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In the early 2010s, China's consumer market underwent a profound digital transformation driven by the convergence of smartphone adoption, mobile payment infrastructure, and government policy. Online retail had already grown tenfold between 2005 and 2010, reaching approximately CNY 461 billion, but the true inflection came between 2011 and 2015. Tencent launched WeChat in 2011 and integrated mobile payments by 2013, the same year smartphone penetration crossed the fifty percent threshold. Mobile payment usage among internet users surged from twenty-five percent in 2013 to sixty-eight percent in 2016, and by that year China's mobile consumption payments totalled roughly $790 billion, eleven times the corresponding figure in the United States. The government's "Internet Plus" initiative, launched in 2015, accelerated digitization across industries, and the COVID-19 pandemic in 2020 pushed e-commerce sales to CNY 11.76 trillion, a year-on-year increase of nearly fifteen percent. This infrastructure laid the foundation for a new kind of consumer culture, one that would prove especially receptive to virtual entertainment and digital personalities.
At the center of this emerging culture stood Generation Z. Born between roughly 1995 and 2009, China's Gen Z cohort numbers approximately 250 to 265 million people, representing some fifteen to nineteen percent of the total population. Their presence online expanded dramatically, from 213 million active internet users in 2018 to 342 million in 2022, a sixty percent increase. Over thirty percent of this cohort reported the capacity to spend more than 2,000 yuan per month online, and broader consumer surveys found that sixty-four percent of Chinese consumers, with Gen Z at the forefront, now prioritize emotional fulfillment in their purchasing decisions. This generation's tastes and spending habits have become inseparable from the rise of ACG culture, the intertwined ecosystem of anime, comics, and games that moved from subcultural niche to mainstream force over the course of a single decade.
The scale of ACG's expansion is difficult to overstate. According to iiMedia Research, the number of pan-ACG users in China grew from 354 million in 2019 to 503 million in 2024, meaning roughly one in three Chinese citizens now engages with ACG content. The associated market for ACG goods and peripherals doubled in the same period, from CNY 298.3 billion to CNY 597.7 billion. Within this broader market, the so-called guzi economy, the segment devoted to ACG-related merchandise, reached CNY 168.9 billion in 2024, a year-on-year increase of more than forty percent. The demographic profile of ACG consumers skews female at over sixty-one percent, with more than half concentrated in tier-one cities and typical salaries in the 5,001 to 15,000 yuan range. Post-90s consumers alone spend upward of 1,500 yuan per year on anime and related products. It was within this fertile commercial and cultural landscape that virtual idols found their audience.
The technological foundations for virtual idol development in China were laid over more than a decade of incremental advances. In 2012, Shanghai HENIAN and Yamaha's Bplats brought VOCALOID3 technology to China and launched Luo Tianyi, the country's first virtual singer. By 2016, Luo Tianyi had appeared on Hunan Television, and in 2017 she performed a holographic concert for an audience of 10,000 at the Shanghai Mercedes-Benz Arena. The next wave of innovation came in 2020, when MoFa (Shanghai) Information Technology Co., Ltd. (魔珐（上海）信息科技有限公司) deployed its full-stack AI animation technology to power the virtual influencer Ling, and A-SOUL used real-time motion capture suits for live-streamed performances. In 2021, Ranmai Technology (燃麦科技) debuted AYAYI as China's first hyper-realistic "metahuman," while Chuangyi Technology (创壹科技) created Liu Yexi, whose cinematic Douyin videos attracted a million followers within twenty-four hours. By 2022, open-beta AI voicebank tools such as ACE Virtual Singer were enabling amateur creators to produce virtual idol content, and by 2023 Baidu's Xiling platform had compressed the digital human creation process from months to hours. Warner Music entered the space in 2025 with Wu Ai Hua (吴爱花), a fully AI-generated virtual idol styled in wuxia martial arts culture.
The commercial appeal of virtual idols was dramatically amplified by a cascade of celebrity scandals that exposed the risks of relying on human endorsers. In 2018, actress Fan Bingbing (范冰冰) was fined CNY 883 million for tax evasion through dual-contract schemes, triggering the cancellation of endorsement relationships with Louis Vuitton, Montblanc, De Beers, and other luxury brands, and setting off an industry-wide tax audit that recouped CNY 11.7 billion. The year 2021 proved catastrophic for the celebrity endorsement model. Zheng Shuang (郑爽) was embroiled in a surrogacy scandal and fined CNY 299 million for tax evasion, prompting Prada to terminate her contract just eight days after announcing her as an ambassador. Kris Wu (吴亦凡) was detained on rape allegations in July, causing more than fifteen brands, including Louis Vuitton, Bulgari, Porsche, and Lancôme, to sever ties. Zhang Zhehan (张哲瀚) was scrubbed from the Chinese internet after photographs at the Yasukuni Shrine surfaced. Zhao Wei (赵薇), with eighty-six million Weibo followers, was effectively erased from streaming platforms by government order. Li Yifeng (李易峰) was dropped by Prada, Panerai, and Remy Martin following prostitution allegations in 2022. Against this backdrop, virtual idols offered an increasingly attractive proposition: as industry commentators put it, they would "never collapse," carrying zero scandal risk, operating around the clock without physical constraints, and remaining fully under brand control for an indefinite lifespan.
