Alibaba has announced plans to spend 3 billion yuan, around 431 million US dollars, to attract users to its Qwen AI app during the upcoming Lunar New Year holiday, intensifying competition among China’s biggest technology companies. The campaign is set to begin on February 6 and will include incentives related to dining, beverages, entertainment, and leisure activities, along with continuous distribution of large digital red envelopes, according to the company.
The investment is significantly higher than similar initiatives announced by rivals. Tencent and Baidu revealed late last month that they would spend 1 billion yuan and 500 million yuan respectively to promote their own AI chatbot services during the same festive period. The Lunar New Year has long been a prime marketing season for Chinese tech firms, as hundreds of millions of people travel home and spend extended time with family, making it an ideal opportunity to acquire new users.
One of the most notable examples of New Year marketing occurred in 2015, when Tencent used digital red envelopes on WeChat to rapidly grow its WeChat Pay service, challenging Alipay’s dominance in China’s mobile payments market. This year’s public holiday will begin on February 15 and last for nine days, longer than most previous Lunar New Year breaks, further increasing its appeal for large-scale promotional campaigns.
Competition in China’s artificial intelligence sector has accelerated following the launch of DeepSeek’s R1 model in January last year, which unsettled global AI markets and intensified rivalry among domestic players. Tencent’s promotion will focus on its Yuanbao chatbot app and is scheduled to start on Sunday. Users will need to update the app to the latest version to receive digital red envelopes, which can be withdrawn to their WeChat wallets, and they can also earn cash rewards by sharing invitation links.
Alibaba has not clarified whether its incentives will be distributed as cash red envelopes or as discount coupons usable across its platforms, including its flagship e-commerce site Taobao. Meanwhile, several other Chinese AI companies are rolling out upgrades ahead of the holiday season. DeepSeek is reportedly preparing to launch its next-generation V4 model in mid-February, which is expected to feature advanced coding capabilities.
