Billion-Yuan Red Packet Kickstarts the Lunar New Year Showdown, as AI Apps Battle for a Nationwide Moment

Pony Ma’s call to “relive the joy of grabbing red packets” has sounded the opening bell for an AI-powered Lunar New Year user-acquisition blitz. As the giants open their wallets, smaller players without the firepower to burn cash can only double down on sharpening their fundamentals.

As the Spring Festival approaches, AI applications are lining up to put real money into users’ hands.

Tencent’s Yuanbao is expected to launch its Lunar New Year red packet campaign on February 1, with a total payout of up to RMB 10 billion. Individual users could receive rewards worth tens of thousands of yuan. Pony Ma has publicly expressed his hope to “recreate the scale and excitement of the early WeChat red packet days.”

ByteDance’s Doubao has chosen a different battlefield: the Spring Festival Gala. Volcano Engine will serve as the exclusive AI cloud partner for the CCTV Spring Festival Gala, while the Doubao AI assistant will roll out a variety of interactive features during the event—red packets included.

Baidu’s Wenxin is taking a dual-track approach. From January 26 to March 12, users who interact with the Wenxin Assistant in the Baidu App can share a total of RMB 500 million in cash red packets, with individual rewards reaching up to RMB 10,000. At the same time, the Baidu App will act as the chief AI partner of the Beijing Television Spring Festival Gala.

The scene feels strikingly familiar. It echoes the cash-fueled user acquisition wars of the mobile payments and short-video eras, when tech giants spent lavishly during the holidays to pull users into new habits. Once again, the goal is to replicate a WeChat Pay–style “surprise attack,” and to help AI applications seize that elusive “nationwide moment” they have yet to achieve. Winning user mindshare is also a prerequisite for unlocking viable paths to monetization.

The question is whether this new AI red packet war can still produce legendary outcomes, now that mobile internet user growth has plateaued and attention is more fragmented than ever.

Spring Festival: the ultimate battleground for internet products

Burning cash for user growth during the Spring Festival has long been a proven playbook for China’s internet giants.

This year, in addition to Tencent, ByteDance, and Baidu Wenxin, Alibaba is also entering the fray. Qwen has announced its title sponsorship of the Jiangsu Satellite TV Spring Festival Gala, and according to LatePost, the Qwen App will distribute red packet rewards to users throughout the holiday period.

The scale of these investments underscores a clear objective: pushing AI applications into the mainstream. This is not mere festive marketing, but a strategic land grab grounded in hard-earned historical lessons.

Over the past decade, the Spring Festival has repeatedly proven to be the ultimate launchpad for internet products seeking a “critical leap.” The relaxed, family-oriented atmosphere concentrates nationwide attention, creating a rare window where user habits can be reshaped at scale—sometimes permanently redefining industry power structures.

On Chinese New Year’s Eve in 2014, WeChat Red Packets made a stunning debut. Through viral social sharing, they ignited nationwide participation overnight. Jack Ma famously described this moment as a “Pearl Harbor–style surprise attack,” as WeChat Pay gained 8 million linked bank cards almost instantly.

The following year, WeChat escalated its offensive by partnering with the CCTV Spring Festival Gala. Viewers shook their phones to grab red packets, with prizes totaling RMB 500 million in cash and RMB 3 billion in coupons. The result was historic: in just two days, WeChat Pay surpassed 200 million linked card users—achieving in 48 hours what Alipay had taken nearly a decade to build.

Alipay responded with initiatives like “Collecting Five Blessings,” which further cemented red packets as a Spring Festival ritual.

These battles demonstrated a core truth: Spring Festival plus the Spring Festival Gala is a “strategic nuclear weapon” capable of reshaping user behavior and driving exponential growth in an extraordinarily short time.

Red packets were instrumental in making mobile payments a daily habit. By 2017, WeChat Pay had 800 million linked-card users, while Alipay reached 500 million active users. Surveys by Penguin Intelligence showed that 82% of users first tried WeChat Pay through social scenarios such as sending or receiving red packets, making red packets the gateway to payment habits.

After mobile payments came the intense Spring Festival showdowns between short-video platforms.

In 2020, Kuaishou partnered exclusively with the CCTV Spring Festival Gala, launching another red packet offensive and investing RMB 3–4 billion, a record at the time. QuestMobile data showed its daily active users peaking at 282 million during the holiday, up from just over 200 million beforehand.

Douyin countered by turning to regional Spring Festival Galas, collaborating with eight provincial broadcasters and investing RMB 2 billion. In 2021, the roles reversed: Douyin took center stage at the CCTV Gala with a RMB 2 billion budget, including RMB 1.2 billion in cash red packets on New Year’s Eve alone. Kuaishou responded by partnering with ten provincial galas, matching Douyin’s spending almost yuan for yuan.

