Electronic Red Envelopes in China: How can companies develop marketing with Electronic Red Envelopes through Sina Weibo as example case

Written by: Gu Wanqing

‘Electronic-Red Envelope’ explosion

There is a new phenomenon in China nowadays: Delivering Electronic-Red Envelope (E-Red Envelope) during festival days. The E-Red Envelope has already been popular for three years, and according to ‘China Internet Red Envelopes big data report’ released by think-tank of Tencent in 2016, almost all the "Get an E-Red Envelope" data published has reached a new peak of the history after the just past New Year holiday. On the day of the New Year's Eve, there were over 0.4 billion internet users participated in the ’Get a Red Envelope’ activity and the total amount of the Red Envelopes sent and received were over 10 billion. (He, 2016)

Delivering Red Envelope is a Chinese tradition. It is acknowledged that the Red Envelope culture can date back to Tang Dynasty. Red Envelope means wrapping money in red paper given to kids from their parents, grandparents and others as New Year blessing because the red color is regard as the symbol of energy, happiness and good luck in China. And the money in it is called Yasui Qian which means 'suppressing ghosts money' which came from an ancient myth (Wu, n.d.). However, as the rapid development of Internet and mobile technology, a new form of Red Envelope has also been exploited as well. They can be delivered through Internet apps such as Weibo and Wechat. This makes the delivering process much easier, safer and more convenient which has become a popular way of improving relationships among friends, colleagues and siblings as well. There is also a saying that it is impolite to open a Red Envelope in front of the person who gives it you, thus the E-Red Envelope becomes a better option. 

And for enterprises or companies, they also provide and deliver Red Envelopes for customers through their official Sina Weibo account. They offer a certain value of money in E-Red Envelopes and people just need to go to the link as quickly as possible and click the button to open them (see Figure 1). As a matter of fact, the amount of money varies in each envelop, some of them are very small amount of money like 0.5 Yuan, and some of them are 5-20 Yuan discount coupons or vouchers (iimedia, 2016). However, no one will refuse the chance to win some extra money especially in the festival atmosphere. Additionally, the number of the Red Envelopes are limited which means not everyone has the luck to get them. That’s also the reason why people would love to take part in the activity. Everyone wishes to gain some luck in the beginning of a new year. And. Moreover, people are also able to share the E-Red Envelope post to their friends hence there will be even more people joining because of the fast information spreading on the internet.

Figure 1. E-Red Envelope of Tmall bran

Figure 1. E-Red Envelope of Tmall bran

  

The Red Envelope is no longer popular only among relatives or friends physically, but companies and the internet have taken part in as well. Thus, how do companies develop their marketing strategies by delivering Electronic Red Envelopes on Sina Weibo? I would like to briefly talk about E-Red Envelope phenomenon in Sina Weibo firstly through a honeycomb framework to analyze its functionality, and adaptation of marketing strategy due to the rise of social media and importance of customer engagement in ‘Red Envelope’ marketing.

  

What’s Sina Weibo?

Social media including video sharing sites, wikis, photo sharing sites, social network sites, microblogs and so on has already become a part of daily lives of Internet users all over the world. It is a new dynamic era of digital engagement that social media plays an essential role in this context. Social media applications have been increasingly used for companies to collect both positive and negative feedback and information about their products and/or services and to engage with their target consumers. Sina Weibo, Alipay, Baidu and Tencent (including QQ and Wechat) are the main social media platforms which have the most business companies involved. Sina Weibo is selected as the target case to be discussed here. Sina Weibo is a social networking site that provides the micro-blogging service classes launched by Sina Website. In order to understand the functionality of Sina Weibo as a social media, a framework can be applied which is a honeycomb of seven functional building blocks: identity, conversations, sharing, presence, relationships, reputation, and groups. Each block represents specific level of social media’s function so that examine a certain aspect of social media user experience, and its implications for companies (Kietzmann, 2011).

