How virtual red envelopes are revolutionising customer engagement in China

May 30, 2018

Ask any Chinese man or woman, boy or girl and one of their fondest memories of Chinese New Year is receiving a lucky red envelope or 'hongbao‘  full of crisp paper notes. Also given at weddings and other culturally significant occasions, these little envelopes of happiness are an integral part of traditional Chinese culture.


In recent years, online platforms such as WeChat have taken advantage of technological innovations in social networking, digital animation and online currency transfers to create a virtual 'hongbao' experience and the uptake among Chinese netizens has been unprecedented. 


Brands large and small have also taken advantage of virtual red envelopes to promote themselves across Chinese New Year. One notable campaign called the Alipay’s Blessing Card Red Envelope promotion saw millions of people register and shared the Alipay app for a chance to partake in a 200 million RMB prize pool. 


There are many creative ways to use the virtual red envelope feature on WeChat to generate engagement. In Chinese culture, a red envelope is often associated with good luck and the number 8 is associated with making fortune, so any strategy that touches on these two elements would naturally be very popular with the Chinese crowd. From random draws to lotto style money trees, teach year sees new spins to the formula. One of the simplest ways is the tried and true 'follow to receive a digital red envelope'.


The idea is simple, follow an account and you will receive a small digital red envelope from which you will receive a random credit amount to spend at the account's branded online store. Although the credit given can be quite a small number with 8.88 RMB a popular amount being worth just $1.50 USD, and yet the campaign has tremendous viral potential not only due to the implied cultural meaning during the holiday season but also as Chinese consumers love sharing red envelopes with their friends making it an incredibly cost-effective way to obtain new brand followers on WeChat.

There are some restrictions and guidelines in employing the virtual red envelope strategy. For starters, you must use or become a WeChat approved third-party app and your target audience base is restricted to those customers who have WeChat accounts with WeChat pay enabled. The number of red envelopes given out (participants) can be capped and each WeChat account may only claim a red envelope once.In this way, the brand has some practical controls to find the balance between their marketing expenditure and new fan acquisition. 


One stumbling block in using this strategy outside of China was the fact that to set up WeChat Pay one needed to also have an active Chinese bank account which severely limits the numbers of both overseas Chinese and non-Chinese citizens to send and receive hongbao's.


However a recent development now allows WeChat Pay to instead be connected to overseas credit cards foregoing the need for a Chinese bank account and making it possible to use virtual red envelopes to engage with audiences outside of China.


Source: Xinnet


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