Brands across multiple sectors moved to capitalize on this proposition. In the beauty industry, Florasis (花西子) launched a hyper-realistic virtual spokesperson on June 1, 2021, the first such figure created by a Chinese cosmetics company. The character's design drew on classical Chinese literary imagery, underwent more than a hundred revisions over a year of development, and was intended to serve as a long-term brand persona capable of accompanying the company for decades. In food and beverage, KFC pursued multiple virtual idol strategies, partnering with Luo Tianyi around 2017, introducing a young CGI version of Colonel Sanders in 2019, and collaborating with A-SOUL in 2021. In the automotive sector, GAC Aion (广汽埃安) partnered with Baidu's AI virtual human Du Xiaoxiao (度晓晓) for a metaverse-themed launch event for the AION LX PLUS. Xiaomi collaborated with Hatsune Miku for a co-branded Redmi Note 4X in 2017 and gave its Xiao Ai voice assistant a virtual avatar through Shiyou Technology. Tencent developed the most extensive portfolio of any single company, launching the Unlimited Kings Team (无限王者团) boy band derived from Honor of Kings in 2019, transforming the QQ Dance character Xing Tong (星瞳) into a standalone virtual fashion blogger and cultural ambassador, and debuting Lucy as a hyper-realistic virtual pop idol through its Lyra Lab in early 2023.
Among individual virtual idols, several established themselves as major commercial and cultural presences. Luo Tianyi, owned by Bilibili through its controlling stake in HENIAN/Vsinger, accumulated more than five million Weibo followers and 4.71 million Bilibili followers, performing at the 2021 CCTV Spring Festival Gala alongside pianist Lang Lang and endorsing brands ranging from Pizza Hut to L'Occitane. In 2023 she partnered with Sony Music for the EP "洛LUO," and in 2025 she embarked on a holographic tour titled "Infinite Resonance" and was named a National Treasure Ambassador. A-SOUL, created by Yuehua Entertainment and ByteDance subsidiary NUVERSE, generated monthly revenue of CNY 3.15 million by November 2021, with a total pan-entertainment business of CNY 37.8 million that year. AYAYI, launched on Xiaohongshu in May 2021 by Ranmai Technology, amassed 126,000 followers and 314,000 reactions from a single debut post and secured endorsements with Louis Vuitton, Givenchy, Guerlain, Burberry, and Prada before her visibility faded in late 2022 as metaverse enthusiasm cooled. Ling, co-created by Xmov and Beijing Next Generation Culture Media, was designed as a twenty-five-year-old Beijing woman whose name references the feathered headdress of Peking Opera. She appeared on CCTV's Bravo Youngsters in a Peking Opera performance viewed more than seventy-two million times and secured deals with Tesla, Vogue, Bulgari, and Lancôme.
Virtual idols proved particularly effective in China's booming livestream commerce ecosystem. In April 2020, Luo Tianyi co-hosted a Taobao livestream with the celebrity live-streamer Li Jiaqi, attracting approximately three million viewers. During the 618 midyear shopping festival in 2022, more than thirty brands deployed virtual idols or virtual streamers for marketing and sales. By August 2021, Bilibili alone hosted over 36,000 virtual streamers, with 32,412 virtual influencer accounts having broadcast in 2020 and 560 million comments posted in virtual livestreams that year. One Douyin virtual food streamer, known as "I'm Bu Bai Chi" (我是不白吃), was generating over CNY 100 million per year from product recommendations. Tmall's Luxury Pavilion introduced a virtual idol named Aimee wearing Prada and Miu Miu, while brands such as Jo Malone and Shiseido tapped virtual talent for Douyin livestreams. Industry projections placed the expected demand for AI-powered livestream hosts at nine million by 2025.
The market data reflected this expansion. According to iiMedia Research, the core virtual idol and digital human market grew from CNY 3.46 billion in 2020 to CNY 33.92 billion in 2024, with projections reaching CNY 93.56 billion by 2030. The broader market of associated and downstream industries was far larger, rising from CNY 64.56 billion in 2020 to CNY 333.47 billion in 2023, with a projected CNY 640.27 billion by 2025 and over CNY 1 trillion by 2030. An iQiyi report found that more than 390 million consumers had expressed interest in virtual idols as early as 2019, and iiMedia's 2021 survey indicated that 92.3 percent of virtual idol enthusiasts were between the ages of nineteen and thirty, with seventy-five percent earning monthly incomes above 5,000 yuan. Globally, the virtual idol market was valued at $1.48 billion in 2025, with forecasts projecting growth to $22.62 billion by 2035 at a compound annual growth rate of 35.8 percent.
