Alibaba said on Monday it will allocate 3 billion yuan, equivalent to $431 million, to promote its Qwen AI application during the Lunar New Year period. The company said the initiative, set to begin on February 6, will include incentives tied to dining, drinks, entertainment and leisure, and that it will distribute "large red envelopes" continuously, according to a company statement.
The size of Alibaba's commitment triples the amounts pledged by two domestic rivals. Tencent and Baidu announced late last month that they would spend 1 billion yuan and 500 million yuan respectively on similar promotional efforts for their AI chatbots.
Chinese technology firms have historically targeted the Lunar New Year holiday as a prime window to recruit users, leveraging the surge in travel and family gatherings to promote digital services. The article referenced a prior notable example in 2015, when Tencent used its WeChat messaging platform to hand out digital red envelopes, a move that helped WeChat Pay make inroads against Alipay in the mobile payments market at that time.
The public holiday this year begins on February 15 and will last nine days, longer than during most previous years. Alibaba did not specify whether the rewards in the forthcoming campaign will take the form of cash red envelopes or discount coupons redeemable across its platforms, which include the Taobao e-commerce site.
Tencent's campaign centers on its Yuanbao chatbot app and is scheduled to begin on Sunday. For users to claim digital red envelopes tied to the Yuanbao promotion, they must upgrade to the app's latest version; the envelopes can be withdrawn into WeChat wallets. Tencent has also enabled a feature allowing users to share links that carry cash rewards for others to claim.
Other Chinese AI companies have rolled out upgrades ahead of the holiday as competition intensifies. The report notes that DeepSeek's R1 model launch in January last year unsettled global AI markets and accelerated both adoption and rivalry among domestic players. DeepSeek is also expected to release its next-generation model, V4, with enhanced coding capabilities in mid-February, according to a report by The Information.
Currency conversion cited in the announcement put $1 at 6.9519 yuan.
What this means
- Alibaba's 3 billion yuan commitment represents a significant escalation in promotional spending for AI apps during the Lunar New Year, surpassing rival offers from Tencent and Baidu.
- The campaign uses traditional Lunar New Year incentives - digital red envelopes and consumer discounts - applied to AI chatbot user acquisition across dining, entertainment and leisure categories.
- Ongoing model launches and upgrades from firms such as DeepSeek are contributing to a more competitive domestic AI market.
Context on promotional mechanics
Tencent's approach requires a software upgrade to access red envelope rewards, which are withdrawable to the company's WeChat wallets, and supports social sharing links that distribute cash incentives. Alibaba's specific mechanics - whether direct cash envelopes or platform-specific coupons - were not detailed in its statement.
Summary
Alibaba will spend 3 billion yuan to drive usage of Qwen AI during the Lunar New Year, starting February 6, with incentives across dining, drinks, entertainment and leisure and continuous distribution of large red envelopes. The pledge outstrips rival commitments from Tencent and Baidu and arrives amid intensified competition in China’s AI landscape following recent model rollouts and anticipated upgrades.