Cash prizes for those using the app before the New Year celebrations (16 February 2018). This is the new idea of Alibaba Group Holding and Tencent Holdings, the leading Chinese mobile payment operators, who pledged to distribute 5.2 billion yuan in “Hongbao”, the traditional red packet with cash money given as a gift, and shopping coupons.
Sissi Chu, the vice-president of research at mobile big data service provider Jiguang, said “Chinese people have a tradition to send greetings and Hongbao to each other during the Lunar New Year, making it the best time for the likes of Alibaba and Tencent to build up brand awareness and increase the number of users on their apps”.
The strategy is to attract the customer on a single app, where to manage all possible customer requests: ordering food, paying bills and playing online. With the Hongbao, users remain glued to their smartphones, encouraging the growth of operators.
Furthermore, Alibaba has already promised Hongbao for a total value of 1 billion yuan, which will be delivered to the Taobao Marketplace virtual shopping app from 11 to 15 February. The various digital money prizes will be paid on February 15th, during the annual New Year’s gala special, broadcast by China Central Television.
The show (Alibaba is one of the main sponsors) has an annual audience of over 700 million viewers (the Super Bowl has “only” 103 million), and all of them can all be potential customers for the Chinese operator. The numbers are clear: 580 million monthly active users on the Taobao Marketplace shopping app.
Nevertheless, there is not only Alibaba to use TV during the holiday season to keep their customers active on the app. Indeed, many companies resort to this strategy and, the TV operators, very often instruct the host of the transmission to start the exchange of virtual gifts.
The free money received, later, is deposited directly in the recipients’ accounts and can be used for future purchases via the app or be sent back as a gift to friends and relatives who are using the same app.
China, with 1.4 billion subscribers in December 31 last year, as confirmed by the iResearch internet consulting firm, recorded a value of 5 trillion dollars on mobile payment transactions in 2016.