The Chinese custom of giving hongbao has become a weapon in the war between tech rivals Alibaba and Tencent with AR hongbao the latest innovation.

The red envelopes filled with money are a traditional gift in celebration of Chinese New Year.

Three years ago, both companies launched virtual hongbao prizes in a bid to attract customers to their online mobile payment platforms.

But, this year, Tencent’s WeChat and Alibaba’s Aliplay have upped the ante with the introduction of AR hongbao, in the style of Pokémon Go.

Players search for the hidden AR red envelopes in their local area which are guarded by virtual characters. They can also hide a hongbao in a GPS-tagged location for friends and family to find. Photo clues can be shared on social media.

In Alipay’s Five Fortunes game, players bag prizes by swiping street-side ‘fortune’ signs which are popular Chinese holiday decorations.

Brands are also getting in on the act with Coca-Cola, KFC and Procter & Gamble giving away cash and vouchers to game users.

Using augmented reality to create a more immersive and interactive experience has clearly paid off this year.

According to an article in the Financial Times, a total of 14bn virtual red envelopes were sent between Tencent’s WeChat users on the lunar new year’s eve on Friday. An increase of more than 75 per cent from the previous year.

In terms of the rivalry between WeChat and Alipay, Alipay’s numbers for 2017 have not been released yet, but last year China Internet Watch reported that total hongbao volume on Chinese New Year eve exceeded one billion on WeChat, compared with 240 million on Alipay and interactions via WeChat Shake reached 11 billion.

WeChat won by blocking Alipay’s hongbao from being shared on its platform, but also by offering more social features which proved popular with users.

Whilst it remains to be seen how Alipay’s AR hongbao performed this year, it’s clear that innovation and social interaction on mobile payment platforms is increasingly popular with Chinese users.

Image: China Internet Watch

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