Internet giants in China have announced plans to give away hongbao during the Spring Festival holidays. Analysts said that Internet giants are dedicated not to lose the war since it has been effective in gaining users before.
China has had a long established tradition of giving away hongbao, a red envelope filled with money, to celebrate the Lunar New Year. With increasing growth in the Internet industry, it has become a tradition for corporations to give online hongbao to users during the holidays, according to the Global Times.
Alibaba Group revealed its hongbao strategy on Jan. 25, whereby it announced collaboration with China Central Television (CCTV)'s famous Spring Festival TV Gala. The company plans to give away red envelopes worth 800 million yuan ($121.6 million) during the gala.
Alibaba also came up with a "lucky card collection" campaign to better the game. Users with all five lucky cards will receive a share of 215 million yuan in gift money from Alibaba Group. Users can earn three cards by "friending" 10 people on Alibaba's payment platform Alipay, besides exchanging cards with their friends.
Talking to the Global Times on Thursday, Feb. 4, 29-year-old Yang Chen said, "I've collected four cards, but it is really, really, hard to get the last one. I've bothered nearly all my friends for that card."
As of 10:30 p.m. on Thursday, 8,232 users had collected all the five cards, meaning that now they will get gift money of approximately 30,000 yuan ($4,560) each. However, if more people collect all five cards, the gift money will reduce for each. Projections indicate that the number of people with all five cards may increase significantly in the next few days.
According to analysts, Alibaba Group aims to promote the social networking functions of its payment tool by launching the card collection campaign.
An analyst at Beijing-based iResearch Consulting Group, Li Chao, said that social networking has always been a weak point for Internet giants. While Alipay is dominant in the third-party payment sector, Tencent's WeChat has always emerged top when it comes to social networking.
Li said: "The lucky card collection has educated people about Alipay's social networking functions in a very short time. It has been successful in this regard."
The analyst added that it is still early to predict long-term efficiency as users may revert to WeChat for social networking after the red envelope giveaway ends.