Every September, Chinese tech majors kickstart a series of charity events, such as Alibaba’s Sept. 5 Charity Week and Tencent’s Sept. 9 Giving Day. Since this tradition of “charity month” in China was pioneered eight years ago by Tencent, these peer-to-peer fundraising campaigns have become the primary way that the general public in China gets involved in charitable donations to non-profit organizations.
Similar to Alibaba’s famous Singles Day shopping festival, these mega campaigns are led and hosted by internet companies and their respective platforms. Platforms will often offer generous fund-matching policies and incentives to encourage donations.
However, the past year has not been known as an easy one for most Chinese tech companies. Internet giants including Tencent and Alibaba reported slowing year-on-year revenue growth, while ByteDance reportedly cut a large number of staff across departments, including in sectors like edtech and gaming that were robustly growing before being hit by regulation changes.
Amid an economic slowdown, weak spending, and regulatory pressure, what’s the draw for Chinese tech companies spending on charity events?
Why are Chinese tech majors organizing giving events?
Although the charity frenzy usually declines after the promotional period, it still creates substantial short-term traffic for the platforms at a time when users are increasingly hard to gain and retain. According to Tencent’s published data, more than 58.16 million donors participated in this year’s Sept. 9 Giving Day and total public donations amounted to RMB 3.3 billion (USD 476 million). “Charity festivals look good to the public at a time of distress, and are a very visible way to take on social responsibility for corporations,” said Rui Ma, China tech analyst and investor.
It’s an important period for the NGOs too. “Every September has become an unofficial carnival for non-profit workers,” said Jenny Yue, a volunteer at a Beijing-based charity organization, “marking it the most active time for Chinese non-profit professionals and an unofficial team-building experience.”
Yue stated that the pandemic had hit NGOs hard, with a lot of initiatives dying out and a significant shrinkage of funds for those that remained. Efforts during the charity month have therefore become paramount to building a strong donor base, and for some, survival. “Sept. 9 has almost become a ‘must’ instead of an option for non-profits,” Yue said. Omnipresent promotion from platforms, including Tencent’s super app WeChat, helps bring in more attention than these organizations could ever get otherwise. NGO workers thus tend to use all the resources at hand to make the most out of the festival. They recruit volunteers who care about the cause and train them specifically on how to use the platforms and navigate their charity month campaigns in order to maximize their impact during the festival.
The platform rules, however, while bolstering the donation process for charities, also create barriers for fundraisers, especially grassroots ones. Some small non-profits lacking organizational capacity or digital know-how are prone to get left behind during this period. ByteDance’s DOU Love Charity Day reportedly sparked some debate regarding its mechanism for matching fund distribution – fundraisers can only get promotional codes and bonuses based on the number of new users attracted to the platform.
Yet as internet companies rise as definitive players in the field of philanthropy, more thoughtful engagements are expected to transform the decades-old charity practices in China.
The state of philanthropy in China
Unlike the US, where 80% of charitable donations come from individuals, 80% of charitable donations in China come from the corporate sector, according to the charity research platform Global Giving. This data reflects the challenge of fundraising in China: the country’s modern philanthropy ecosystem only began to form after the 1980s market reforms and has taken hits ranging from executive scandals and corruption to complicated bureaucracy and digital revolutions before it has really had a chance to bloom.
Peer-to-peer social fundraising thus became a fertile ground for Chinese social media giants to establish dominance and differentiate themselves. In 2018, the Chinese Ministry of Civil Affair announced a list of 10 companies that were authorized to raise funds, effectively making mega internet companies the only players allowed to conduct online charitable fundraising alongside a few government-backed organizations. “Social media serves as a perfect pool of traffic that leads to the act of donation,” said Jonathan Yi, a Chinese internet analyst. “The WeChat-based Sept. 9 Giving Day is uniquely advantageous when it comes to raising funds through mobilizing individual volunteers and their social circle. ”
This year, Tencent upgraded its social token “little safflower” game to encourage wider participation in the annual campaign. Contributors could collect “little safflower” not just by donating money, but also through participating in charity activities, such as collecting running mileage and doing other good deeds on Tencent platforms, all adding to the final number of “little safflower” and the corresponding matching donation. “The sharing-donating-sharing chain perpetuates itself among a network of acquaintances, and formulates a virtuous circle,” said Yi.
The same goes for Douyin, another social app based on human-to-human interaction, an existing user habit that charitable donations could be built on top of. In 2020, ByteDance was finally approved by the Ministry of Civil Affairs as an authorized online donation platform. However, unlike WeChat, which retains regular social interactions, Douyin leans heavily towards a creator-consumer relationship. The platform thus tailored its matching fund policy to attract new users: donations from newly signed-up users are multiplied by 20 and matched by the platform.
This is not the first time that ByteDance has tried to leverage the social function of its apps for charity. On the global version of TikTok, creators can pick a charity of their choice to display on their profile, designating not just a call to action but a sense of identity.
Differentiation through giving
Tencent, which boasts the longest-running and most widely-participated charity festival, is moving beyond just donations and starting to further its all-encompassing ecosystem into business-to-business areas. Digital Toolbox, a package of a plethora of Tencent services including Tencent Cloud, Tencent Doc, and Tencent Meeting, was an initiative Tencent designed to help NGOs digitize. The Chinese tech giant has also launched an accessible version of a full range of products including WeChat, QQ Mailbox, QQ Music, and Tencent News to support individuals with disabilities.
On the other hand, Alibaba, as an e-commerce platform, has made empowering small merchants its priority. Starting in 2019, Taobao enabled merchants to label some of their items as “charity products”, meaning a portion of the revenue will go to a charitable cause of the store owner’s choice. In 2022, 2.2 million Taobao merchants participated in this campaign, while 500 million consumers supported the initiative.
Although its education unit is undergoing a major reorganization, ByteDance is still actively working to build an education empire off of its influence. In its 2021 ESG report, the company listed “education equity” as its “highly important” top value, ahead of “technological innovation” and “originality protection.” This year, ByteDance started multiple education-related initiatives, including one dedicated to helping Fujian primary schools in rural areas gain access to digital education.
Despite economic stagnation, China’s tech majors are very unlikely to stop hosting charity festivals. In fact, they might rely more heavily on peer-to-peer donations and extend their influence further into users’ everyday life. At a time when major internet companies are trying to cut costs and increase efficiency, regular charity events could become another form of marketing for them.