Figure 2. Honeycomb framework of Sina Weibo

Figure 2. Honeycomb framework of Sina Weibo

According to this view, it can be found that Sina Weibo accounts would primarily act to represent a public persona with declaration of their social status and standing. The reputation block in the honeycomb model not only refers to a person’s reliability but also their content, which is usually evaluated by content voting systems. Secondly, users can choose to disclose their personal information such as name, age, gender, profession, location, and express their opinions and share posts they are interested to portray their identities in certain ways. It has also been developed some identity strategies like express real identity or virtual identities alternatively, while others focus on self-promotion or self-branding through presenting a more trustworthy reputation towards public and proper self-expression. Additionally, Sina Weibo utilizes the hashtag (“#”) functionality to create the possibility of mass mobilization and instant news dissemination. This can be characterized by sharing. Lastly, Sina Weibo has the “@” function making users reply and engage in dialogues efficiently, which refers to conversation functional block there. Sina Weibo is quite similar to Facebook to some extent that both of them focus on social grooming like conversations, identity, relationships.

 

Change the old marketing thinking!

The speedy economy growth in China has demanded new market strategies to cater the growing needs in the market. With increasing pressure for sustainable development, companies need to explore updated approaches to increase rigor and relevance and improve the outcomes in marketing. Companies should notice the division between themselves and consumers which leads to the insufficiency of marketing effectiveness, and the changing of their conventional thoughts that consumer is a passive recipient of marketing messages (Wind, 2008). It is crucial to rethink marketer’s mental models to embrace the evolving market where there are empowered consumers and understand their behavior with new thinking, designing effective marketing strategies for them (Wind, 2008). This Red Envelope phenomenon illustrates that the business enterprises have caught the change of market and started to take measures to cope with it. Sina Weibo adapts their brand along with the market change. Many business companies take advantage of this social network platform to enhance their marketing influence among target audience. People who get coupons will become potential consumers of the company sponsored the Red Envelope. 

Because of the great growth the social media brings, it has impacted business processes and models in ways that marketing also needs to transform the conventional thinking model from bowling to pinball. It demonstrates crucial implications of this required conversion including the evolution of consumer power, the co-creation of brand stories, the invention of social commerce, the new social-CRM, and the necessary organizational adaptations in a pinball world (Bloching, 2013). There are two main trends in consumer behavior changing in result of the rise of social media: Increased active engagement and increasingly networked interconnectedness (Bloching, 2013). It is worthy to notice that an essential trait of social media is its informality and personal nature, because people share their likes and preferences with their friends through networks if they don’t dislike the brands. Therefore, when Sina Weibo users share the post to their friends, their participation becomes the part of the marketing strategy. The companies not only distribute Red Envelopes on their official Sina Weibo accounts, but also sponsor Red Envelopes from celebrities because of the enormous influence among their followers.

 

Let more people join!

Many companies also choose to create their official account on Sina Weibo. It is essential to have brand communities for a variety of value creating activities (Muniz, 2011). The companies’ Sina Weibo account can be considered as a place where the followers can congregate together to commune and interact. After users get money from the E-Red Envelope, the system will kindly and automatically ask “Do you want to share this happy moment to your friends”. If users choose to share, then it will generate a post systematically full of blessing words of the New Year as well as the brand name and brand hashtag (see Figure 3). However, if they don’t like the blessing words from system, it is able to delete or edit so that they could write their feelings in their own words. Using simple prompts regarding appropriate language encourages users participation (Muniz, 2011). People want to share the ‘good news’ and inspire others to join the flock. The behavior of sharing the ‘Get an E-Red Envelope’ post also means a special value added advertisement for the brand created by user unconsciously.

Figure 3. Shared post of ‘Get a E-Red Envelope’ with hashtag of brand name

Figure 3. Shared post of ‘Get a E-Red Envelope’ with hashtag of brand name

The strength of consumer power is the size of their personal network and social connections (Hofacker, 2013). Companies could utilize the network-based power they help spreading information. It substantially increases the ability to share and influence public, empowering consumers to disseminate content no matter it is self-created or not. When the sharing behavior happened, the game of ‘Get an E-Red Envelope’ will reach more audience and the brand who distributes the money will be known.  

