Two companies in Hong Kong have inked a pact to develop digital social influencers as part of efforts to tap opportunities in China, where virtual characters increasingly are used for marketing purposes. This sector is estimated to be worth$17 billion in 2021. 

ViLab and Actoplus Holding said in a joint statement Tuesday they would collaborate to create and manage "virtual idols" or celebrities, which could be assigned to carry out various commercial functions such hosting livestreaming events, brand endorsement, and both online and offline marketing campaigns. 

ViLab is a Hong Kong-based metaverse services provider that uses artificial intelligence (AI) to develop virtual identities and behaviour. Also based in Hong Kong, Actoplus offers e-commerce and digital marketing services in Greater China and other Asian markets, to a clientele that includes lifestyle and fashion brands such as Evisu and Geox. Actoplus is a certified brand service partner of Chinese video streaming platform, Douyin.

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The two partners said virtual social influencers had become a popular way for brands to connect with the Chinese market, specifically, younger consumers. 

"Fully-developed and powered by AI and advanced animation technology, virtual idols bear close semblance to real human and are now adopted by a diverse range of industries from fashion to games to financial services," they said. 

Citing figures from Chinese research firm iiMedia Research, they noted that China's virtual idol market grew 70% to hit$551.67 million (3.5 billion yuan) in 2020 and was to expected to further expand to$945.71 million (6.5 billion yuan) in 2021. 

ViLab's chairman and founder Ric Wu said: "Virtual idols have been a dominant feature in our metaverse vision since our founding. Access to the world's biggest consumer market, where digital marketing is seen as one of the next frontiers, will give us the perfect platform to test and launch many of our ideas and technology."

The Hong Kong company said it had worked with its partners to develop virtual human technologies, such as face-shifting, lip synchronisation, and voice cloning. 

Actoplus' chairman Vincent Lau said it looked to collaborate with ViLab's partners in the metaverse space and explore further opportunities and new business models in the digital space. 

Digital social influencers have amassed millions of fans in China, where virtual singers such as Yousa has 3.16 million fans on video streaming platform Bilibili and have appeared alongside human personalities. 

Digital celebrities also are paid to promote products on their livestreams, reportedly to the tune of 900,000 yuan ($141,856) in sponsorship fees. Virtual singer Luo Tianyi, which has 5.13 million fans on Weibo, showed up as a hologram on stage in 2019 alongside Chinese human pianist, Lang Lang. 

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