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Red Envelopes Get AR Update

Pokémon Go the template for catching New Year's digital cash gifts

WeChat upended the digital payments sector in China back in 2014 when it introduced a digital gamification twist to hongbao, the cash gifts traditionally given to friends and family in red envelopes to celebrate the Lunar New Year.

WeChat's game allowed users to give a sum of money to a list of friends on a chat group and then WeChat would distribute it in random amounts to a certain number of people on the list. This gave recipients a good reason to rush to open the digital envelopes—hoping that they would be the one to win the most money, or at least a portion of the money in the pot. You could only play if you had signed up for WeChat's digital payment service.

The effort was a hit that's credited with driving adoption of WeChat Pay. During last year's Lunar New Year's Eve alone, 420 million users sent more than 8 billion red envelopes via WeChat.

Since then, digital payment services have been attempting to outdo one another by offering fresh takes on hongbao every Lunar New Year. Lunar New Year 2017 runs January 28 through February 11. While PokémonGo is banned in China, tech companies have clearly learned a lesson from the game's runaway success in other markets. And they are applying those learnings to this year's hongbao battle, with popular digital payment services integrating augmented reality (AR) and location-based services (LBS) into their offerings.

Alibaba's Alipay is integrating AR into its hongbao campaign in a very similar fashion to Pokémon Go's gameplay. Users monitor their smartphone's screen while walking around to collect virtual red envelopes secreted in various locations by gift-givers. Those giving the money away can send recipients clues regarding the virtual hongbao's location to assist in their discovery.

Brands are also able to give away hongbao through Alipay's AR game—Coca-Cola, Proctor & Gamble and KFC are a few of the companies that have signed up to do so.

Alipay also set aside RMB200 million ($30.1 million) to be given away during the holiday to entice people to fire up its app. Users can get a chance at part of the prize money by using their phones to take pictures of the Chinese character "fu," which means "good fortune," in the wild.

Surprisingly, WeChat will not run a hongbao promotion this year, according to Zhang Xiaolong, the man who oversees WeChat for parent company Tencent. Instead, Tencent this week launched a hongbao promotion on its chat service QQ Messenger that also uses an interface similar to Pokémon Go to distribute digital cash.

—Man-Chung Cheung

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