WeChat’s virtual red envelopes prove a viral hit

WeChat’s virtual red envelopes prove a viral hit

Staff Reporter 

2014-02-05

A WeChat user receives a virtual red envelope during Chinese New Year. (Photo/CNS)

Chinese tech giant Tencent’s idea to allow users of its WeChat messaging app to send out “virtual red envelopes” during Chinese New Year has proven a huge hit, reports the Shanghai-based Oriental Morning Post.

Tencent launched the feature on WeChat on Jan. 28 to allow users to give electronic versions of “hongbao” — red envelopes containing cash traditionally handed out during Chinese New Year — to family and friends on their contact lists. The amont of money handed out in each transaction is relatively small, generally ranging between 0.10 yuan to 100 yuan (US$0.02 to US$16.50). To add a bit of fun, the sender can decide how much to hand out in total and to how many people, but it is left up to the app to randomly choose how the money is divided and to whom.

Data compiled by Tencent showed that from Chinese New Year’s Eve to 4pm on the first day of the lunar calendar, Jan. 31, more than 5 million users tried out the feature to deliver in excess of 75 million virtual red envelopes. An average of 9,412 virtual red envelopes were received every minute during this period.

The viral success of the feature could extend far beyond Chinese New Year, as tech analysts point out Tencent’s likely real purpose: to make users link their WeChat account to their bank accounts — a prerequisite to both sending and receiving the virtual hongbao — and thus substantially strengthening Tencent’s ability to charge WeChat users in the future.

Bill Bishop, an expert in Chinese tech companies, says Tencent’s red envelope idea is a “nightmare” for Jack Ma, the executive chairman of the rival Alibaba Group. Ma himself reportedly likened Tencent’s red envelope craze to “the attack on Pearl Harbor,” a reference to the surprise military strike conducted by the Imperial Japanese Navy against the United States naval base in December 1941.

Meanwhile, controversial Chinese philanthropist Chen Guangbiao has denied being involved in a scam that used WeChat’s red envelope feature to cheat users out of their hongbao money.

In the lead up to Chinese New Year there was a rumor that Chen, who recently made headlines for boasting that he wanted to purchase the New York Times and later the Wall Street Journal, intended to give out as much as 20 million yuan (US$330,000) in virtual hongbao money via WeChat. This prompted many WeChat users to add a person who claimed to be him — complete with a profile photo and the handle “Guangbiao” — to their contact lists in the hope of receiving a red envelope from the billionaire.

Instead, the user did not give out any money himself but ended up receiving a significant financial windfall in return from users who added him.

Chen told China’s official Xinhua news agency on Saturday that he was not in any way involved in the scam and urged those who were misled to contact the authorities.