BEIJING: As the New Year approaches, China’s tech giants are flexing their capabilities in preparation for competition over who will win the lion’s share of hongbao (red envelope) usage.
Chinese New Year, which will see in the Year of the Dog, has become a fundamentally important time for China’s mobile platforms, as the tradition of giving cash in a red envelope gives way to the widespread adoption of mobile payments for gifts as well as commerce.
For the internet giants, it’s “the best time for the likes of Alibaba and Tencent to build up brand awareness and increase the number of users on their apps,” according to Sissi Chu, vice-president of research at mobile big data service provider Jiguang. This year, the pair will put forward a combined US$826 million in digital hongbao for their customers.
If platforms can succeed in this time of year, the rewards are colossal. In CNY 2015, WeChat processed more transactions than PayPal did in the entirety of the year. On the eve of the new year, as many as 420 million people sent each other money, as people sent a total of 8.08 billion envelopes.
This year, Tencent’s QQ messenger will combine its mobile payments technology with its fitness tracking. It will reward QQ users with RMB 4 billion in virtual coupons for every 100 steps taken, according to a report from Technode. In addition, it will give away 200 million worth of digital Hongbao to users of WeChat.
Meanwhile, rival Alibaba, which last year debuted its location-based augmented reality technology, has extended its CNY offer across its portfolio. This year it will partner Taobao, its online marketplace, with CCTV’s Spring Festival Gala, the country’s biggest entertainment show.
According to the South China Morning Post, the company will give out as much as 600 million yuan (just under USD$96 million) during the show, which expects to reach an audience of 700 million. The show is by a significant margin the most watched annual show in the world.
Both contenders now also boast a gold hongbao feature. Gold, of course, aligns with the traditional gift of money in the envelope, while also combining with the perception that gold is a safe asset.
Sourced from South China Morning Post, The Drum, Technode, WARC; additional content by WARC staff