People scan the Chinese character fu (fortune) using Alipay to snatch red envelopes ahead of the Spring Festival in Yangzhou, East China's Jiangsu Province on January 29. Photo: VCG

Spring Festival has become a promotional battlefield for Chinese internet companies as they prepare to shell out more than 10 billion yuan ($1.45 billion) on digital red packets this year, according to media reports, yet experts warn of the risks of privacy infringement when users link to the platforms with bank and identity details.

Douyin, China's short video platform owned by Bytedance, announced it will hand out red packets worth 2 billion yuan for its users to share. 

China's e-commerce giant Alibaba Group also said that a total of 500 million yuan will be shared by its users on the online payment platform Alipay on Chinese New Year's Eve, and its e-commerce platform Taobao will hand out 2 billion yuan in red packets. 

An array of other internet companies, including e-commerce platform suning.com and Xiaohongshu, a product review website, are also hoping their red packet giveaway will boost traffic during the festival. 

Physically giving "lucky money" in red envelopes is a tradition for the Chinese New Year, and it has been undergoing a digital transformation in recent years. 

WeChat first introduced the function in 2014, which allowed users to "snatch" red packets through interactions with the Spring Festival Gala broadcast by China Central Television (CCTV) on New Year's Eve. 

In 2015, the partnership lured more than 200 million users to link their bank accounts with the platform. 

However, the risks of privacy infringement might be lurking behind the digital red packets, as most platforms require users to provide details of bank accounts, or to register to withdraw the money in the digital red packets, Xin Haiguang, a senior IT commentator told the Global Times. 

"The risks are especially prominent with smaller, unknown platforms. Handing out red packets can be a way to steal user data, which might lead to privacy infringement and fraud," Xin said. 

Users are also becoming wary. An internet user from North China's Hebei Province told the Global Times on Wednesday that if not necessary, she would refuse information authorization and not engage in the whole red packet campaign, as information registration is required in most apps. 

Xin also noted that although handing out red packets can give a jump in user growth over a short time, it is becoming increasingly difficult to keep the users long term. In 2019, search engine giant Baidu's partnership with the CCTV Spring Festival Gala boosted the company's daily active users to surge 67.3 percent to 240 million on February 4, but it quickly dropped back to around 140 million after the red packet campaign.