Pinduoduo lands exclusive red packet partnership with CCTV for 2021 Spring Festival Gala

Chinese e-commerce giant Pin duoduo has sealed a deal to serve as the exclusive partner of state broadcaster China Central Television (CCTV) to give away cash via virtual red packets at next year’s Spring Festival Gala, the country’s most-watched national network TV broadcast.

Since 1983, watching at least part of CCTV’s Spring Festival Gala has been a national tradition for families in China. Previous partners – including Alibaba Group Holding, Tencent Holdings’ WeChat, Baidu and Kuaishou – have cumulatively spent billions of yuan in virtual red packets that were given away during the show, as they sought to grab a bigger share of online traffic over the Lunar New Year holiday.

The exclusive partnership with Pinduoduo for the show on February 11 was announced by CCTV at a press event on Thursday. Further details, such as the total amount of virtual red packets Pinduoduo plans to give away, were not disclosed.

“Pinduoduo will collaborate closely with CCTV on the Spring Festival Gala, while continuing to create value for consumers,” a spokesman for the Shanghai-based company said on Friday.

Next year’s show will mark the third consecutive year that CCTV has a major Chinese internet company as its red packet partner, showing the resilience of the industry amid the economic disruptions caused by the Covid-19 pandemic.

The Spring Festival Gala has been a promotional battleground among China’s largest internet companies since Alibaba’s Alipay and Tencent’s WeChat first introduced virtual red packets in 2015, sparking a battle for consumers trying to grab as many as they could using their smartphones. Alibaba is the parent company of the South China Morning Post.

This year’s show, which aired on January 24, was seen by more than 1.2 billion people on TV and on the internet in more than 170 countries, according to an estimate published by state newspaper People’s Daily.

WeChat was the first large tech enterprise to sign a partnership with CCTV for the 2015 Spring Festival Gala, when Tencent’s super app sent out red packets and online coupons worth a total of 500 million yuan (US$73.2 million). Tencent-backed short video-sharing service Kuaishou gave away a record 1 billion yuan worth of digital red packets at this year’s Spring Festival Gala. Kuaishou’s red packet campaign generated 63.9 billion user engagements through its app during the show, according to the company.

The show’s viewers are encouraged to interact with the live show through various games and features on the exclusive partner’s app to win cash via virtual red packets. Red packets, or hongbao, are a traditional practice of giving cash in red paper envelopes (considered an auspicious colour for the Chinese) that has increasingly moved online with the ease of smartphone-based mobile payments.

Pinduoduo beats revenue estimates as online shopping demand soars

Founded in 2015, Pinduoduo has rapidly grown to become China’s second-biggest e-commerce services provider by number of annual active buyers. The Nasdaq-listed company had 683 million annual active users in the 12 months to June 30, behind Alibaba’s 742 million total and ahead of JD.com’s 417 million tally in the same period.

Pinduoduo, known for its deep discounts, has sought to dispel an association with price-sensitive customers. But in August, the company and Tesla clashed over a group-buying promotion, following the US electric carmaker’s refusal to deliver a Model 3 vehicle to a buyer who had received a subsidy through a campaign on Pinduoduo’s platform.

Pinduoduo last month vowed to double down on rural e-commerce, which will be its strategic focus over the next five years. In July, the company named Chen Lei, one of its founding members, as its new chief executive.