Recently, AI technology has made significant strides in the field of video creation, capable of generating reasonably good quality videos from a single image or short sentence. This technological shift has prompted numerous companies to develop products around AI models, claiming that users can effortlessly create engaging promotional videos with just a few images or recordings. Compared to static images or documents, videos generally offer better dissemination effects.
On Monday, Avataar, backed by Peak XV and Tiger Global, launched a new tool called Velocity, which directly generates product videos based on product links, competing with companies like Amazon and Google that are also exploring AI video advertising tools.
Avataar's core philosophy is similar to video creation tools like Lica or Synthesia, aiming to reduce video production costs and enable mass generation. Traditionally, video production has been expensive, making it difficult for companies to produce videos for all their products. However, the application of AI technology is gradually lowering this cost.
Founded in 2015 by Sravanth Aluru, a former Microsoft and Deutsche Bank employee, Avataar initially focused on creating interactive experiences, AI images, and 3D models for e-commerce. Now, the company is shifting more focus towards using AI to create videos for brands.
According to Avataar, although 3D models and experiences have higher conversion rates than videos, the broader audience reach of videos means they can still outperform due to scale advantages even if their conversion rates are slightly lower.
In February 2024, Avataar began commercial testing of its AI video creation tool, which still required human assistance at that time. By September of the same year, the company started testing its fully automated Velocity tool.
Currently, brands such as HP, Victoria's Secret, Lowe's, Newegg, Marina, TVS, and Bajaj are using Avataar's tools to generate various product videos. Avataar claims that while brands may customize videos for flagship products, the Velocity tool is equally useful for budget-constrained products, enhancing their conversion rates through informative AI-generated videos.
Avataar also offers an API that businesses can integrate into their platforms to automatically create and list product videos.
Aluru points out that what sets Avataar apart is the vast amount of product data collected through 3D rendering, ensuring high-quality product showcase videos. Avataar's tools can be customized according to the subcategories and attributes of different products, highlighting unique features for items like hammers and smartphones.
Moreover, Avataar's videos aim to create a sense of desire for products among consumers while ensuring brand safety and accuracy of product information. The company has established a review mechanism to identify and reject inaccurate content generated by the tool.
Amir Konigsberg, an investor and founder of the now-defunct e-commerce startup Twiggle, believes that while there is potential in creating videos for online sales, these videos must be distinctive enough to stand out. He notes that video generation is a natural extension of automating e-commerce processes, an effective way to boost user engagement and conversion rates. However, many companies are already involved in this space, offering services such as background generation, post-production effects, multi-angle product renders, image cutouts, and realistic shadows. Therefore, standing out in this field requires consistency, adherence to licensing standards, and proper attribution.
Konigsberg also mentions that brands previously hesitated to adopt AI-generated video solutions due to challenges in maintaining quality while scaling up. But with recent advancements in model technology, these tools now have the potential for large-scale application.
