Finance

Alibaba VS Tencent Over Red Envelopes

The Chinese New Year is finally here and an annual custom that while not traditional is still very interesting. Alibaba and Tencent are competing to see which firm can own the Hongbao game which for those who are unfamiliar with that name is the tradition of giving red envelopes to family members and friends which normally contains money.

While the two tech giants red envelope compete to see who can make a more digital/modern version of the game continues on this year it appears to be getting a more of a Pokemon feel to it.

This year Tencent and Alibaba are trying to promote their offline mobile payments with the use of augmented-reality games. Think Pokemon Go meets Hongbao.

“People are used to using WeChat to swipe QR codes, rather than Alibaba’s Alipay payments app. WeChat’s new mini-programs will help it consolidate its advantage in offline payments,” said Chen Jin, assistant professor at the China Europe International Business School in Shanghai. “Alipay is on the back foot, so it’s putting out the Five Fortunes game,” she added.

Alibaba has jumped into the mix for those who are not into buying a present and instead want to leave a cash-filled envelope to their friends and family. Alibaba has an option of leaving an envelope at a GPS-tagged location.

Tencent, on the other hand, has taken the concept and targeted it towards younger users where players can hunt down red envelopes that are placed in their neighborhood and are guarded by virtual avatars. So far this game has been played by over 250 million users.

So far, in the run-up to the holiday, Tencent and Alibaba gave out a total of Rmb450m ($65m) in festive hongbao to 511m users. Around 14 billion red envelopes had been sent via Tencent’s WeChat as of lunar New Year’s Eve on Friday, an increase of more than 75 percent from the previous year. Alipay did not release its virtual red envelope figures.

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Scott Hartley

Scott Hartley is the developer and owner of The Daily Exposition who is also a tech enthusiast and writes the majority of content found on the website. When he isn't keeping up to date with the latest and breaking technology news, he is working on his own WordPress plugins, themes, or out exploring the world.

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