This Red Envelope activity can be characterized as gamification. The companies attempt to investigate tools and techniques to motivate consumers to involve. Gamification is one of those tools which help to engage target audience and meet marketing needs (Virvilaite, 2015). Companies apply gamification as a marketing strategy because it initiates the consumer involvement, which could help to improve the perceived value of the brand (Virvilaite, 2015). Just like the game of “Get an E-Red Envelope”, the aim of this activity is to facilitate consumer motivation and engagement through creating gameful experiences under this special cultural context.

 

E-Red Envelope changes the Spring Festival

In fact, after nearly two years of "E-Red Envelope" explosion, the "Red Envelopes" tradition has become a new approach of connection between companies and consumers. Because of the interpersonal communication and amplifier function of mobile Internet, companies are able to quickly condense user groups with E-Red Envelopes no matter in first or fourth tier cities. Meanwhile, a large number of Red Envelopes distributed in the form of coupons, vouchers have become the entries of a wide variety of local services within supermarket, catering, entertainment and other consumption activities. It also gradually changes people's consumption orientation. (2345 Softwear News, 2016)

->>For business companies, they break out of conventional marketing model to adapt the strategies to the trend.

->>Sina Weibo is a great social network platform that allows companies to utilize its large customer base.

->>The ‘Get a E-Red Envelopes’ game plays a role in attracting scarce attention in the Spring Festival period, increasing the flow and exposure which focus on both scenarios and interaction, making more people participate in and enjoying this amusing experience.  

This kind of socialized and interacted way of marketing is more attractive than traditional ones. Companies are able to build connections with customers all over the country through online Red Envelopes and with the interpersonal communication effect of Internet. This interesting Red Envelope game not only caters the festive atmosphere but also has a significant spreading effect.

 Though this article researched the hot E-Red Envelope phenomenon in China, some limitations must be declared. This phenomenon was analyzed in a simplified way by setting the most popular platform Sina Weibo as an example which is not able to cover the whole big picture of all other platforms. Further research is required when defining whether it is a transient phenomenon or not, and it will be replaced by other novel marketing strategies or not.

 

 

 

References

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Fuzhou News. (2016) He, Bin Guo & Jin. Available Online: http://news.fznews.com.cn/fuzhou/20160216/56c27a6e763da.shtml [Accessed  February 17, 2016].

Labrecque, L.I., Esche, J., Mathwick, C., Novak, T.P. & Hofacker, C.F. (2013) “Consumer Power: Evolution in the Digital Age”, Journal of Interactive   Marketing, 27, 257-269.

Kietzmann, J.H., K. Hermkens, I.P. (2011) "Social media? Get serious! Understanding thefunctional building blocks of social media." Business Horizons, 54, 241—251.

Muniz, A.M. and Schau, H.J. (2011) "How to inspire value-laden collaborative consumer-generated content." Business Horizons, 54, 209-217.

Virvilaite, Zaneta Piligrimiene & Aiste Dovaliene & Regina. (2015)  "Consumer Engagement in Value Co-Creation: whatKind of Value it Creates for Company?"  Engineering Economics, 452-460.

Wind, Yoram. (2008) "A Plan to Invent the Marketing We Need Today." MIT Sloan Management Review, 20-29.

China Highlights. Wu, Annie.( n.d.)  Chinese Red Envelopes/Packets (Hongbao) - Amount, Symbols and How to Give.  Available Online: http://www.chinahighlights.com/travelguide/festivals/red-envelop.htm.[Accessed  February 15, 2016].

"The Report of Internet Users Involvement of E-Red Envelope in 2016." iimedia. 2016. http://www.iimedia.cn/40820.html [Accessed February 17, 2016]