Virtual idols also became embedded in cross-platform strategies. Luo Tianyi maintained a presence across Bilibili, Weibo, Taobao, CCTV broadcasts, and games. A-SOUL operated on both Bilibili and Douyin. AYAYI appeared on Xiaohongshu, Weibo, and Tmall. Ling featured across Weibo, CCTV, and campaigns for Tesla and Vogue. Between 2021 and 2022, several virtual idols also entered metaverse environments, notably Baidu's Xi Rang platform, which launched in December 2021 and hosted luxury brand events for Dior and Prada before the project wound down as Baidu pivoted to generative AI in 2023. NetEase's Yaotai platform and Bilibili's annual BML-VR concerts offered additional virtual spaces, though by 2023 the broader metaverse trend had cooled substantially, replaced in corporate strategy by a focus on large language models and generative AI tools.
The maturation of virtual idols as standalone intellectual properties opened distinct revenue channels. Luo Tianyi developed what industry observers described as a relatively complete industrial chain covering upstream content production, midstream publication and distribution, and downstream licensed derivative products. A-SOUL generated revenue through livestream tipping, brand endorsements, and merchandise. Tencent's Honor of Kings idol group extended beyond the game with a GQ magazine cover, a Givenchy partnership, and album releases. The guzi economy of ACG merchandise, valued at CNY 168.9 billion in 2024, was projected to reach CNY 308.9 billion by 2029. In January 2026, Beijing's Economic-Technological Development Area granted China's first identity card to an AI virtual idol named Yuri, created entirely through generative AI with no human performer, marking a new threshold in the legal and commercial recognition of virtual personalities.
Yet the rapid proliferation of virtual idol content brought significant challenges. Industry sources identified aesthetic fatigue (审美疲劳) as a growing concern, with one analysis noting that Bilibili alone had approximately 4,000 virtual streamers going live monthly and warning that reliance on appearance alone would inevitably exhaust audience interest. The competitive landscape was described as fierce, with severe homogenization across virtual idol offerings. Deeper ethical concerns emerged around parasocial relationships, with academic research on A-SOUL fans finding that parasocial attachment directly drove spending and engagement. A People's Daily forum article identified risks of value alienation, aesthetic distortion, and emotional obsession among university students drawn to virtual idols. The A-SOUL project itself became a case study in labor exploitation when it was revealed that performers received only CNY 0.6 per CNY 138 tipped, earning monthly wages of CNY 11,000 to 14,000 despite generating millions in revenue, a disclosure that provoked major public backlash and contributed to ByteDance's eventual sale of A-SOUL to Yuehua for CNY 30 million in April 2024.
China's regulatory response evolved through a series of increasingly targeted measures. The Deep Synthesis Provisions, effective January 10, 2023, required prominent identification of synthesized persons and user consent for biometric editing. The Generative AI Interim Measures, effective August 15, 2023, established the world's first binding regulatory framework for generative AI services, mandating lawful training data, intellectual property protections, and minors' addiction prevention. Mandatory AI content labeling measures took effect on September 1, 2025, requiring both visible and invisible markers on all AI-generated content. The most significant development came on April 3, 2026, when the Cyberspace Administration of China published a draft regulation specifically governing digital virtual human information services, the first dedicated regulatory framework of its kind. Spanning five chapters and twenty-seven articles, the draft defined virtual humans as figures existing in nonphysical environments that simulate human appearance and behavior through computer graphics, digital image processing, and artificial intelligence. It mandated continuously displayed "digital human" labeling on all virtual human content, banned the provision of virtual intimate relationships to users under eighteen, required explicit consent before using an individual's likeness or voice to create a digital human, prohibited the use of digital humans to bypass biometric authentication, and established penalties including fines of up to CNY 200,000. The regulation addressed a longstanding legal gap: under China's existing Advertising Law, virtual idols did not qualify as advertising endorsers, since the law defined endorsers as natural persons, legal persons, or other organizations, leaving virtual personalities outside the framework of liability entirely.
The trajectory from Luo Tianyi's debut in 2012 to the CAC's 2026 regulatory draft traces the arc of an industry that grew from a curiosity imported via Japanese voice synthesis technology into a multibillion-yuan commercial ecosystem touching entertainment, retail, luxury branding, automotive marketing, and livestream commerce. The underlying forces that propelled this growth, a digitally native consumer generation numbering in the hundreds of millions, a massive ACG culture that commands half a billion participants, celebrity endorsement models rendered unreliable by scandal, and continuously advancing AI and rendering technologies, remain firmly in place. At the same time, the industry confronts the consequences of its own rapid expansion: market saturation, content homogenization, exploitative labor practices behind virtual performances, parasocial risks among young audiences, and a regulatory environment that is only now catching up to the commercial and ethical realities of virtual human technology. As iiMedia Research observed in 2025, digital humans have evolved from traffic symbols in entertainment to infrastructure for industrial transformation, a shift that carries both enormous commercial promise and correspondingly serious obligations.
[Apr 2026]