Chinese social media series: Since February 2016, Alipay become more “Social”?

This is part one of our Chinese social media serial. A new upsurge in a virtual red envelope was originated in 2014 during the Chinese lunar New Year. During the Chinese New Year in February, it has been a tradition to distribute red envelope to friends and family to bid farewell to the past year and give a joyful welcome to the new one.

Here are a bit history and background about virtual Red envelope

The concept of the virtual red envelope was initiated in 2014. The battle was launched by WeChat, which was developed by Tencent against Alipay. This fever is called “the Pearl Harbor Attack” by Jack Ma, the founder of Alipay. This concept was introduced by linking users’ bank account with the “digital wallet” function inside WeChat, which allowed users to send “real money” directly via WeChat to others. According to Forbes, more than 40 million online red envelopes were exchanged during the Spring Festival in 2014, which equals to $64 million.

Tencent had created and taken advantage of this red envelope fever to tap into the online users’ pockets. It’s the biggest competitor, Alibaba would also like to see if they can ride the “Red envelope fever” to leverage the business as well. In order not to lose the battle, Alipay also expedites its online red envelope drive.

The latest revolution of virtual Red envelope in 2016

Just at the beginning of 2016, the newest version of Alipay launched a new function, which is called “Shoop-shoop(咻一咻)”. They want to invent a buzz word called “Shoop-shoop”, the meaning is sort of like the sound created when you use your Apple play to buy for a Starbuck coffee, imagine if it has a sound coming out from the transaction. After the invention, many restaurants and shops, including KFC and Watsons had taken advantage of the new Alipay “Shoop-shoop|” function to create a Chinese New Year campaign to engage with customers and stimulate sales.

2016 KFC Chinese New Year’s Red packet Campaign with Alipay

Starting from 3rd February 2016 and during the Chinese New Year, when customers bought a big chicken basket meal in KFC China, they had a chance to win virtual Red packet money. The concept was similar to “cash back” from purchase. Customers could share Alipay’s red packet money to three of their friends to get the voucher. This campaign was designed to generate social media engagement and stimulate sales at the same (Since a lot of Chinese people will return to their home town during the CNY festival, so the campaign hoped to remind those people to grab a meal nearby the train station). Instead of promoting various products – burgers, sandwiches, spicy chicken pieces, KFC picked and promoted one key product –big chicken basket since it is the key and higher value product. Of course, the Alipay CNY campaign was only one of the spectrums of the whole online marketing strategy, for KFC, offline marketing strategy is also very important, including retail pop-up display, subway/Tube station advertising, Road advertising, coupons, leaflet, etc. With the right product, pricing, Online to offline marketing and sales strategy (O2O), PR, etc, it is a typical example of a big corporate’s integrated marketing strategy and campaign initiative in China.

Watson, a Chinese personal care convenient store, which is popular in the Southern China region, had also taken advantage of the new Alipay function – “Shoop-shoop” and launched a Red packet coupon campaign in the Chinese New Year. There are two methods of winning coupons, one took a chance to see if you are lucky enough. Another method was to buy something in the store. Users have to spend a certain amount of money to obtain a higher value of a coupon.

Adhering to Alipay “Shoop-shoop” new function, companies can ride on the new trend to stimulate interaction and among customers. Alipay revealed that the “Shoop-shoop” function will become a regular part on the Alipay homepage.

This year during Chinese New Year, Alipay brought a new way of snatching red envelope game into the light. It aims to make users collect all five “blessings” (Blessing in Chinese is called福). What is more, the campaign promised that online users could share RMB$215,000,000 for the festival. Thus, thousands of Alipayers started to add as many friends as possible on their account, so that they could exchange those “blessings” others need. For New Year eve alone, 8 hundred million red envelopes were exchanged this year. As a result of the allure of money, it suddenly created a fever of adding friends on Alipay. According to statistics from Chinese media www.gmw.cn, more than one-fourth of an interpersonal relationship established on Alipay was reactivated during this blessing collecting game.

However, quite a lot of Chinese Internet users hold a critical view of the Alipay strategy. They thought that the game design was too complicated for users whose purpose is just to have some fun. Also, many users feel that their effort of collecting the “blessings” was finally ruined by the last one, devotion blessing. But that was not because you have worse luck than others, it is the intention of Alipay company. According to Chinese media www.money.163.com, only 0.8% of users can collect all five blessings. Such a low rate of winning discouraged many people to attempt any more and thus become a useless promotion of Alipay.

Although there are both positive and negative comments about the red envelope snatching, this year, China Central TV Station (CCTV – a government-owned, powerful media in China) had cooperation with Alipay during the Spring Festival Gala. Together, they will create episodes such as “Shoop-shoop” and distributing “Fu(福)”(means blessing) that invigorate the Chinese Lunar New Year. This means that Alibaba had maintained a good relationship with the Chinese government that allowed them to get Chinese media support.

Even though this red envelope fever has spurred on a tug of war between Tencent and Alibaba. According to a Chinese source http://junstapo.baijia.baidu.com/article/290286 ) On the other hand, it also resorted to cooperation between Taobao, Tmall, Weibo, Amap and so on, these brands are planning to work together to excogitate further promotion using the red envelope effect.

All in all, payment is a foundation for Internet finance. By introducing the red envelope snatching game, Internet companies are gradually cultivating users’ habit of e-payment such as telephone bill payments, movie tickets, etc. Thus, the red envelope snatching is more than just a game. It creates value for users.

In my opinion, Alibaba and Tencent are the cornerstones to lead China to get involved with e-commerce and mobile commerce business because online purchase requires the support of Internet finance. They are the innovators, and to make a country success, it is important to have an innovative leader, a change-maker to make the world a better place. We need more change makers in this world.

For retailers, Chinese e-commerce and m-commerce, mobile app owners, it might be worth to think about what we can do with Alipay into our Chinese social media mix. However, creating an effective campaign is harder than what you think, especially when nowadays Chinese customers are very smart and consumers see all kinds of campaigns – some fake and some real. Drawing from a recent Alipay incident, we can learn a lesson – if the chance for getting a coupon is very low or they see Internet users and friends are complaining that the chance is very low, then the majority of the customers do not have the motivation to play the game.