Alibaba Group has announced plans to spend 3 billion yuan ($431 million) to attract users to its Qwen artificial intelligence app during the Lunar New Year holiday, escalating competition among China’s biggest technology firms for dominance in the fast-growing AI sector.
The initiative, which is set to begin on 6 February, will focus on user incentives across dining, drinks, entertainment and leisure. In a statement on Monday, Alibaba said the campaign would feature “large red envelopes distributed continuously” throughout the festive period.
The scale of Alibaba’s pledge significantly outstrips those of its main rivals. Late last month, Tencent and Baidu announced they would spend 1 billion yuan and 500 million yuan respectively on similar promotional campaigns to drive adoption of their AI chatbot products.
Chinese technology companies have long treated the Lunar New Year period as a critical marketing battleground, capitalising on the festive season when hundreds of millions of people travel home and spend extended time with family. Promotions tied to digital “red envelopes”, a traditional form of gift-giving during the holiday, have proved particularly effective in acquiring new users.
One of the most notable examples dates back to 2015, when Tencent used its WeChat messaging app to distribute digital red envelopes. The move played a key role in helping WeChat Pay gain traction against Alipay, which at the time dominated China’s mobile payments market.
This year’s public holiday period begins on 15 February and will last nine days, making it longer than in most previous years and providing companies with an extended window to roll out promotions.
Competition in China’s AI industry has intensified sharply since the launch of DeepSeek’s R1 model in January last year, which unsettled global AI markets and accelerated both adoption and rivalry among domestic players.
Tencent’s campaign will centre on its Yuanbao chatbot app and is scheduled to start on Sunday. Under the promotion, users are required to upgrade to the latest version of the app to claim digital red envelopes, which can be withdrawn to their WeChat wallets. Tencent also said users would be able to share links that offer cash rewards for others to claim.
Alibaba, however, did not specify whether rewards under its Qwen AI campaign would be distributed as cash red envelopes or as discount coupons redeemable across its platforms, including its flagship e-commerce site, Taobao.
Beyond the major players, several other Chinese AI firms have been rolling out upgrades ahead of the holiday. DeepSeek is expected to launch its next-generation AI model, V4, in mid-February. According to a report by The Information, the new model is expected to feature strong coding capabilities.
Boluwatife Enome
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