China’s internet companies invest billions in virtual red packets for Lunar New Year as they vie for more traffic

Last year’s CCTV’s Spring Festival Gala attracted more than 1.1 billion viewers

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A WeChat user scans a QR code to retrieve a digital red envelope on the WeChat app on a mobile phone during the Chinese New Year period in Beijing in 2017. Photo: EPA/STR

Published: 5:00am, 16 Jan 2020Updated: 6:27pm, 16 Feb 2020

Chinese tech companies are planning to spend billions of yuan in virtual red packets for the upcoming Lunar New Year as they seek to grab a bigger share of internet traffic over the national holiday.

Short video app Douyin, owned by Beijing-based Bytedance, kicked off its red packet campaign on Tuesday with users able to share in 2 billion yuan (US$290 million) worth of cash handouts, while search engine giant Baidu launched its campaign on Wednesday with 500 million yuan of handouts for the holiday.

Douyin’s rival Kuaishou will spend 1 billion yuan on its campaign for Lunar New Year as the exclusive “red packet” partner for China Central Television’s (CCTV)’s Spring Festival Gala.

Alibaba Group has allocated 500 million yuan in cash handouts on its digital payment platform Alipay and a further 2 billion yuan in allowances during the entire lunar new year holiday on its e-commerce platform Taobao, which is the exclusive e-commerce partner for the CCTV gala. Alibaba is the parent company of the South China Morning Post.

The traditional practice of giving out cash in red paper envelopes – considered an auspicious colour for the Chinese – has increasingly moved online with the ease of smartphone-based mobile payments. Many companies in China routinely hold red packet promotions, giving out cash or rebates that consumers can “snatch” through mobile apps.