committee for Information and Communication Economy, which operates under the aegis of the Ministry of Industry and Information Technology, said he is optimistic about the business prospects of virtual humans in the e-commerce livestreaming segment.

Pan called for more efforts to improve 3D modeling, rendering and motion capture technologies to bolster development of the country's virtual human sector.

Thanks to technological advancements in AI, digital avatars bearing a close resemblance to real humans in appearance and behavior have been put into service not only in livestreaming e-commerce, but also in a wide range of other segments, such as entertainment, education, fashion, culture and tourism.

Chinese AI pioneer Xiaoice, SenseTime and tech giant Huawei Technologies Co have jumped on the digital human bandwagon. For instance, Xiaoice developed Cui Xiaopan, the first virtual employee of Chinese real estate developer Vanke. The digital human is in charge of reminding employees to pay the company's bills on time and collect bills due.

"Although the digital avatar segment is still nascent, the appearance, gestures and actions of digital humans will be more refined and closer to that of real humans," said Yu Jianing, executive director of the metaverse industry committee at the China Mobile Communications Association, a Beijing-based industry association.

Yu said the accelerated application of 5G and the research and development of 6G — the next-generation wireless technology — will fuel the digital human industry. Virtual humans will become more intelligent and be able to give personalized feedback based on real-time information as a result of technological advancements in AI, he added.

Currently, digital humans have already shown clear commercial value in a number of fields, said Lu Yanxia, research director at market consultancy IDC China, adding that there will be large-scale teams of digital humans coexisting with humans in life and at workplaces in the future.

Chen Duan, director of the Digital Economy Integration Innovation Development Center at the Central University of Finance and Economics, said new problems in the digital human industry have also emerged, such as ethics, data security and personal privacy protection.

More efforts are needed to formulate relevant laws and regulations on the ownership of digital characters and standardization of their behaviors, while all parties engaged in the digital human industry should strengthen cooperation to prevent potential legal and ethical risks in advance, Chen said.