Known as red envelop or red packet in most of non-Chinese countries, a Hongbao is a small rectangular-shaped envelop made of cardboard, mostly red in color, with different designs and wordings wishing prosperity and good fortune to the recipient.
Usually given out by hand, today is by far the most used method to give away money as a present for birthdays, weddings and festivities, especially during Chinese New Year.
As often happens in China, this ancient tradition has long been embraced by the digital world.
Tech companies are famous to give out red envelops during the year in order to entice as many consumers as possible into using their financial services.
A good example is the never-ending clash between WeChat, the fist social app in China, and Alipay, the financial arm of Alibaba Group.
As two of the most used mobile pay platforms in China, these companies have been competing on this field for quite some time, allocating free money for users. For example, during the 2019 Spring Festival, around 823 million people sent or received WeChat red packets in China, according to Statista.
Given the reach of these platforms, and the love of Chinese consumers for these small gifts, many brands have started to include them in their marketing strategies.
Since January 2019, for example, brands have been using digital red packet covers as a new form of advertising space, creating their own customized designs. Just to mention some, Burberry and Gucci used this strategy to increase their fanbase and help selling out products specifically tied with their personalized covers. Others, such as Galleries Lafayette, used them for brand awareness purposes, with terrific results in terms of exposure (Glossy).
Using red packets on WeChat is fairly easy, but brands will need to open a WeChat Official Account first, and then to apply for WeChat Pay, in order to enable cross-border payments.
Brands can use red envelops in a variety of ways: a simple and efficient strategy is to ask users to follow the account in exchange for one of these digital little packets.
Firms can send out anything within a hongbao, from lottery discounts to coupons, or even the access to limited edition products. Money, of course, is still an option, but in this case brands should better follow a few rules of thumb:
- Always try to include the eight in the amount
You can give as little as 8.88 yuan (about 1 Euro), as long as it has the eight in it, it will be perceived as good luck from your Chinese audience. - Avoid four and odd numbers
Receiving a hongbao containing such numbers is considered a bad omen and could be perceived as lack of culture sensitivity by your customers. - Keep in mind that each festivity has a special synergy with specific numbers
For example, during Valentine’s Day usually exchange red packets with the the sum 520 in it, because its pronunciation sounds similar to “I love you” in Chinese.
Red envelops also have really good synergies with offline shops, to drive traffic instore through brand’s communication channels or by including red packets inside the store as QR codes to scan.
Lastly, red envelops seem to be doing really good when paired with gamification, with Alibaba driving the trend for this Chinese New Year.
No matter how they are used, red envelops are here to stay without any doubts. Being culture-perceptive is the key for success in modern China, that’s why campaigns including these little gifts are so effective and definitely a great asset for brands, along with more traditional marketing tools.
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