An app’s splash page for grabbing digital red envelope. Photo: CFP

 

China's Internet giants have been gearing up for the upcoming Chinese Lunar New Year hongbao (red envelope) giveaway. Both Alipay and WeChat plan to pour tons of money and effort into the event, which Baidu Inc will join for the first time, signifying fiercer competition. They are all vying for more users. In the past, WeChat has frequently come out on top in the hongbao war, but analysts said that Alipay may have a chance to snatch a victory this time. 

It is that time of year again. The Chi­nese Lunar New Year is still more than a week away, yet digital red envelops, or hongbao, filled with cash and coupons are already ubiquitous. 

At 10 am on Saturday, a Beijing-based white-collar surnamed Jiang start­ed constantly tapping her smartphone screen to grab digital hongbao via Alipay, an online payment tool of Internet giant Alibaba Group Holding. 

Jiang, who won a 5 yuan ($0.76) Burger King coupon, told the Global Times on Monday that she was the lucky one, because her friends got noth­ing for their late entry into the hongbao grabbing battle. 

Alipay said its users snatched 10 million hongbao with 5 yuan to 10 yuan coupons in 22 minutes on Saturday. 

This is a part of the hongbao grab­bing activities that Alipay launched on Saturday to celebrate the upcoming Chinese Lunar New Year. The activities will continue until February 10. 

The latest round of hongbao grabbing involving 4 million data traffic pack­ages gifted by domestic telecom carriers ended 15 minutes after it started on Tuesday, Shen Yunfang, a public rela­tion manager at Alipay, told the Global Times on Tuesday. 

Meanwhile, its arch rival WeChat started its hongbao campaign for the upcoming Lunar New Year on Tuesday evening, joining up with nearly 20 business partners including automaker Ford Motor Co and cosmetic maker Shanghai Jahwa United Co. 

This year's Chinese Lunar New Year hongbao battle has also attracted Inter­net giant Baidu Inc, which revealed its ambitious plan to send out digital red envelopes with a combined value of 6 billion yuan, according to an email sent to the Global Times on Monday. Baidu's campaign starts Thursday and will run nearly one month, making it the longest of this holiday season. 

Counterattack 

After Tencent Holdings launched its digital hongbao grabbing activity in 2014 as a promotion for WeChat's mobile payment feature, Alibaba Founder Jack Ma reportedly described the event as a Pearl Harbor-like attack on its Alipay online payment service. 

Alibaba's hongbao efforts over the past two years failed to create as much buzz as Tencent's. However, it seems that Alibaba wants to make some changes this year. 

In December 2015, Alibaba an­nounced that it won a bid for an exclu­sive partnership with China Central Television (CCTV)'s popular Spring Festival TV Gala, which in 2015 helped Tencent send 120 million hongbao on the eve of the Lunar New Year, called chuxi. 

When asked about the deal dur­ing the World Internet Conference in Wuzhen, East China's Zhejiang Prov­ince in mid-December 2015, Tencent Chairman Ma Huateng said Alibaba has competed "very hard," according to media reports. 

The deal reportedly cost Alibaba 269 million yuan, which analysts said was worthwhile, giving Alipay the ability to take on WeChat in this year's red enve­lope competition. 

"CCTV's Spring Festival Gala has a high brand awareness and audience rating. With the deal, Alipay's hongbao campaign this year will work out well," Hao Zhujing, an industry analyst with Beijing-based market research firm Analysys International, told the Global Times on Tuesday. 

It is a tradition of the Chinese people to watch CCTV's Spring Festival Gala to kill time while waiting for the arrival of the Lunar New Year. And hongbao grabbing has been widely perceived by people like Wang Yu as a good distrac­tion during the boring parts of the nearly-five-hour-long Gala. 

Wang told the Global Times on Tues­day that she never missed the hongbao promotion during the live broadcast of CCTV's Spring Festival Gala, even though she seldom participates in such events at other times. 

"I have time, and each hongbao is usually filled with real cash," said Wang, who grabbed nearly 20 yuan via WeChat during last year's Gala. 

On Monday, Alipay disclosed that it would send out digital hongbao worth hundreds of millions of yuan in cash during CCTV's Spring Festival TV Gala. 

Wooing users 

Alipay said it will give away a big red envelope with more than 200 million yuan during the live broadcast of the Gala. But people have to qualify for the giveaway by doing things like friending about 20 people on Alipay. 

The move suggests that Alipay is trying hard to attract more users and promote its social networking (SNS) function, analysts said. 

"The integration of SNS function with payment feature is crucial, which not only enhances users' loyalty to Ali­pay, but also plays a key role in the de­velopment of Alibaba's online-to-offline business," Liu Dingding, an industry analyst with Beijing-based consulting firm Sootoo, told the Global Times on Monday. 

Liu said Alipay's aggressive efforts in this year's hongbao battle will cause some headwinds for the development of WeChat's payment service. 

"But the number of hongbao sent via WeChat will continue growing during this year's Chinese Lunar New Year holidays," Hao said, noting that people have already gotten used to sending digital hongbao to relatives and friends via WeChat. 

A total of 1.01 billion hongbao were sent via WeChat on chuxi in 2015, way up from 16 million in 2014, according to Tencent. 

To further encourage users to transfer money via WeChat, the app on Tuesday temporarily tried out a new fea­tures that allowed users to post blurred photographs, which can only be seen clearly by friends who gave cash-filled digital hongbao to the poster. 

What's next? 

Chinese Lunar New Year hongbao grabbing activities has been proved to be an effective way for online payment services to build up their user bases. 

Thanks to the red envelope activi­ties, Tencent said in its latest quarterly financial report that more than 200 million users had linked bank accounts to their WeChat and QQ accounts as of September 2015. 

As for Alipay, its SNS function will grow in popularity due to the payment tool's efforts in this year's hongbao battle, Liu said. 

It seems that Alipay has at least convinced people like Wang to link their friends together via Alipay. 

"I plan to send friend requests to my good friends on Alipay to get the chance to grab its big hongbao on chuxi," Wang said. 

However, just because people link their bank accounts to WeChat doesn't mean they will end up using WeChat's mobile payment tool. And just because people add friends to their Alipay ac­count doesn't mean they will use its chat function. Wang has no plans to chat with her friends on Alipay. 

Beijing resident Zhang Xi also thinks that WeChat won't be able to beat Alipay at its own game, and vice versa. 

"It's better for Alipay to just exist as a specialized payment tool," Zhang told the Global Times on Tuesday.





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