From Reebonz to AI avatars: SG startup eyes US$100 billion opportunity

WHAT do Airbnb, Slack, and Nintendo have in common?

These billion-dollar businesses were built on the failures of earlier ventures, with founders learning from setbacks to eventually find success.

Pivoting is not an uncommon strategy, and it’s not limited to iconic brands. Case in point: defunct luxury marketplace Reebonz.

Once a leading online destination for high-end goods in Singapore, Reebonz faced financial difficulties a few years after its rise. The company was delisted from Nasdaq in 2020 – just 17 months after its debut – as it failed to meet the minimum share price requirement of US$1 for over 30 consecutive days.

Reebonz entered voluntary liquidation in 2021, burdened by S$65 million in debt that it was unable to repay.

LiveCommerce Entertainment (LCE) acquired Singapore-based Reebonz’s brand and digital assets in 2022, and an evolved version of this company is now positioning itself at the intersection of two major trends: live selling and generative artificial intelligence (AI).

The connecting link

A common thread between LCE and Reebonz is serial entrepreneur Samuel Lim. A co-founder of Reebonz, he is now the CEO of LCE.

The growing popularity of live commerce in South-east Asia, along with the emergence of TikTok Shop, has prompted LCE to become a B2B2C AI livestreaming platform, which allows brands to develop genAI avatars designed to widen their consumer reach.

The company estimates that the convergence of these technologies will unlock a US$100 billion opportunity in Asia.

A B2B2C approach makes sense for LCE, as it allows the company to avoid dealing directly with end consumers – a trend that was evident at Reebonz when it ventured into physical stores. This move was considered an “overly aggressive attempt”, as the high operational costs, including retail rent, had made it difficult for Reebonz to balance its finances.

Another key factor in Reebonz’s downfall was shifting consumer preferences, as many branded items were past-season and failed to attract influencers. LCE may be aiming to leverage the influencer trend by providing brands with genAI avatars for livestreaming to engage a more trend-conscious audience.

But can live commerce truly depend on genAI avatars, which mimic human appearance but lack genuine emotions? Or are these virtual beings just a passing trend?

AI and sell

The use of genAI avatars is on the rise in China, a market often seen as a precursor for trends in South-east Asia.

The technology has seen “good success” in China, where consumer brands use AI avatars to livestream their products 24/7 on various e-commerce platforms and generate new streams of sales, said LCE spokesperson Dan KT Lim.

LCE offers two key genAI avatar solutions: one for livestreaming and another for short videos.

The technology, LCE.AI +, can create personalised AI avatars within seven days. These are digital clones of human brand ambassadors and key opinion leaders (KOLs) that can be used for livestreaming. Aside from speeding up the development process for these avatars, using genAI reduces the need for a dedicated artist or design team and lowers production costs, according to Dan.

Additionally, it ensures a consistent visual style and quality across all avatars, even when producing many. This consistency is crucial for businesses aiming to maintain a cohesive brand or aesthetic, said Dan.

The process begins with the client’s brand ambassador or KOL visiting LCE’s studio, where their physical likeness, body movements, and voice will be cloned.

Next, the genAI engine trains and generates the custom avatar. This typically takes less than a week, but it could go up to “14 days in order to manage clients’ expectations”, Dan said. After this, clients can use the custom avatar to create videos or do livestreams.

Dan added that these genAI avatars provide brands with a cost-efficient way to allow livestreaming across multiple social media platforms concurrently, helping to reach more customers quickly.

Indeed, LCE is not the only one looking to take advantage of this opportunity.

In June, social media giant TikTok introduced genAI avatars featuring both creators and stock actors for branded content and ads on its platform. Creators can scale their likeness into multilingual avatars to “expand their global reach and enhance brand collaborations”, TikTok had said.

Such an initiative could present LCE with a fierce competitor.

However, Dan clarified that LCE does not view itself as a direct competitor of TikTok, as the social media app has its own ecosystem to support creators. LCE, on the other hand, is platform-agnostic. “We focus on personalised, custom clones rather than relying on free standard avatars found online to create videos,” the spokesperson added.

80/20

The rise of genAI avatars provides brands and livestreaming platforms with a solution to one of their main challenges: finding and retaining talent.

“The live selling business generally follows the 80/20 rule, where 80 per cent of live commerce sales are generated by 20 per cent of top sellers,” Joseph Phua, managing partner of tech investor Turn Capital, tells Tech in Asia. He is also a co-founder and the chairman of 17Live, a livestreaming firm listed on the Singapore Exchange.

This places significant power in the hands of the leading sellers, who can demand a greater percentage of the profit, he added.

As seen in some markets such as China, this could be addressed by virtually replicating live sellers via genAI. Consequently, this could tilt the power balance from live sellers to the companies that create and own the avatars, giving businesses more control over their branding and messaging, according to Phua.

But this tech comes with trade-offs, too.

GenAI avatars could become competitors for human influencers by offering a cost-effective and scalable alternative for brands looking to engage audiences. A Rest of World report highlights how e-commerce companies experimenting with AI livestreamers to slash costs are further destabilising the job market for live sellers in China.

LCE’s Dan argues that the advent of this tech is not all bad for human influencers and live sellers as they can allow brands to use their genAI avatars for promotional events and livestreams – no need for their physical presence.

This should “increase their income exponentially”, he added.

Beyond live commerce

The name “LiveCommerce Entertainment” might give the impression that the company is exclusively dedicated to live commerce, but this is not the case.

Dan said that genAI avatars can also be used in short videos for various corporate functions such as in-house training, corporate communications, and quarterly reporting.

He explained that these avatars can be programmed to speak multiple languages, allowing for the easy creation of content to communicate across various countries. For instance, a Singaporean company could use an avatar to create a video of its CEO speaking in Thai for a town hall meeting, helping to connect with colleagues in Bangkok.

Latif Sim, chief financial and strategy officer at livestreaming platform BeLive, agrees. A genAI “avatar will be most impactful if you use it on a short-form video because there are no [real-time] questions being asked during a video”, he told Tech in Asia.

But with livestreaming, he pointed out that “there’s no way you can programme an avatar to answer a very specific question from a consumer”.

Indeed, while avatars are becoming more advanced in design and behaviour, they often fall short of the authentic emotional connection and human presence that real-life influencers bring to live selling.

Influencers, on the other hand, have a dynamic presence and can convey genuine excitement and enthusiasm. They can build trust and spark emotional responses from consumers that drive impulse buying, a key aspect of e-commerce.

“For instance, when a live influencer reacts to a product they genuinely like, their body language, facial expressions, and tone of voice can communicate authenticity in a way that pre-programmed avatars might not fully capture,” noted Sim.

While genAI avatars can simulate interactions, they typically rely on scripted or pre-programmed responses, often lacking the spontaneity and unpredictability that make live selling engaging and dynamic.

LCE, which is still in its early stages, is focused on testing and gaining adoption of this technology. The company is also exploring new use cases across various industries and aims to gather more information on how small businesses can use genAI avatars. TECH IN ASIA