Empty your pockets: red envelopes are about to hit China’s internet again

Tencent struck virtual gold last year with the introduction of a new feature on its WeChat messaging app that allowed users to send cash gifts to friends and family. The Chinese New Year-themed scheme quickly went viral, and nearly 5 million users gifted 20 million of the virtual red envelopes within just two days.

WeChat’s success did not go unnoticed, and it’s now up against the combined force of microblogging platform Weibo and China’s biggest online payment company Alipay to be the method of choice when sending cash gifts.

Red envelopes, or hongbao, are a traditional Chinese gift during Spring Festival, a celebration of the Lunar New Year. Tencent turned the holiday custom into a viral hit.

This year, it’s announced plans to unleash 500 million red envelopes full of cash and another 3 billion virtual coupons to WeChat users over a 10-day period, from February 12 to 21, according to QQ Tech. This is in addition to the person-to-person gifting scheme from before. Users must use WeChat’s "Shake" function, in which the user shakes their phone, at scheduled times for a chance to win up to RMB 4,999 (US$800). The biggest disbursement is expected to come on Chinese New Year’s Eve, February 18.

In order to get a jump on the incumbent, Weibo and Alipay launched their hongbao gifting campaign on February 2. Within eight hours, China Internet Watch reports 5.5 million red envelopes had been issued. That money is stored in the users’ Alipay account, whereas WeChat has its own virtual wallet feature.

WeChat’s gifting scheme is more personal, allowing friends and family to send money to individuals or small groups of people, and have the money be randomly divided between group members. A minimum gift of one yuan and the group lottery scheme made it accessible and fun, leading to its viral success.

Weibo is a bit different, and is more focused on connecting brands to consumers. Any company or person tweeting the hashtag "Let fly a red envelope" (translated to English) will surely gain a few followers looking to earn some extra cash and gifts.

Alipay originally allowed users to send red envelopes to WeChat friends, but Tencent quickly shut down that function, sealing itself off from the Alibaba ecosystem. That was just one of several recent moves to wall-off the ecommerce titan from Tencent’s messaging app.

See: Watch as Apple localizes its heart-wrenching Christmas commercial for Chinese New Year