South East Asia

Red Envelopes, Pokemon And A Whole New Way For Alibaba And Tencent To Compete

The Chinese New Year is upon us — and as is their annual custom, Tencent and Alibaba are competing to see which firm can own the hongbao game. For those unfamiliar, hongbao is the name for the tradition of gifting red envelopes with money inside.

And while the two tech firms’ red envelope competition to see which site can be the originator of more digital/mobile red envelopes is something of a yearly staple in China — this year, it is getting a modern Pokemon update.

The new strategies on offer seem to be bent on promoting their offline mobile payments and augmented-reality games.

Brick and mortar mobile in China is largely created through the magic of a QR code — scan and done.  This year, however, since both Tencent and Alibaba are looking to get more in-store (as opposed to online) use — they are trying to push Chinese consumers to use the spring festival as a reason to buy physical objects through their apps, hoping that the habit will stick.

“People are used to using WeChat to swipe QR codes, rather than Alibaba’s Alipay payments app. WeChat’s new mini-programs will help it consolidate its advantage in offline payments,” said Chen Jin, assistant professor at the China Europe International Business School in Shanghai. “Alipay is on the back foot, so it’s putting out the Five Fortunes game,” she added.

And there are more gamified features on offer.  For those who aren’t into buying a present and would rather give the traditional cash-stuffed envelope, Alibaba has an option of leaving such an envelope at a GPS-tagged location — something that one factory boss in Guangdong did to encourage his workers to turn up for overtime during the holiday season.

Tencent’s offering is very Pokemon-like and aimed and younger users — players hunt down red envelopes that are placed in their neighborhood and guarded by virtual avatars. So far 250 million people have played the game.

So far, in the run up to the holiday, Tencent and Alibaba gave out a total of Rmb450m ($65m) in festive hongbao to 511m users. Around 14 billion red envelopes had been sent via Tencent’s WeChat as of lunar New Year’s Eve on Friday, an increase of more than 75 percent from the previous year. Alipay did not release its virtual red envelope figures.

Click to comment

TRENDING RIGHT NOW

To Top