China’s Spring Festival AI war
Red envelopes, gala slots, and shopping coupons turned chatbots into mass-market utilities.
In China’s Lunar New Year, luck is delivered in red envelopes, traditionally a small packet of cash, handed over as a blessing made tangible.
A decade ago, Chinese big techs learnt they could hijack that custom. Tencent launched WeChat Pay, its mobile payments service, on 5 August 2013; then, during the 2014 Lunar New Year holiday, WeChat Pay’s first “red envelope” push ran for seven days and drove more than 8 million people to open WeChat Pay and link a bank card, as users claimed roughly 40 million packets. Alibaba’s Alipay, a rival mobile payments service, hit back at the same time, saying its wallet handed out 200 million yuan’s worth of red envelopes over the seven-day break. The “red envelope war” became a milestone in Chinese tech marketing for how efficiently it force-fed a new habit: to get the money, you had to set up mobile payments first.
At the Spring Festival 2026, which ended earlier this week, the old trick has been repurposed for a new onboarding job. Tencent, ByteDance, Alibaba, and Baidu have wrapped this well-worn red envelope game around their large language model apps, turning the holiday into a nationwide AI war fought with lucky money.
The playbooks diverged, but the objective was the same: make AI feel ordinary. Tencent paired red envelopes with “Yuanbao Pai”, turning the bot into a default add-on in family and friend threads. ByteDance plugged Doubao into the country’s biggest shared screen, nudging viewers to use prompts for greetings and avatars as casually as sending a sticker. Alibaba wired Qwen into everyday consumption, using subsidies to teach a simple reflex: ask the chatbot to place the order. Baidu took full advantage of its dominant search engine by embedding its Ernie Assistant in its website and app.
Yuanbao: Tencent’s social AI
Tencent is betting that AI spreads best when it rides on social habits, rather than treated as yet another “productivity” app.
Yuanbao invites WeChat users to start a “Pai” thread—a group-chat-style feature in which Yuanbao joins as a participant. The pitch is that Yuanbao is less a chatbot tab than an extra voice in the group chat: the friend you can @ to fact-check a rumour, sketch a trip, or keep the conversation going.
From 1 to 17 February, Yuanbao handed out $140m in cash vouchers, with red envelopes worth up to $1,447, and additional lucky-draw entries unlocked by completing AI “tasks”. Users could, for instance, ask it to debunk health rumours forwarded by older relatives, estimate the calories in a New Year feast, or organise a remote movie night.
Pony Ma, Tencent Chairman and CEO, said internally the aim was to recreate the company’s own red-envelope breakthrough a decade ago on WeChat. It seemed to have worked: Mere hours into the New Year push, Yuanbao topped Apple’s Chinese mainland free-download charts.
Then came the comic twist that only a conglomerate of Tencent’s size could stage: the promotion spread so aggressively through WeChat group chats that WeChat itself stepped in. WeChat restricted Yuanbao red-envelope links from opening directly inside the app—a reminder that China’s default messaging utility cannot let viral growth tactics swamp the infrastructure people rely on, even when the traffic is coming from inside the same corporate family.
The snag did not last, though. Yuanbao quickly shifted away from clickable links to a workaround-style “password” share that could travel without triggering WeChat’s tripwires. On 18 February, Tencent announced Yuanbao had passed 50 million daily active users and reached 114 million monthly active users. Over the holiday, it logged 3.6 billion lucky-draw entries and more than 1 billion AI tasks. To keep up, developers rolled out 159 new features in just 21 days.
Doubao: ByteDance’s agent goes big
If Tencent tried to socialise AI, ByteDance tried to turn it into infrastructure—something that could support national broadcasting. Doubao’s holiday push was bolstered by its constant on-screen presence on the CMG Spring Festival Gala, produced by China’s state broadcaster and the country’s biggest annual television event. Official figures for the 2026 Gala, broadcast on 16 February on Lunar New Year’s Eve, put average concurrent viewers/listeners at about 325 million per minute, with a peak above 400 million, and a 79.29% share of the national TV audience.
Speech Recognition Model 2.0 of Doubao was used for real-time lyric translation and background information during the show. Seedance 2.0, Doubao’s video-generation model, provided technical support for stage presentations, with AI-generated visuals blended into the live stage setting.
Seedance 2.0 is so good that it’s spooked Hollywood. Disney, Warner Bros. Discovery, Paramount, Skydance, Netflix, and Sony Pictures all sent cease-and-desist letters to the company, alleging copyright infringement. Bytedance responded shortly before the Gala, saying it was “taking steps to strengthen current safeguards.”
