Digital Red Packets: WeChat’s Successful Foray into Mobile Payment

Executive Summary

• Sending and giving red packets, or red envelopes, containing cash is a long-held Chinese tradition at Lunar New Year. Leveraging on this, WeChat, China’s most-used messaging app, introduced a function to send digital red packets back in 2014.
• Since then, WeChat’s digital red packets have become a huge success: 768 million WeChat users chose to send digital red packets to friends and families this year, and a recent survey found that about 80% of mainland Chinese said they intended to send red packets via WeChat Pay this year.
• Leveraging its success in digital red packets, WeChat has expanded its mobile payment functions to cover online and offline services, marking its successful foray into the mobile payment market with 39% market share.
• On the back of the popularity of its digital red packets,WeChat’s wide user base of over 1 billion monthly active users (MAU), as of February 2018, and strong user engagement, give it a competitive edge in the mobile payment market in China.