Though we’re still three weeks ahead of the most important holiday for Chinese people— the Lunar Chinese New Year — Chinese tech companies are already planning to spend millions of dollars on promotions for their mobile payment tools.
The top three Chinese giants, Baidu, Alibaba and Tencent, referred to as the BAT, are allying with retail brands to distribute cash and coupons in the form of digital Red Envelopes.
The cash-burning competition usually starts months before the new year. Alibaba-backed Alipay is rumoured to have spent RMB 269 million (USD 42 million) in December, to bid on an exclusive partnership with China’s largest state television network China Central Television (CCTV) for New Year’s Gala, which had an audience of 690 million viewers in 2015. According to a calendar released by Alipay, the upcoming promotion will last for 19 days with over 80 offline retail chains participating.
As a latecomer to the competition, Baidu introduced Baidu Wallet last April. To catch up, Baidu spent RMB one billion (USD 153 million) over New Years Eve. During the Spring Festival, it plans to send out coupons with a total value of RMB six billion (USD 923 million) from Jan. 28 to Feb. 22.
Continuing its dual product strategy, Tencent is promoting QQ Wallet along with its signature WeChat Payment product. QQ announced the team would give out Red Envelopes with a cash value of RMB 200 million (USD 30 million) over Lunar New Years Eve alone. As the creator of the digital Red Envelope, WeChat will give out all income from advertisements during the first ten days of the Spring Festival.
Promotion by way of Red Envelopes was first introduced to WeChat in 2013 and caught fire in 2014 thanks to Tencent’s partnership with the Spring Festival Gala. It’s now become one of the most common promotion methods in China. On New Year’s day in 2016, 2.31 billion Red Envelopes were sent out over WeChat, which took WeChat servers down for about five minutes at the turn of the year.