Updated 7 Feb. 2017: This post is updated to include rumors about Alipay’s plan for launching gold Hongbao.

The Lunar New Year (aka Spring Festival or 春节 chunjie) is just two weeks away and Chinese internet tycoons are poised to enter the latest showdown (in Chinese) in the recurring red envelope (红包 hongbao) war.

Tencent’s plan for instant messaging tool QQ combines the cash-giving tradition with fitness tracking, another popular feature. Like WeChat Sports, QQ can read motion-tracking data from your phone and with every 100 steps, users get a chance to draw their share of RMB 200 million (around $32 million) in cash and RMB 4 billion in virtual coupons. The principle is simple: the more you walk, the more benefits you can get.

Screenshots of QQ Hongbao (Image credit: Tencent)

In addition to maintaining the augmented reality hongbao campaign, Tencent’s rival Alibaba announced a partnership between its online marketplace Taobao and CCTV Spring Festival Gala, the largest entertainment show in China, to hand out RMB 600 million red envelopes and gifts to viewers during the gala.

To build up users’ expectations, Alipay is reportedly launching a gold hongbao feature, but it is still unclear how the new feature works. Alipay declined to comment on the issue when TechNode reached out for confirmation.  Tencent has launched a gold hongbao feature on WeChat during last year’s spring festival holiday. It quickly went viral among users not only because many believe gold is a safe asset and but also because it’s part of the monetary gifts giving culture in China.

Screenshot of Alipay AR Hongbao (Image credit: TechNode)

As the first mover and continued winner of this battle, Tencent has managed to boost swift development for WeChat Payment. It is rumored that some 200 million bank accounts were linked to WeChat over the Lunar New Year holidays in 2015. Over 14.2 billion red envelopes were sent out via WeChat on New Year’s Eve last year.

WeChat has been the foremost frontier of Tencent’s hongbao battle so far, but it seems that the company is trying to duplicate WeChat Payment’s success to its older sibling. Given QQ’s increasingly young user base, this new plan could help Tencent to attract more young Chinese and become a part of the consumption behaviors of China’s next generation of consumers.

China has undergone a drastic shift towards mobile payment in recent years. The country now has 531 million online payment users as of December 2017, of which 527 million are mobile payment users.

Emma Lee (Li Xin) was TechNode's e-commerce and new retail reporter until June 2022, when she moved to Sixth Tone to cover technology and consumption. Get in touch with her via lixin@sixthtone.com or Twitter.

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