Chinese New Year Reaches Mobile Tipping PointFebruary 2016

Summary

The Chinese New Year festival is an ancient one where long-practiced traditions and customs are still seen today. However, even

ages-old traditions are not immune to the influence of technology. In recent years, it’s become clear that many elements of the

Chinese New Year experience are being radically transformed by mobile apps. It was not too long ago when Chinese New Year’s Eve

meant getting the family together by the dinner table to watch television. Now you are more likely to catch your parents staring at

their smartphones.

Using App Annie’s Store Stats, we showcase how Chinese New Year has become a significant opportunity for mobile app publishers,

and how a few of the most impactful developments in the app economy have fundamentally changed this holiday in critical areas

such as transportation and payment.

The Battle for a Ticket Home

The Chinese New Year period sees roughly 400 million people hitting the road. Thankfully,

the emergence of mobile apps has made planned and on-demand transportation more

convenient than ever.

Spike on December 1, 2015

Spike on December 1, 2015

China’s Ministry of Transportation predicted that an average traveler would make a 410-kilometer, or 255-mile journey to get home this year. The railway system, which was expected to transport 332 million people during the holiday in 2016, remained the top choice for most travelers.

铁路 12306 (Tielu 12306), the train ticket purchasing app developed by China Railway Corporation, released the first batch of Chinese New Year tickets 60 days in advance. According to Store Stats, this resulted in a noticeable spike in iOS download rankings for a few travel apps (including 铁路 12306 and 铁友, all pictured below) at the beginning of December 2015, corresponding to the start of ticket sales.

The World’s Largest Human Migration is Now Being Aided by Mobile

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With transportation demand vastly outstripping supply, app developers in China came

up with mobile solutions to help travelers improve their odds of booking a ride home. A

few apps featured a “grab a seat (抢票)” function in various forms, which allowed for

automatic train ticket purchases.

For instance, 铁友 (Tieyou), the popular app specializing in train tickets owned by Ctrip,

offers a function (云抢票, or “grab a ticket in the cloud”) that instructed its own servers

to consistently make ticket purchase requests on behalf of its users, thereby greatly

increasing the user’s chance of obtaining a ticket. With other apps also incorporating

this feature, travelers can now rest easy instead of stressing about getting that priceless

ticket home.

It is also worth noting that even if the app fails to find a ticket, a refund is automatically

granted. These types of advancements in transportation app features greatly improve

the user experience and benefit the public. As a result, transportation apps will continue

to attract increasing numbers of travelers to adopt them for periods of heavy

congestion such as Chinese New Year.

Mobile Users Gain an Edge

WeChat and Alipay Go Head to Head in the Battle for Users

To understand how modern Chinese consumers are incorporating apps into their family holidays, look no further than WeChat’s highly successful

red packet scheme. Only this year, Alipay doubles down on its quest to go social.

420 Million People Sent Out and Received 8.08 Billion WeChat Red Packets

The tradition of handing out “red packets,” or envelopes of cash to family and friends, has

successfully migrated to mobile as well. WeChat took full advantage of its WeChat Pay

feature by allowing users to deliver “red packets” to either one or a group of friends. Users

could even set up how many friends get to share one packet, with each friend being

assigned a random share of the total amount of money. Now that each packet has become

a test of both speed and luck, it is no wonder that smartphones grabbed all the attention

during Chinese New Year.

According to estimates, 420 million people sent out and received 8.08 billion WeChat Red

Packets in total on Chinese New Year’s Eve alone — a more than eight-fold increase from

last year —  speaking volumes of WeChat’s domination in China. Its “red packet” feature

was a great promotional opportunity for WeChat Pay against its major competitor Alipay.

Alipay, a competitor of WeChat Pay in mobile payment, is also in the business of red

packets. However, Alibaba, the industry giant behind Alipay, decided to up the ante this

year by partnering up with the CCTV New Year’s Gala, which is widely considered the

most important live television program in China. According to official figures, the Gala

was watched by more than 1.03 billion people in 2016.

Once per hour during the five-hour gala, the audience was reminded by the hosts to try

their luck at collecting five different “fortune cards” using Alipay. Each person who

secures a complete collection of five cards is allowed to share a total cash award of RMB

215 million (USD $33 million) with more than 791,000 people.

The campaign was designed to encourage people to trade different cards with friends

using Alipay’s social features. It demonstrated Alipay’s ambition to dig deeper into the

social connections behind each individual user, which could one day help the app expand

into a full-fledged social platform.

Alipay Goes After WeChat in Its Quest to Go Social

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Alipay topped the iOS download ranking in China until the day after Chinese New Year

Alipay’s massive on-air campaign helped the app to stay

in the top three in iOS downloads in China until days

after Chinese New Year. The app was able to establish

itself during the holiday, proving that it could compete

strongly with WeChat’s red packets scheme.

As competition in China’s mobile payment industry

intensifies, it will be interesting to see whether Alipay’s

users will pick up its much-advertised social features in

the months to come.

Alipay Looks to Expand From Mobile Payment

Conclusion

People have adopted mobile apps in almost every element of Chinese New Year, from the way they get around, to how they communicate with

each other. The holiday has also became a prominent battleground for high-profile app publishers such as Tencent and Alibaba.

WeChat again proved itself as a platform one simply cannot ignore, while Alipay is not satisfied with only dominating the mobile payment industry.

Both parties are zooming in on each other’s core functions, with Tencent highlighting WeChat Pay and Alibaba offering Alipay users incentives to

engage with more friends on its platform.

As China is on track to overtake the United States in mobile app revenue in 2016, it’s more important than ever for app publishers to understand

what Chinese New Year means for their business.

Notes● Historical iOS daily ranking data for 铁路 12306, 铁友, and Alipay in China are retrieved through App Annie’s app tracker solution, Store Stats.● Certain trademarks and/or images used in this report may belong to third parties and are the property of their respective owners. App Annie claims no rights to such

trademarks or images.

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