A district government in the eastern Chinese city of Qingdao has started distributing coupons to citizens via instant-messaging app WeChat as the country pushes to increase consumption.

Why it matters: While cities in eastern China such as Nanjing in Jiangsu province and Ningbo in Zhejiang province have started to provide government coupons, Qingdao is the first to deploy the vouchers on WeChat.

  • WeChat is one of China’s most popular mobile payment tools with a 39.9% share of the mobile payment market in the third quarter, according to market research firm Analysys (in Chinese).

Details: The Chengyang District of Qingdao in eastern China’s Shandong province began issuing RMB 10 million (around $1.4 million) in government coupons to residents on Saturday, according to Chinese newspaper Beijing Youth Daily.

  • A total of 198,000 people living in the district will receive coupons that can be redeemed in categories including food and beverages, sports facilities, books, and others, according to the report. The district’s population was around 720,000 as of the end of 2018, according to official statistics (in Chinese).
  • Medical staff working in the front lines of the Covid-19 epidemic will each receive a voucher of RMB 200 while members of households that receive minimum living standard welfare payments will be granted coupons worth RMB 100 each, said the report.
  • Others will be allocated RMB 40 or RMB 50-worth of coupons by an online lottery system. They can use the RMB 40 coupon when they spend more than RMB 40.01 while the RMB 50 coupons can only be redeemed when they spend more than RMB 100.
  • Residents can register on an app developed by the Chengyang District government to participate in the lottery, and coupons will be issued to their WeChat Wallet.
  • The function will be rolled out in other localities including Beijing in the future, the report said citing Tencent.
  • Tencent confirmed the report but did not respond to requests for detail.

Context: Retail sales in China declined 20.5% year on year in January and February, brought by the Covid-19 outbreak, according to the National Bureau of Statistics of China.

  • The central government issued (in Chinese) last month a circular that requires local governments to take measures to “raise residents’ purchasing power.”

Correction: changed sentence to identify Qingdao as a city in Shandong province which had incorrectly stated that it was in Jinan province.

Writing about semiconductors and telecommunications.