Happy New Year with Wechat Lucky Money!
In China, the Chinese mobile app WeChat popularized the distribution of WeChat red envelope in 2014 via mobile payments over the internet. This method of distributing red envelopes is now quite popular in the country. During the Chinese New Year holiday, the mobile instant messaging service WeChat introduced the ability to distribute virtual red envelopes of money to contacts and groups via its mobile payment platform. The feature became considerably popular, owing to its contemporary interpretation of the traditional practice, and a promotional giveaway.
Adoption of WeChat Pay saw a major increase following the launch, and two years later, over 32 billion virtual envelopes were sent over the Chinese New Year holiday in 2016. While the likes of Mulberry and Dolce & Gabbana have been known to tap into the Chinese tradition of gifting money during Spring Festival, many other brands have found ways to benefit from red envelope’s evolving role in China’s mobile payments ecosystem.
WeChat has firmly positioned itself as a leader when it comes to the digital exchange of red envelopes, called “lucky money,” on its platform. Tencent claims that during last year’s Spring Festival season alone, upwards of 803 million people exchanged red envelopes through WeChat, up 10 percent. Obviously, consumers loved it. In fact, many experts agree that this particular occasion modernized a very structured and traditional way of gifting among family members in China for not only Spring Festival, but for weddings, birthdays, and other special events. But, more importantly, it helped consumers become more comfortable with sending and receiving money on a mobile app linked to their bank card.
With the growing comfort of exchanging money on a smartphone, the red envelope has led to the expansion of mobile payments into dozens of features on WeChat, including making charity donations, taxi payments, and ordering food. But making payments using red envelopes, as opposed to sending a more impersonal transfer or paying a bill, has its own function that persists throughout the year. First, for making peer to peer micropayments within WeChat’s messaging platform, and secondly through incentivized marketing, usually in the form of discounts.
Brands generally don’t directly benefit from friends exchanging money online, but occasionally one might engage in social gifting, sharing with friends red envelopes that are directly linked to vouchers from brands. For example, Starbucks has enabled users to send cups of coffee in the form of digital red envelopes to friends through its WeChat app.
There have been a number of other ways brands have adopted the concept of the red envelope in their daily marketing schemes through cooperation with WeChat Pay. After buying something in-store using WeChat Pay, consumers may, for instance, receive a red envelope with a surprise discount. Sometimes, payees are also prompted by the brand to send ‘lucky money’ to a friend, helping the brand expand its customer base.