Alibaba sees growth in AI virtual avatars

  • March 5, 2024
  • Steve Rogerson

Chinese tech giant Alibaba is seeing a massive increase on its ecommerce platform in the use of virtual avatars powered by artificial intelligence (AI).

For example, its Taobao ( online shopping platform saw more than ten million people try its AI driven chatbot in the first four months since it installed it in September last year.

“Consumers rely on different kinds of tools to help them justify their buying decision, so AI is therefore very influential in terms of consumer decision-making,” said Herbert Yum, a research manager at consultancy Euromonitor International.

China’s digital avatars come in various guises, from sign-language translators to TV actors to social media influencers. On Alibaba Group’s Tmall ( ecommerce platform, they wear the hat of a sales associate and can be summoned at a click to answer shoppers’ questions. This, says Alibaba, is a far cry from the chatbots that appear on the bottom right of the screen, regurgitating options menus while the user smashes keys trying to reach a human.

These highly customisable chatbots have a face – wide-eyed, rosy-cheeked and wearing overalls, in the case of multinational health and wellness company Holland & Barrett’s Tmall store.

“To be competitive on Tmall, a brand needs to be using the latest technology and, right now, that’s virtual avatars,” said Joanna Zhou, China commercial manager at Holland & Barret ( The company deployed this feature last year.

The avatar puts a traditional chatbot, which pulls data from a database of questions and answers, in the skin of an animation to engage and communicate with shoppers. The global market for digital avatars will be worth over $682bn by 2032 at a CAGR of 47.1%, according to research company Vision Research Reports. This growth is outpaced by the 51.3% rise expected in the Asia Pacific region over the same time frame, the research firm predicted.

In China, many retailers are paving the way. Some 12% of shoppers in the country reported interacting with a virtual customer service agent for complaints or product questions, compared with 10% worldwide, a 2023 study by consultancy PwC found.

AI-powered digital assistants and avatars do not necessarily replace real people; often they complement and enable live employees to serve consumers better. On Holland & Barrett’s Tmall store, human livestreamers and their virtual counterparts run a daily relay race, passing insights and data from one side to power the other, according to Zhou.

For a couple of hours every day, the wellness company employs people to stream demos, share information about new products, and answer consumer queries.

“When there are real people livestreaming, they collect questions and see what consumers are asking, and then give that information to the bots,” she said.

Chatbots take over the rest of the time, and many shoppers who visit the store during non-peak hours will be assisted by the Holland & Barrett avatar. There are many perks to having a digital colleague. The virtual creation works around the clock, analysing sales data and other online activities.

“The words avatar and AI make people sit up in their chairs,” said Zhou. “But in terms of actual implementation in the retail space, it’s really very broad.”

Kaifu Zhang, vice president at Alibaba, added: “AI has emerged as a powerful catalyst, enabling businesses to amplify their strengths and minimising hurdles such as language and cultural barriers.”

The company said in November it was piloting Aidge, its first AI-powered suite of application programming interfaces.