China's Tech Giants Give Away Billions of RMB for Lunar New Year

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 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 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.

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.

The Chinese Lunar New Year holiday period offers huge traffic potential for internet companies. Last year, CCTV's Spring Festival Gala attracted more than 1.1 billion viewers, the most-watched national network TV broadcast.

Tech companies like Bytedance and Baidu are making the most of the virtual red packet campaigns to boost traffic in their respective internet ecosystems.

Analysts say giving away money during the holiday period is a cost effective strategy to quickly boost user numbers.

Alibaba's Alipay and Tencent's WeChat first introduced virtual red packets in 2015, sparking a battle for consumers who scrambled to capture as much of the free money they could using their smartphones. Since then, China's traditional lunar new year has become cashless.

Source: scmp

Editor: Crystal H

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