The Spring Festival Gala never fails to generate astronomical amounts of traffic, and China’s internet companies have seized the opportunity to make it an annual “National Day for Red Pockets”.

Since WeChat Red Pocket made its successful debut in 2014, many others like Alibaba, Baidu and Kuaishou have joined the red pocket war in the following years. This year, the record-breaking RMB 7 billion in total proved the necessity for internet companies to value this particular traffic business. In fact, we can tell a lot about the evolution of their business strategies by looking at the history of this lavish scramble.



I. Tencent:From mobile payment market to refined operation


In 2015, Tencent signed an RMB 53 million exclusive sponsorship deal with the CCTV Spring Festival Gala, which started the drama of internet companies Spring Festival promotion. WeChat Pay before that show was only in its infancy, with less than 20% of market share in mobile payment, while Alipay, its competitor, was dominating the market, prevailing in e-commerce, corporate, offline, and e-bank scenarios. Thus, the strategy of WeChat was crystal clear: grabbing the mobile payment market.



In the Gala that year, Tencent synergized payment and its social platforms. By shaking their phones, viewers around the world can earn red pockets in real-time interactions. In merely two days, 200 million WeChat users tied their bank accounts to the app, a number that Alipay spent 8 years to reach. Tencent reported that by the end of March, 2015, Daily Active Users (DAU) of WeChat amounted to 549 million, 10% higher than the end of December 2014.

There is no question that the red pocket promotion in 2015 brought Tencent on par with Alipay and got the brand extensive exposure. Jack Ma, head of Alibaba, likened this move to “Pearl Harbor”.

After the surprising success, Tencent has been keeping a low profile in the red pocket business during Spring Festival holiday, but added emphasis on other major businesses to seek refined operation. This year, the feature Tencent product is Wesee, a short video app. Tencent rolled out the new function of “video red pockets”, and added Video Channel to WeChat. It seems that the short video will be Tencent’s focus this year.

The money in Video Red Pockets, after shared to Moments or group chats, can be obtained by users after watching. Some money is directly added to balance in WeChat Pay, and some needs to be withdrawn in Wesee. This is an innovation out of traditional red pockets, and its intention to attract new users from WeChat’s userbase is quite obvious. While innovating new functions, WeChat is also showing signs of refined operation this year.


II. Alibaba:Reinforce its market share


Alibaba learned its lesson from the 2015 failure: it spent big-ticket in 2016 and notched up an RMB 269 million exclusive sponsorship deal with the Gala.

In that year, Alipay released two games for users to earn red pockets: one where users keep tapping on the screen and one that requires users to complete a 5-card collection. Alipay also earmarked 800 million yuan to be shared by all its users across the country. Stimulated by the money, users added friends, traded cards and sent red pockets. These particular games were played 67.7 times during the Gala.



During the show, 324.5 billion interactions were made on Alipay in total, 29.5 times more than that on WeChat in 2015. It was a huge success and helped to reinforce Alipay’s position in the mobile payment market. Then from 2016 to 2018, Alibaba continued to be one of the sponsors to interact with the viewers and sent over 1.4 billion yuan in the form of red pockets. Alibaba has been heightening its impression on users by getting exposed on the Gala, thereby strengthening its market position.

This year, Taobao was also one of the exclusive sponsors of the show. It offered the biggest e-commerce discounts in the Gala’s history and picked up the tab for 50,000 users’ shopping carts. Meanwhile, Alipay continued its card collection red pocket game, which is gradually becoming a routine thing for Chinese people to do during the holiday. Over the years, Alipay kept the function basically the same and only added small innovations each time, which helps retain elderly users by lowering the threshold. The repetitive games can enlarge its userbase, cultivate their habits and bolster its e-commerce business, while guarding against other internet companies like WeChat, Pinduoduo, Tik-Tok, and Kuaishou.



III. Baidu:Building eco-system


After Tencent and Alibaba’s triumphs, Baidu followed suit, stepping onto the stage and completing the BAT trio. Its lackluster performance prompted its decision to put 900 million yuan into the sponsorship: in 2018, DAU growth of Baidu was sluggish, even negative. Therefore, the sponsorship was intent on drawing users into the Baidu ecosystem and improving their loyalty, so that the ecosystem could branch out to the mobile market, instead of being trapped in web browsers.

Baidu put the Gala red pockets in several of its apps, like Haokan video, Quanmin short video and Baidu Postbar. In the early card collection period, users could increase their chance by downloading Baidu apps; the money in red pockets could only be withdrawn from Duxiaoman. These rules revolved around Baidu’s ecosystem and fully leveraged the products.

That year, Baidu achieved good results. The peak DAU of its apps rocketed from 160 million to 300 million. The activity level and registered users of its product matrix saw significant increase, and many users continued their usage throughout the year.



In Spring Festival this year, Baidu demonstrated deep strategic thinking, just as a giant should, and innovated many red pocket activities. Accesses to the activities were distributed in many of its apps. The close connection between activities and the content ecosystem boosted users’ participation and encouraged users to try and stick to its products.

From the sponsorship of WeChat in 2015 to this year’s record-breaking RMB 1 billion red pockets from Kuaishou, the Spring Festival Gala has become an annual test for internet companies. To gain maximum traffic, every giant is contemplating their cards to win the game.

Obtainment of the sponsorship means an internet company is already on its way to draw users. In years after, the turf war will go on. How to mobilize viewers and activate existing users are questions to consider for future Gala sponsors.