China’s ‘lipstick king’ confronts slower growth, AI disruption in livestream shopping

In 2025, China's online retail sales reached 36% of the market, up from just 18% in 2021. The "lipstick king" of China, Li Jiaqi, has been instrumental in transforming livestream shopping into a cornerstone of the country's retail sector. Despite a slowdown in growth, Li remains optimistic about the industry's future, stating that it has entered a "stable and healthy phase."

The growth slowdown is attributed to a weaker consumer environment, with retail sales expanding by only 0.4% in August 2025, down from 0.6% in July of the same year. The broader growth of 1.1% over the first eight months of 2026 also reflects sluggish household spending.

However, livestream shopping has reshaped China's shopping habits, with online retail sales surpassing 36% in 2025, up from less than 18% in 2021. Ashley Dudarenok, founder of digital consultancy Chozan, notes that while the sector has slowed, it remains growing but in a more challenging environment. Merchants must compete harder for customers' attention and face lower customer budgets.

To address these challenges, AI is playing a significant role, with e-commerce platforms and merchants increasingly deploying digital hosts that can operate around the clock at a fraction of the cost of human presenters. This has raised questions about the future of human hosts in the industry.

Li Jiaqi, despite acknowledging the impact of AI, believes that AI cannot replace human hosts. He sees AI as a tool to improve efficiency and enhance the livestream experience, allowing human hosts to focus on building trust with customers. However, concerns exist about AI's ability to influence buying decisions, as human intuition and judgment are irreplaceable.

Lu Lin, a 23-year-old host at livestreaming agency Romomo, highlights the difficulty AI faces in replicating the nuanced responses and trust-building skills of human hosts. Regulations have also been introduced to address the use of AI-generated content, with ByteDance-owned Douyin banning fully AI-generated livestreams and requiring disclosure of the use of digital hosts.

Despite these challenges, the industry's profitability is seen as a priority, with brands moving away from the discount-driven model that fueled early growth. As competition intensifies, technological capabilities and operational efficiency have become crucial for success. While human hosts may face obsolescence in the long run, Dudarenok believes they will still have a role to play, especially as the market becomes more discerning.