Chinese New Year Technology

As the Chinese New Year rings in the year of the rooster, its internet giants are vying for the attention of smartphone owners for the third year in a row. Thanks to mobile technology, people all across the world are back in the red envelope game again.

The messaging app, WeChat allows users to send virtual red envelopes, which can be deposited into mobile payment accounts.

The scheme originated in 2014 as WeChat’s attempt to lure users on to its mobile payment system, WeChat Payments. It was wildly successful, leading tens of millions of smartphone owners to attach their bank cards to the app—thereby opening the door for purchasing rides, meals and other goods on WeChat.

Since then, gifting digital red envelopes has become a tradition. According to Tencent, WeChat’s parent company, users sent more than 8 billion red envelopes to one another by the end of February 8th 2016. That marks an eight-fold increase from the year prior.

Chinese New Year

The digital evolution of New Year’s greetings extends back two decades, prior to the advent of the social media age. From the late 1990s and early 2000s SMS messaging took off in China, mainly thanks to the proliferation of mobile phones. Since then SMS text messages have been widely used for New Year’s greetings. During the 2009 Spring Festival for instance, SMS traffic accounted for 19 billion messages.

In 2012, the launch of the Weibo (micro-blogging) service irrevocably changed the experience of Chinese New Year. The Spring Festival had gone online. Instead of the ‘interpersonal’ exchanges of text messages, New Year greetings moved to an open platform. During the 2013 festival Weibo recorded an average of 32,312 messages per second in the hours leading up to midnight. This broke Twitter’s world record of 25,088 tweets per second when Castle in the Sky launched in Japan.

Weibo’s dominance was short lived however. In 2013, the instant-messaging service known as WeChat (weixin) became the market leader in China’s social media revolution. With 400+ million subscribers and the innovative feature of the virtual red-envelope, WeChat has both reconnected tradition and redefined the New Year’s experience. Over 1 billion red envelopes were exchanged on Chinese New Year’s Eve. While the tradition of distributing gift money has been in play since the Han dynasty (206 BCE to 220 CE), the ritual is now digitized on a massive scale. Of course, the invention of an instant messaging app is not the only reason. This phenomenal change in the pattern of New Year obligations is underpinned by a surge in China’s digital economy, technological convergence, and more importantly a mature user mentality: in other words these days people are more comfortable with digital money and they trust the platform.

As this brief review of the history of digitising the Chinese New Year reveals, Chinese customs have been evolving with the development of technology. In my opinion, however, the real dynamic of this digital turn is not the change of the format/platform but the negotiated meaning of old practices. Take the example of the virtual red envelope.

Red envelopes are mostly given to children by older family members as a way to show their concern for the younger generation. The red envelopes exchanged on WeChat, however, abandon the hierarchical aspect of this practice: it is often used as bonus, one that you give in addition to the conventional New Year greeting message.

The WeChat app is now part of the entertainment for the New Year celebration; that is, it allows for the gamification of Chinese New Year. WeChat does not just provide one-to-one sending of red envelopes; it also has this feature to send a lump sum to a group of people, which WeChat disburses in several envelopes with random amounts; reception is on a ‘first come first served’ basis.

An important participant in this year’s virtual red envelope game is China Central Television’s (CCTV) New Year Eve’s Gala. One of the most watched shows in the world, the Gala last year gave out RMB 500 million yuan (£60 million) gift money during the four-hour show. Once the signal is sent out, WeChat users shake their phones to win the red envelope. Throughout the show 20 million people participated in this game, shaking their phones 11 billion times.

While WeChat is the most popular platform for gift money exchange this year, some other tech giants have also introduced similar services. Alibaba, China’s largest e-commerce company, launched its own gift money campaign: RMB 600 million yuan (USD 70 million ) was given away in virtual red envelops to its users during the New Year. According to Alibaba, 240 million virtual red envelopes were sent through its payment tool on sanshi, the day before Chinese New Year.

The economic benefits that accrue from such a massive nation-wide exchange of virtual capital is significant. Both companies have expanded their business into the world of money-market funds, it becomes essential for them to win Chinese people’s digital wallet. Imagine the potential market: there are millions of people who get hooked on WeChat’s in-app payment tool after using this new feature. To top up the WeChat payment account to give away more envelopes, people connect the app with their bank accounts. As WeChat is building its payment service into a one-stop platform where people can pay for my offline spending (taxi, phone bill, food ordering…), people may start to use their WeChat wallet more often when they are in China.

Chinese New Year

Some may criticise the commodification of an ancient tradition; but at the end of the day (or evening) is it really about money? From the public perspective such practices have little to do with money. As I mentioned above the amount of money placed in the red envelope is small. Most red envelopes I have received, for example, contained less than $2. In other words, it doesn’t matter how much you send to your friends, it is the well wishes sealed in the envelope that matter more.

The New Year Festival has been the most important day in the year. Nowadays, it is all about connections enabled by technologies. As people wrap their homemade gifts to family and  friends, they need the messaging app to send and receive free New Year greetings. They need video calls to ‘participate’ in family dinner parties. And they need Youtube to stream live video of the New Year Gala. All of these new media platforms connect overseas Chinese to their motherland.

The virtual red envelope is definitely a highlight of the Chinese Lunar New Year. What will be next? Oh that’s right…Pokemon Go will be the template for catching New Year’s digital cash gifts