Unlike mobile payments, red packets in the short-video era were not only about acquiring new users but also about boosting engagement—encouraging longer sessions and higher usage frequency through subsidies.

History has forged a clear rule: whoever dominates user interaction during the Spring Festival, China’s largest traffic pool and cultural ritual, stands a real chance of rewriting the traffic landscape.

For AI applications locked in fierce competition and hungry for both scale and real usage data to improve their models, the strategic value of this moment has never been greater.

Behind the AI spending spree: big tech’s anxiety

Compared with mobile payments and short video, AI’s motivations for Spring Festival red packets are more complex.

User growth is no longer just about headline numbers—it determines the fuel for model evolution and the future balance of ecosystem power. This urgency helps explain why Tencent and Pony Ma, long seen as relatively restrained, are now calling on users to “relive the joy of grabbing red packets.”

Every major player faces user growth pressure. QuestMobile data shows that by September 2025, Doubao had about 172 million monthly active users, DeepSeek 145 million, and Tencent Yuanbao roughly 33 million. While China’s AI user base is far from saturated, traffic across leading AI apps has seen limited growth over the past six months. Tencent and Alibaba need momentum, ByteDance needs to defend and expand its lead, and all are racing against time.

User growth is also a technical imperative. More users mean more data—effectively free training material. As data becomes an increasingly critical cost factor, AI systems benefit from scale: more usage leads to better outputs, which attract even more users, forming a virtuous cycle of model improvement.

AI also needs to make money.

Today, large language models primarily monetize through three paths: API sales, subscriptions, and advertising.

API sales target enterprise customers, charging by usage volume, such as tokens consumed. Players like Zhipu and Baidu Wenxin already offer such services.

Subscription-based premium features are common on the consumer side, but adoption remains limited. ChatGPT’s paid conversion rate is below 10%, while most domestic AI tools hover between 3% and 6%. To make subscriptions viable, companies must either expand their user base or significantly improve service quality. Spring Festival campaigns offer a rare chance to achieve the former, while improving conversion remains difficult as many users feel “free is good enough, paid adds little.”

Advertising presents another option. ChatGPT has already introduced ads this January. But whether monetized by clicks or impressions, ads require sustained attention. Yet average daily usage across most AI apps is only about ten minutes, highlighting the importance of boosting engagement.

Historically, Spring Festival has also been a key window for activating users.

Big tech firms are leveraging their ecosystems to anchor AI usage after the holiday surge.

Tencent is embedding AI into social scenarios. Its new “Yuanbao Party” feature promotes AI-powered social spaces where users can create groups, connect Tencent Video, QQ Music, and Tencent Meeting, and let AI handle summaries and reminders.

ByteDance is weaving AI into the short-video loop. Doubao integrates with Douyin’s playback and messaging interfaces for real-time search and content creation, while in CapCut, large models power one-click text, video, and voice generation.

Alibaba is betting on AI plus e-commerce and lifestyle services. Qwen now runs across Taobao, Alipay, Ele.me, Fliggy, Amap, Damai, and Taopiaopiao, supporting shopping, food delivery, ticketing, and more. Education use cases also featured prominently in Alibaba’s latest product launch.

Small players have no choice but to refine their edge

For smaller AI companies, the giants’ Spring Festival spending spree is nearly impossible to replicate.

For players like DeepSeek, the realistic strategy is low-cost brand exposure during the holiday, followed by relentless focus on fundamentals: smarter models, more capable agents, and differentiated breakthroughs rooted in specific scenarios.

Coincidentally, DeepSeek and Kimi both updated their models on January 27. DeepSeek strengthened visual understanding, enabling causal reasoning over images that more closely mirrors human visual cognition.

Industry chatter suggests DeepSeek may release its next-generation flagship model, V4, around the Spring Festival—potentially triggering another wave of attention, much like last year.

Kimi’s new model also enhances visual understanding and integrates it with reasoning, coding, and agent capabilities, lowering interaction barriers.

For smaller players, rapid technical iteration is the most direct weapon against pressure from giants. They must move faster and establish clear advantages along specific dimensions of model capability.

Deep specialization is another key survival strategy. Unlike big platforms pursuing ecosystem dominance, smaller companies often win by going deep in vertical scenarios.

With improved visual capabilities, Kimi has entered fitness. Keep’s upcoming AI coach, Kaka, uses Kimi’s new model to recognize and evaluate user movements.

From an ecosystem perspective, smaller players may not be the real losers of the red packet war. The giants are effectively bearing the high cost of AI user education. Their cash subsidies bring millions of first-time users into contact with AI tools, expanding the overall market.

As long as the demand is real, even users initially drawn by subsidies may develop habits and explore other AI products, benefiting the entire industry. Coffee delivery and ride-hailing followed the same path—from “deal hunting” to genuine loyalty.

When enough people experience firsthand how AI improves work and daily life, the industry’s true “iPhone moment” may finally arrive.