(London Post – DW) More and more Chinese citizens are giving their New Year monetary gifts through digital means. This is not considered heartless but cool. So cool that even the Communist Party is doing it, says DW’s Frank Sieren.
Passwords from presidential speech
Even the Communist Party has started giving e-hongbao to gain popularity among members. In the three days before the new year began, some 300,000 yuan (41,000 euros) were transferred via the WeChat messaging app by the “Communist Party Member” account.
To access the money, party members had to be well versed in the speeches of President Xi Jinping. The passwords needed to open the virtual red envelopes were gleaned from expressions that the president used in his new year speech. So far, 100,000 users have read the message and over 10,000 have “liked” it, but if the experiment is to be considered successful it has to reach half of China’s 80 million party members. This initial trial will likely be expanded next year.
Transferring money in this way has not been possible for that long. Tencent, one of China’s leading tech giants, only developed its app two years ago. However, the method is popular because it is easy to use and also has a playful element. The person giving a monetary gift decides on a sum that can be divided amongst a group of people. It’s the person who opens the envelope first who gets the most money – he or she might get 50 yuan, while the slowest could end up with only 10 or just five yuan.
Digital ‘red envelopes’ worth millions
The game is not only played in China. This year on New York City’s Times Square, WeChat users had the chance to win e-hongbao by shaking their smartphones in front of digital billboards at certain times when Tencent ran a lucky money promotion.
As digital monetary gifts become increasingly popular, rival tech companies are trying to increase their hold on the market. With 400 million users, WeChat is well ahead of Alipay – China’s equivalent of PayPal. The Communist Party chose to send its hongbao via Alipay, so that the gap did not widen further. Moreover, Alipay was allowed to join hands with China Central Television (CCTV) to hand out red envelopes worth 800 million yuan (109 million euros) to viewers.
The annual New Year gala is the most-watched TV program in China. China’s Internet companies predict that 10 billion yuan (1.36 billion euros) will be spent on e-hongbao in the coming days. For Tencent, the WeChat hongbao is a way of obtaining new users and gaining a larger share of the rapidly expanding online payment market.
It also suits the government because the hongbao is effectively a massive private social program with money being transferred from the richer to the poorer – all over the country – from the coast to the far west.
DW’s Frank Sieren has lived in Beijing for over 20 years.