Alipay’s 500 Million Digital Hongbao Shows Big Ambition in Blockchain
The Lunar New Year is the most celebrated event in China, in the meantime Chinese people welcome health ,wealth and good relationship to come in the new year. Giving “Hongbao”, the red packet with cash money, is also a tradition to send best wishes to each other. Chinese internet giants also see the business opportunity from it.
Alipay, a third-party mobile and online payment platform, developed and owned by Alibaba Group through its Ant Financial division, has given 500 million yuan ($788 million USD) in Hongbao to build up brand awareness and increase the number of users. However, the “Hongbao war” is just a surface appearances, insiders point out that it is also a part of their business strategy specially in blockchain technology application.
Before the Hongbao lottery time near 22:18 p.m. on 15th of February , Ant Financial officially announced on Weibo that, there were more than 250 million users has collected all five “Fu” to join in the partition of the 500 million RMB digital cash Hongbao activity compared to last year, only 168 million users participated in.
The purpose of the Hongbao war is a scramble for users in the mobile payment market. Chinese New Year Hongbao becomes an important use case for mobile payment that no one in this industry wants to be lagged behind, mobile payment enterprises want to attract as many users as possible to provide a better condition for future development.
Insiders pointed out that Ant Financial’s business logic behind “Fu” collection is to collect user data and benefit their financial business application.
The process of “Fu” collection and sending “Fu” to kith and kin is also a social process. There is great commercial value hiding behind people’s living circles, social plus e-commerce is a killer model. Ant Financial’s digital Hongbao partition activities aims to further solidify their user community, as well as creating a suitable financial ecosystem for landing their blockchain projects.
In July 2016, Ant Financial began to apply blockchain technology in their Alipay charity donation platform. At present, there are 37 institutions, 304 projects involved in the this blockchain platform. There are 747,000, donation transfer transactions go through this platform with the total amount of more than 349,000,000 RMB.
Recently, Alibaba Group signed a an strategic cooperation agreement with Xiong’an New Area, to build a smart city based on blockchain. The internet giant has put lots of effort in blockchain technology.
Jiang Guofei, vice president of Ant Financial, said that like the mobile payment, the blockchain is also slowly changing people’s lives. He predicts that some blockchain applications may land to actual financial services and supply chain management use cases in 2018 though majority of blockchain projects are in the proof of concept phase (PoC); a third-generation blockchain technology architecture will arise and the zero-knowledge proof will improve the security and privacy model of the blockchain system. Cross-chain value transfer and data exchange will become the core of the blockchain technology in the future.