WeChat Lucky Money Game in Chinese Lunar New Year: An Aggressive Way to Get Investment
Responding to the huge success of Wechat Lucky Money in 2014, the e-commerce giant in China, Alibaba also launched the Lucky Money Giveaway on their official website, delivering 1 billion Yuan (equal to about 1.6 billion USD) to all Alipay users. You don’t have to participate in any silly 10-minutes survey or fill out any application forms to participate on Alibaba website.
Today is Chinese Lunar New Year. My Wechat Moment, which is similar to the wall of New Feed on Facebook, is filled with screenshots of Wechat Lucky Money.
Lucky money, which is “Hong Bao” in Chinese, has more than 2000 years history in China. Traditionally, It was given in a red paper packets filled with cash from the elder generation to the young generation or from married couples to unmarried people as gifts during Chinese Lunar New Year. According to Guangzhou Daily, in only 3 days of the Chinese Lunar New Year in 2014, Wechat users exchanged about 8 billion Yuan (equal to about 1.29 billion USD) by giving lucky money to their friends via their Wechat mobile wallet. There is no official announcement about the number of new credit cards connected with Wechat account in those three days, but Wechat already hit the number of 2 billion users at the end of 2014.
1.How to play the game?
The game begins like a lottery. Users do not know how much money they will receive until they open the red packet on their phone. The difference between Wechat and Alibaba Lucky Money game is: In Wechat, you get money from your friends or family, not from the company Tencent; In Alibaba, you get money from the company Alibaba, not your friends or family.
2.How does Wechat earn money when friends and family only exchanged money within their circle?
During the Chinese Lunar New Year 2014, I also participated in one Lucky Money Giveaway from my friend on Wechat, even though I did not connect any credit cards with my Wechat account. I got about 40 Yuan (equal to 6.7 USD) in the lottery and never took it out in the past 365 days.
The users who want to give Lucky Money out are required to link their Wechat account with their credit cards or bank accounts, but the users who participate the lottery and receive money are not required to have credit cards linked. Assuming that only 2% out of 2 billion Wechat users did not take the money out after they received the lucky money with the average giveaway 10.7 Yuan (according toTechNote), then 428 million Yuan (equal to about 69 million USD) stays in the bank account of the company Wechat for over 1 year. In other words, Wechat borrows 69 million USD with NO interests for 1 year! I don’t think any investment banks in the world would like to lend out the loan of 69 million USD without any interests.
3.Why is mobile payment feature embedded on a chatting tool?
After cheering for the smart move of Wechat, we can see the ambition of Tencent in mobile payment market. They successfully achieved their first step in only three days of Chinese Lunar New Year in 2014 and 2015 – dramatically growing the number of users that linked their bank accounts/credits card with their Wechat account with almost no cost on advertisement or sales agent.
The article published on International Business Times quoted from iResearch that”Alipay Wallet currently controls 82.6% of the Chinese mobile payment market, while Tencent Tenpay service has a 10% market share”.
Wechat is definitely ready for their second move – promoting Wechat mobile online stores on Moments, which is similar to the advertisement with “Sponsored” label on the wall of New Feed on your Facebook account. Wechat is more aggressive than Facebook in this case: you can directly purchase products directly from the advertisement embedded on Wechat in the near future but Facebook does not allow you to purchase things within Facebook public page.
Wechat is available on either Apple App Store or Google Play but not Fire OS developed by Amazon on Fire Phone. Will Wechat steal Alibaba’s dominant position in Chinese online payment market? Let’s watch.