WeChat red envelope

WeChat red envelope is an app developed by Tencent and launched on 17 January 2014. Its functions include delivering virtual money, checking a transaction history list, and withdrawing cash. WeChat red envelope became popular during Chinese New Year in 2015. On the eve of the Chinese New Year, Tencent reported that their application recorded over one billion transactions.[1] The purpose behind the app comes from a Chinese tradition where a red envelope is filled with money and given as a gift to family and friends.[2]

Type

Regular red envelope

The user can specify the amount of the money to give.

Red envelope lucky draw

The user assigns a lump sum to a group red envelope, and the number of small red envelopes within it. After posting to a group chat, WeChat will randomly assign the amount in each envelope to each recipient[3]

Timeline

Phenomenon

"Shake you Booty"

In 2014, WeChat partnered with the Spring Festival Gala and introduced the WeChat red envelope shake. During the gala, users were invited to shake their smartphones for a chance to win red envelopes. A total of 1.2 billion red envelopes, worth over half a billion RMB ($83 million USD), were sent out during the promotion.[9] The number of shakes during the gala promotion achieved a total frequency of 11 billion and a peak of 810 million per minute.[10] To win red envelopes, some people shook multiple smartphones to increase their chance of winning, and some people put their smartphones and tablets in a sieve to shake them simultaneously.[11]

Red Envelope War

The Red Envelope War is a financial battle between the two Internet companies competing for the mobile payment market in China. The competition attracted widespread attention from the public. On February 10, 2015, Alibaba announced it would give away RMB600 million (around US$97m) of “lucky money” to users, with RMB156 million in cash and RMB430 million of e-coupons from merchants on its marketplaces. Half a day after Alibaba’s announcement, WeChat announced it would give away RMB500 million (around US$81m) cash and RMB3 billion (around US$484m) of e-coupons the next night.[12]

Through Alipay Wallet, users were able to share Alibaba’s digital red envelopes with their WeChat friends and send them onto WeChat’s sharing platform Moments. Shortly afterwards, WeChat disabled the capability. Alibaba then changed their application to require more direct interaction with Alipay Wallet if a user wanted to give the "lucky money" to their WeChat friends. Specifically, they changed the application to generate an image with a number which could be shared on WeChat, prompting one's WeChat friends to download and open Alipay Wallet and type in the number to redeem the money.[12]

Achievement

Market Shares

Since WeChat launched its virtual red envelope campaign in 2014, Tenpay has more than doubled its market share.[9]

Open the Potential Market

To send or receive money in the app, users need to link their bank accounts to WeChat. It is estimated that 100 to 200 million clients with their bank details have begun using WeChat.[13]

Impact on Business

The growth of WeChat led some companies to use the WeChat's red envelope platform to market their brands, giving away cash or coupons to the public. This in turn drew more people to WeChat accounts and use the red envelope function, increasing the user base.[14]

Criticism

Phubbing Problem

Traditionally, Lunar New Year carries themes of reunification and strengthening relationships. However, the emphasis placed on cash-based incentives has changed the focus of the tradition into a monetary venture.[15]

Fraud

In 2015, people were deceived by fake users and imposters on the WeChat red envelope platform. One large instance of fraud occurred when a user claimed to be Chen Guangbiao, a billionaire. This promised to give out as much as RMB20 million (US$330,000) in virtual red envelope via WeChat. Many WeChat users added the user, hoping to receive a red envelope from the billionaire. Instead, the user never gave out any money himself but ended up receiving a significant gain from users who added him. Later, Chen claimed that he was not in any way involved in the scam and urged those who were misled to contact the authorities.[16] To avoid the similar events, Chinese police have sent out the warning messages to the public.

Corruption

Under China’s corruption campaign, red envelope has been positioned as gears of bribery because it is hardly noticed by the public. Cases related have already reached 51,600 as of July 2014, recorded by Chinese government.[17] Currently, WeChat has set a RMB200 (US$33) ceiling for red envelope-gifting. Yet precisely since the amounts involved are small and because many people might be involved in the gift-giving through the virtual red envelopes, it has proven to be challenging for the government to monitor corrupt practices carried out in this manner.[18]

References

  1. ↑ Chen, Liyan (February 19, 2015). "Red Envelope War: How Alibaba and Tencent Fight Over Chinese New Year". Retrieved July 22, 2015.
  2. ↑ Mack, L. (n.d.) (March 21, 2015). "Chinese New Year: Red Envelope".
  3. ↑ Qian, L. (March 14, 2015). "WeChat Red Envelope Digital Campaign". Retrieved February 23, 2015.
  4. ↑ Li, H. (March 15, 2015). "Will WeChat Succeed in Mobile Commerce?". Retrieved August 26, 2014.
  5. ↑ Mu, X. (Ed.) (March 13, 2015). ""lucky money" brings new color to old tradition". Retrieved February 25, 2015.
  6. ↑ Bischoff, P. (March 14, 2015). "Empty your pockets: Red envelopes are about to hit China’s internet again". Retrieved February 9, 2015.
  7. ↑ Feng, D. (March 14, 2015). "China Media Centre". Retrieved February 20, 2015.
  8. ↑ Millward, S. (March 14, 2015). "Chinese New Year TV extravaganza uses WeChat in an amazing way to give out $80M in cash". Retrieved February 18, 2015.
  9. 1 2 Qian, L. (March 14, 2015). "WeChat Red Envelope Digital Campaign". Retrieved February 23, 2015.
  10. ↑ Millward, S. (March 14, 2015). "WeChat users sent each other 1 billion cash-filled red envelopes last night". Retrieved February 19, 2015.
  11. ↑ Lu, I. (March 14, 2015). "How Many Iphones were Killed during This ‘Red Envelope Shake’". Retrieved February 21, 2015.
  12. 1 2 Xiang, T. (March 14, 2015). "Tencent and Alibaba at Digital Lucky Money War". Retrieved February 10, 2015.
  13. ↑ Wildau, G. (March 14, 2015). "Tencent beats Alibaba in "red envelope" in app war". Retrieved February 21, 2015.
  14. ↑ Tikhonova, K. (March 16, 2015). "WeChat Hongbao Campaign For Chinese New Year". Retrieved February 17, 2015.
  15. ↑ Xie, T. (March 14, 2015). "To grab or not to grab, that is the question". Retrieved March 2, 2015.
  16. ↑ WantChinaTime (March 14, 2015). "Wechat's virtual red envelopes prove a viral hit". Retrieved February 5, 2014.
  17. ↑ Young, P. (March 14, 2015). "Wechat’s red envelop is currently under inspection". Retrieved September 30, 2014.
  18. ↑ WantChinaTime (March 14, 2015). "Wechat's red envelopes: a new pocket for corruption?". Retrieved February 10, 2014.

External links

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