China's livestream shopping enters slower, AI-shaped phase, says 'Lipstick King' Li Jiaqi

China's livestream shopping industry is settling into a slower, more mature phase after years of explosive growth, according to Li Jiaqi, the superstar presenter known as the "Lipstick King" who has helped build the format into a major retail channel over nearly a decade.

Li, who began livestreaming in 2016 and has sold billions of dollars worth of beauty products to more than 100 million followers, said growth may no longer match the pace of four or five years ago, but the sector has moved into what he described as a stable and healthy phase.

The broader retail backdrop remains weak. Retail sales rose just 0.4% year-on-year in August, down from 0.6% in July, while growth of 1.1% over the first eight months of 2026 pointed to sluggish household spending. At the same time, online retail sales exceeded 36% in 2025, up from less than 18% in 2021, reflecting how deeply livestreaming has reshaped shopping habits.

"It is still growing, but the growth is a lot more difficult," said Ashley Dudarenok, founder of digital consultancy Chozan, noting that merchants must compete harder for customer wallets as expectations remain high but budgets shrink.

Against this backdrop, artificial intelligence 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. JD.com made its AI hosting service free to merchants in December 2025 and said adoption surged within three months, adding that AI hosts can reduce livestream operating costs by 80% to 90%.

Li acknowledged that AI is already changing the industry and said his team has been studying how to integrate it into livestream commerce. But he argued that the technology has limits, saying he does not believe AI can replace human hosts because it relies on previous human thinking, while a human presenter can offer new ideas and perspectives. He sees AI as a tool to improve efficiency, allowing an AI version of himself to keep viewers company overnight while he rests.

Others in the industry share that view. Lu Lin, a 23-year-old host at Shanghai-based livestreaming agency Romomo, said digital presenters still struggle to replicate the trust and judgement that drive sales. To a shopper specifying height and weight, she said, an AI might simply suggest a size, whereas a human host would offer more nuanced advice and build trust.

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 digital host use. Some influencers have faced backlash after revealing that AI avatars were appearing in their place.

Dudarenok said human livestreaming hosts may be an endangered species, but added that as AI-generated content becomes more common, consumers may gravitate back toward the authenticity of human presenters. Less successful hosts, she said, will have to adopt better tools or change occupations.

Profitability has become a priority for brands as the industry moves beyond the discount-driven model that fuelled early growth, said Zhang Junling, vice president of Romomo. As margins tighten, dependence on celebrity hosts is dwindling, with fierce competition making large-scale systems, technology and operational capabilities more critical. "Competition is no longer simply between individual livestream channels or individual hosts," Zhang said.