During the show, users were also invited to log in to the Doubao app to generate festival avatars, make short greeting videos, and enter prize draws for cash red envelopes (up to $1,286) or tech gifts such as robots and consumer electronics.
ByteDance said it logged 1.9bn AI interactions on the day the Spring Festival Gala was broadcast, with Doubao peaking at 63.3 billion tokens a minute, a little over ten times higher than OpenAI’s average API throughput. It also said that users generated tens of millions of festival avatars and over 100 million greetings during the show.
ByteDance launched Doubao in August 2023 and, within a year, it became China’s most popular AI chatbot. By late 2025, Doubao already boasted 170 million monthly users and around 155 million weekly users, well ahead of most domestic rivals. An upgrade, Doubao 2.0, arrived just before the Lunar New Year, billed as an “agent-era” upgrade that shifts from neat Q&A to executing complex, real-world, multi-step tasks.
Qwen: Alibaba’s AI box of tricks
Tongyi Qianwen, Alibaba’s LLM series also known as Qwen, used the Spring Festival to hard-wire a new habit: “ask AI, then buy.” On 2 February, it announced a $434 million “Spring Festival Treat Plan”, tying Qwen directly to Alibaba’s own business units—Taobao Flash Sales (local services and food delivery), Fliggy (online travel bookings), Damai (event ticketing), Freshippo (supermarket chain and grocery delivery), Tmall Supermarket (online grocery and household staples), and Alipay (payments and wallets)—so a prompt could become a purchase.
From 6 to 12 February, updating the Qwen app unlocked a $3.6 voucher, redeemable at 300,000-plus tea-and-coffee outlets across the country. To use it, users had to place the order inside Qwen’s chat box. Each referral triggered another $3.6 voucher for both the inviter and the newcomer, capped at 21 per person ($75 in total), which helped the campaign spread quickly. Reuters reported that, on 6 February, Qwen’s daily active users jumped from 7 million to 58 million, just 23 million shy of Doubao on the same day.
The subsidies worked almost too well: Qwen’s own figures put orders of tea-and-coffee via the Qwen app at 1 million within three hours, 5 million within five, and 10 million within nine—enough to crash the app and briefly halt coupon issuance, before Qwen announced the push would continue through 17 February.
Alibaba also bought old-media reach. Qwen was the exclusive sponsor of four provincial Spring Festival galas—Shanghai, Zhejiang, Jiangsu, and Henan. Beyond flashy visual effects, it appeared as an “AI actor”: ordering takeaway in a sketch, partnering with a magician, and sparring in a crosstalk. The point was not that the model can do theatre. It was that Alibaba wants Qwen to live in the seams of daily life as an always-on helper sitting between a prompt and the next errand.
Ernie: Baidu’s in-built AI chatbot
Baidu also ran a Spring Festival red-envelope campaign, but with less fanfare than the others. Baidu’s Ernie Assistant put $72.3 million on the table, running from 26 January to 12 March, and tying rewards to using Ernie features such as photo search and AI video creation inside the Baidu app.
The strategy is to graft AI onto existing user behaviour. The company’s flagship Baidu app—China’s nearest but dwindling wannabe of Google —still claims roughly 700m-plus monthly active users. Ernie bot, meanwhile, has reportedly passed 200m monthly active users, even before the holiday push.
It’s a curious number, though, as it shouldn’t be attributed to any standalone apps or websites, but the users who clicked the Ernie button within the existing Baidu search engine. In other words, the 202 million monthly active users for Ernie Assistant reported today are among its search users, not in addition to them.
Baidu is often teased for “setting off early, only to arrive late”—an early mover that struggles to stay the pace. The firm was first among China’s big platforms to ship a ChatGPT-like product in 2023, but has since faced a harsher consumer-AI market and has been considered outsmarted by ByteDance, Alibaba, and Tencent.
After the fireworks
By chaining chatbots to red envelopes, galas, and shopping carts, Chinese big tech is spending real money to make LLMs feel less like a Silicon Valley novelty and more like another utility app. The question is what happens after the fireworks: whether these assistants become a habit, or fade once the subsidies do.
So far, Tencent, Alibaba, and ByteDance have all achieved the landmark 100 million monthly active users. Among smaller rivals with significantly fewer resources, DeepSeek, which shocked the world a year ago but has stalled in releasing a new model, also made the list.
P.S.
Check out my op-ed in today’s Financial Times
 | A guest post by
|