China’s ‘Lipstick King’ confronts slower growth, AI disruption in livestream shopping

By Casey Hall and Xihao Jiang

SHANGHAI, Sept 24 (Reuters) – For nearly a decade, China’s “Lipstick King” has been the face of the livestream shopping industry, helping to grow a niche format into one of the country’s most important retail channels.

Now, despite slowing growth and artificial intelligence reshaping the sector, Li Jiaqi, famed for selling billions of dollars worth of beauty products to more than 100 million followers, bets it will still depend on people like him.

“Growth may not be as explosive as it was four or five years ago,” said Li, who began livestreaming in 2016, but he added that the sector had moved into a “stable and healthy phase”.

The industry is grappling with a weaker consumer environment, where retail sales rose just 0.4% in August on the year, down from July’s 0.6%, while growth of 1.1% over the first eight months of 2026 reflected sluggish household spending.

Yet livestreaming has reshaped China’s shopping habits, with online retail sales exceeding 36% in 2025, up from less than 18% in 2021.

“It is still growing, but the growth is a lot more difficult,” said Ashley Dudarenok, founder of digital consultancy Chozan.

“Merchants need to compete a lot harder for customers’ wallets … and the expectations of customers are as high as ever, but the budgets are lower.”

ARTIFICIAL INTELLIGENCE HELPS TO CUT COSTS

Against that backdrop, AI is rapidly lowering costs.

E-commerce platforms and merchants are increasingly deploying digital hosts that can stream around the clock at a fraction of the cost of human presenters, raising questions about how much of the workforce will remain essential.

JD.com made its AI hosting service free to merchants in December 2025 and said adoption surged within three months. AI hosts can reduce livestream operating costs by 80% to 90%, it added.

“AI is already changing the livestream e-commerce industry,” Li said. “We’ve been studying how to integrate AI into livestream commerce.”

But the technology has limits, he argued.

“I don’t believe AI can replace human hosts,” he said. “AI is always yesterday’s version of me, while today’s version of me can offer new ideas and new perspectives.”

He sees AI as a tool that can improve efficiency rather than replace presenters, allowing an AI version of himself to keep viewers company overnight while he rests.

He was even more sceptical about AI’s ability to influence buying decisions.

“Human beings are constantly thinking. AI is thinking too, but its thinking is based on previous human thinking,” he said. “That’s why I see AI and livestream e-commerce as complementary. AI won’t replace human hosts.”

Others in the industry share that view.

Digital presenters still struggle to replicate the trust and judgement that drive sales, said Lu Lin, a 23-year-old host at livestreaming agency Romomo based in the commercial hub of Shanghai.

To a shopper who specifies height and weight, she said, “AI might respond, ‘You should wear size M or size L.’ But a human host would say something more nuanced. It’s not just about answering the question. It’s about building trust with customers.”

The debate is also playing out among regulators and consumers. Rules for clear labelling of AI-generated content took effect in September 2025, while ByteDance-owned Douyin – China’s version of TikTok – has banned fully AI-generated livestreams and requires disclosure of the use of digital hosts.

Backlash has greeted some influencers who revealed that AI avatars were appearing in their place.

“I think a human livestreaming host is sort of an endangered species, but it depends,” Dudarenok said, adding that as AI-generated content becomes more common, consumers may gravitate back toward the authenticity of human hosts.

“I don’t think they’re going to disappear completely, but the less successful hosts … they will have to use better tools or change occupations.”

Profitability has become a priority for brands, said Zhang Junling, vice president of Romomo, as the industry moves beyond the discount-driven model that fuelled early growth.

As margins tighten, dependence on celebrity hosts is dwindling, with fierce competition making large-scale systems, technology, and operational capabilities more critical, he said.

“Competition is no longer simply between individual livestream channels or individual hosts,” Zhang added.

(Reporting by Casey Hall and Xihao Jiang in Shanghai; Editing by Clarence Fernandez)