TLDR
- Alibaba will spend $431 million (3 billion yuan) to promote its Qwen AI chatbot during the Lunar New Year holiday starting February 6.
- The spending triples what rivals Tencent and Baidu pledged, with Tencent committing $143 million and Baidu $71 million for their own AI chatbot campaigns.
- This year’s Lunar New Year holiday runs nine days starting February 15, longer than most previous years.
- The promotion follows DeepSeek’s R1 model launch last January, which intensified competition among Chinese AI companies.
- Alibaba will distribute rewards for dining, drinks, entertainment and leisure through digital red envelopes, though the company hasn’t confirmed if these will be cash or discount coupons.
Alibaba announced Monday it will spend 3 billion yuan, or $431 million, to attract users to its Qwen AI app during the Lunar New Year holiday. The campaign starts February 6.
Alibaba Group Holding Limited, BABA
The spending dwarfs recent commitments from competitors. Tencent pledged 1 billion yuan last month for its Yuanbao chatbot. Baidu committed 500 million yuan for similar promotions.
The move shows how seriously Chinese tech companies are taking the AI chatbot race. This year’s holiday offers a longer window for user acquisition.
The Lunar New Year public holiday begins February 15 and runs nine days. That’s longer than most previous years. Companies are using the extra time to run bigger campaigns.
Alibaba’s promotion will offer rewards tied to dining, drinks, entertainment and leisure. The company said it will distribute “large red envelopes” throughout the period. Digital red envelopes are a popular way to transfer money in China.
The company hasn’t specified whether these will be cash payments or discount coupons. If they’re coupons, users would likely redeem them on Alibaba platforms like Taobao.
The Red Envelope Playbook
Chinese tech firms have a history of using Lunar New Year as a marketing battlefield. The goal is always to grab new users while people are traveling and spending time with family.
Tencent pulled off the most famous campaign in 2015. It used WeChat to distribute digital red envelopes. The strategy helped WeChat Pay gain ground against Alipay, which dominated mobile payments at the time.
Tencent’s current campaign focuses on its Yuanbao app. Users must upgrade to the latest version to claim red envelopes. They can withdraw the money to their WeChat wallets. The campaign starts Sunday.
Users can also share links with cash rewards for others to claim. That helps the app spread through social networks.
Competition Accelerates After DeepSeek
The AI sector in China has moved faster since DeepSeek launched its R1 model in January last year. That release shook up global AI markets. It pushed Chinese companies to speed up their own launches.
Several AI firms are releasing upgrades before the holiday. DeepSeek itself is expected to launch its next-generation model, V4, in mid-February. Reports say it will have strong coding capabilities.
The timing isn’t random. Companies want their newest features available when user attention peaks during the holiday.
Alibaba’s massive spending shows the stakes involved. The company is betting that a strong showing during Lunar New Year can help Qwen gain market share. With the holiday lasting nine days this year, there’s more time to convert casual users into regular ones.
Tencent’s campaign requires an app update to participate. Baidu is spending less but still competing for the same pool of users.
DeepSeek plans to launch its V4 model with enhanced coding features around mid-February according to reports.
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