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Mia Nurmamat

Ben Jiang

In an unprecedented Chinese New Year marketing blitz, Alibaba Group Holding, Baidu, ByteDance and Tencent Holdings spent an estimated 8 billion yuan (US$1.1 billion) to turn their artificial intelligence assistants into household names, according to Morgan Stanley.
Now the dust is settling.
A week after the holiday ended, early data offers a first glimpse into how China’s AI landscape is evolving and which players gained lasting traction from the spending spree.
Morgan Stanley said all platforms experienced “traffic normalisation” once the promotions ended, although the extent of the pullback varied.
Inside the spending blitz: who spent what
Alibaba publicly disclosed a 3 billion yuan headline budget, but Morgan Stanley estimated in a research note on Monday that actual spending may have exceeded 5 billion yuan. Alibaba owns the South China Morning Post.
The campaign promoted Alibaba’s Qwen assistant through vouchers capped at 25 yuan, redeemable across food delivery, movie tickets, flights and hotel bookings within its ecosystem.
ByteDance was estimated to have spent more than 1.5 billion yuan promoting its Doubao chatbot, including sponsorship of state broadcaster CCTV’s Chinese New Year Gala. The TikTok owner offered red-packet draws worth up to 8,888 yuan between February 13 and 16, alongside 100,000 tech giveaways such as robots and drones.
Tencent allocated 1 billion yuan in cash incentives to boost usage of its AI app Yuanbao, rewarding users for completing tasks such as AI image generation with additional prize draws. The campaign ran from February 1 to 23.
Baidu offered 500 million yuan in cash rewards and sponsored a gala hosted by Beijing Radio and Television Station.
User growth: from vouchers to volume
All companies recorded varying degrees of user growth during the promotional period, Morgan Stanley said.
Alibaba’s Qwen saw weekly active users (WAU) jump sharply to 127 million in the week of February 9 to 15, from 17 million before the campaign, citing QuestMobile data.

Doubao’s WAU peaked at 253 million in the week of February 16 to 22, about 41 per cent above its previous average of 179 million.
Tencent’s Yuanbao saw daily active users (DAU) reach peaks of 20 million and 21 million in the first and second weeks of February, respectively – at least 170 per cent higher than January levels.
User retention: from spike to stickiness
Retention data suggests a more mixed picture.
Yuanbao recorded the sharpest reversal, with DAU falling close to pre-campaign levels. Doubao also declined from its peak but maintained a user base above its pre-Chinese New Year baseline.
Qwen’s DAU remained well above pre-campaign levels, although Morgan Stanley noted that voucher validity was extended through March 3, which may have supported usage.
Engagement metrics also weakened.
Average daily time spent per Qwen user fell from 6.3 minutes before the campaign to three to five minutes during peak weeks – a decline of up to 51 per cent – suggesting usage was driven largely by short, transaction-focused activity.
Doubao’s average user time declined by around 15 per cent in the week of February 16 to 22, indicating comparatively stronger engagement resilience.
Yuanbao’s average daily usage time per user dropped roughly 32 per cent from January levels, suggesting incremental users were less engaged on a per-user basis.
“Long-term success depends on the ability to retain users post-holiday via product utility, seamless ecosystem integration and genuine value creation beyond financial incentives,” Morgan Stanley analysts said.


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China Future Tech

Vouchers, red packets and sponsorships drove a surge in AI users over Chinese New Year, but now the tech giants face a retention test


Vouchers, red packets and sponsorships drove a surge in AI users over Chinese New Year, but now the tech giants face a retention test.


China’s AI red-packet battle burns through US$1 billion – but will users stick around?

.css-1c6uqr6{color:inherit;font-weight:inherit;font-size:inherit;font-family:inherit;line-height:inherit;overflow-wrap:break-word;}Vouchers, red packets and sponsorships drove a surge in AI users over Chinese New Year, but now the tech giants face a retention test

Inside the spending blitz: who spent what

Vouchers, red packets and sponsorships drove a surge in AI users over Chinese New Year, but now the tech giants face a retention test