Red Envelopes Go Digital

With the arrival of the 2014 Chinese New Year， Tencent’s social networking platform WeChat found a way to turn the traditional practice of sending hongbao， red envelopes filled with money， digital with its “New Year Hongbao” app， which took China by storm.

Tradition Turns Digital

As Lunar New Year’s Day approached， Zhang Lei， who works with an internet music company in Beijing， noticed the latest version of WeChat had a new feature enabling her to give or receive virtual hongbao to or from her friends. “During the seven-day Spring Festival holiday， I distributed ‘red envelopes’ totaling more than 200 yuan via the app， and got back half of the amount I gave，” she reveals.“Although the smallest hongbao contained only 0.01 yuan， my friends and I still had great fun exchanging the envelopes.”

Launched on January 26， 2014， just a few days before Chinese New Year， the app allows a user with a linked bank account to use his or her phone to send virtual red envelopes with a limit of 200 yuan each to certain friends. Users can also let the app randomly divide money among a group of friends. To cash out the envelopes they receive， users are required to link up their own bank accounts. In a few days， the feature spread like a virus among smartphone users.

Statistics released by Tencent show that more than 8 million WeChat users sent or received 40 million “red envelopes” over nine days from January 30 to February 7， 2014. The peak occurred on Chinese New Year’s Eve， when 4.82 million people used the feature. Over 25，000 red envelopes were opened per minute around midnight， each with an average amount of 10.7 yuan. Combined with one of the most popular social networking apps， the traditional practice of sending hongbao on Chinese New Year generated widespread delight among WeChat users.

Red symbolizes good luck in Chinese culture， and Chinese people have a tradition of gifting cash in a red envelope on special occasions. The custom originated about 2，000 years ago when seniors began giving money to young children as a prayer for good luck and safety in the new year. Over the passage of time， the tradition evolved into a popular way for the sender to express good wishes to his or her friends and relatives on occasions such as weddings， childbirth， housewarmings， business opening， and birthdays. As China has become more commercial， however， the nature of the tradition has evolved alongside it， from a way to express wishes to a method to build and consolidate social networks and even to offer bribes. For some concerned with keeping up with the Joneses， giving away money has even become a financial burden.

An important factor in the popularity of WeChat’s “New Year Hongbao” app is that it captures the spirit and essence of hongbao – exchanging blessings. It limits the amount of money in each red envelope to 200 yuan， which eases potential pressure on both the sender and receiver.

Social Networking Apps Gain Steam

The viral spread of WeChat Hongbao was aided in no small part by the tremendous user base of WeChat， one of the mostused social networking apps in China and even the world.

In fact， similar apps， such as Alipay Hongbao and eWallet Hongbao， emerged before WeChat launched its incarnation. Despite the fact that each red envelope sent via Alipay Hongbao averaged about 50 yuan， much higher than WeChat， the latter drew much greater attention than any of its competitors. Even Jack Ma， chairman of Alibaba Group， one of China’s largest e-commerce platforms and a major rival of Tencent， reportedly likened WeChat’s red envelope craze to “the attack on Pearl Harbor” due to WeChat’s surprising strike against Alipay’s online payment service.

Industry insiders attribute WeChat’s success to its existing social networking functionality. According to Liu Qicheng， editor-in-chief of CWW.net.cn， a comprehensive telecommunications information website， WeChat’s advantage in social networking leaves it head and shoulders above other products. “Compared to WeChat’s red envelope feature， Alipay Hongbao is similarly convenient but lacks the fun of interacting with friends instantly，” he explains. “Users like to pay online via Alipay， but WeChat is definitely their first choice when they want to communicate with their friends.”

Along with the increasing ubiquity of smartphones and the mobile internet， social networking and messaging apps such as WeChat， Yixin， and Momo have become indispensable pieces of daily life. The China Social Networking Research Report 2013 released by China Internet Network Information Center indicates that 86.9 percent of Chinese internet users have used instant messaging apps， of whom 61.9 percent are WeChat users. Social networking apps have become not only important tools for people to contact each other， but also major channels to obtain and share information. Some even provide services like ticket booking， payment， and online shopping.

As one industry insider remarks， social networking apps are more than just tools， but have become a way of life in modern times.