Chinese New Year, aka Tech Giant 'Hongbao' Battle
The Lunar New Year represents a convenient time for tech companies to build up brand awareness and attract new users in China. This article tells the story of how these tech companies are spicing up their new-year red envelope game.
As a tradition, during every Chinese Spring Festival, Chinese people give and receive hongbao (红包) – red envelopes containing money – to wish prosperity and good fortune to loved ones, friends and colleagues. For technology companies, however, this tradition has become an annual battlefield to entice users to stay glued to their respective services through financial incentives, games and promotional offers.
Since WeChat introduced its 'virtual red envelope' – digital hongbao – lottery in 2015, snatching and handing out e-money has become a beloved holiday tradition in family or work group chats (your writer just landed CNY 94 on this year's lunar new year).
This year, with an estimated CNY 7 billion in e-money circulating for the Spring Festival, a lot of tech companies are leveraging the occasion to attract new users by adding new tricks to the 'hongbao snatch game' – this being a mobile hongbao pastime where users in chat groups drop collective envelopes which have to be opened quickly by excited fellow group members.
WeChat's rising sister-product Weishi – Tencent's short video app – announced that it would allocate around CNY 1 billion (USD 145 million) to subsidize users who download the app and do a variety of tasks. Customers are encouraged to send red packets containing as little as CNY 0.01 from January 17 to February 8, as they exchange short video clips with those who use the same app. The company then subsidizes every red packet that could hit as much as CNY 888.
Part of the cash incentives comes from performing tasks such as viewing and curating videos, collecting electronic cards and inviting friends to download the app.
ByteDance's short-video platform Douyin (internationally known as TikTok), which boasts 400 million daily active users, has been running its ‘Prosperity During Chinese New Year’ challenge since 2018. This year, Douyin users are collecting five virtual cards – 发, 财, 中, 国, 年, making up the title of the challenge – to take part in a CNY 300 million draw.
Douyin's participants need to engage in several competitive games to get a share of the earnings and sign up for lucky draws at specified times. To illustrate, users need to collect virtual cards with the logos of ByteDance products, such as news app Jinri Toutiao or selfie app Faceu, and play a variety of Spring Festival-themed games. They also need to participate in the ‘hongbao rain’ – red envelopes that randomly appear on the home page at different times – to win more cash or licensed products. With this, ByteDance also sets this year’s experience apart from previous years through increasing collaboration between different business clusters.
Meanwhile, ByteDance's local competitor Kuaishou offers ‘hongbao rain’ throughout the Chinese New Year – but unfortunately, only virtual cash amounts of over 100 RMB can be redeemed into the user's bank account.
In addition, the search engine Baidu is in the fight this time. Baidu is giving users extra chances to collect its "fortune cards" by watching 10 seconds' worth of content in Hakam Video – an affiliated app – or browsing for 10 seconds in Baidu Forums.
As you can see, the hongbao battle for these companies is not only about drawing in new users, but making sure that addicted players spend a lot of time in the app and drive up engagement numbers.
Lastly, Alipay – a popular third-party payment app affiliated with e-commerce firm Alibaba, is providing envelopes that are coupons for group tours and insurance. Those who recommend that friends download the app will also receive a bonus of CNY 10 to 20 each. The app began to hold its "AR Collect Fortune" challenge in 2016.
This year users can also collect random virtual cards containing a blessing by opening the Alipay app's QR scanner to scan any of the characters for "blessing," or fu (福), that they come across. Compared to ByteDance's game, this is an easy task, given the character’s omnipresence as roadside decoration or good luck charms on social media during the holidays.
According to UBS Securities strategist Liu Yuan, this competitive pace is associated with the growing appeal of short video platforms, which in the next two years are projected to have the most significant growth potential across all media platforms.
Liu noted that one clear pattern internet companies are finding themselves in is to promote and encourage the production of high-quality digital content, particularly pieces that enhance people's interactions with others.
Yet market experts say these companies have quite similar techniques to attract new fans or improve user engagement, reflecting the heavy traffic in China's mobile internet sector that could affect the growth of revenue over time.
In this sense, the hongbao games, with their traditional background, are providing excellent opportunities for tech companies to enhance their contents and increase interactions between users and with the platforms.
It seems like Chinese tech companies are creating new hongbao games every year to differentiate themselves from the others and increase their revenues by expanding their user bases. But in order to realize this aim, they will need to keep adding 'originality' to the handy 'tradition.'