Alibaba Group (BABA) said on Monday it will spend 3 billion yuan ($431 million) to promote its Qwen AI app during the Lunar New Year holiday, as competition in China’s chatbot market intensifies.
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The campaign will begin on February 6 and will offer rewards linked to dining, drinks, entertainment, and leisure. Alibaba said users will receive “large red envelopes” throughout the holiday period, a popular digital giveaway format in China.
Alibaba’s spending plan is larger than those announced by rivals. Tencent (TCEHY) said last month it would spend 1 billion yuan to promote its Yuanbao chatbot, while Baidu (BIDU) committed 500 million yuan for similar AI promotions. Alibaba’s pledge is more than double Tencent’s and well above Baidu’s.
Why the Holiday Matters
Chinese tech companies have long treated the Lunar New Year as a key marketing window to attract users. During the holiday, hundreds of millions of people travel home and spend more time on their phones, making it a great opportunity for app promotions.
One well-known example dates back to 2015, when Tencent used digital red envelopes on WeChat to push WeChat Pay, helping it challenge Alipay’s lead in mobile payments. Since then, holiday giveaways have become a common tool to drive user growth.
This year’s Lunar New Year holiday begins on February 15 and lasts nine days, longer than in many past years, giving companies more time to run promotions and build usage.
AI Rivalry Picks Up Speed
The latest push comes as competition in China’s AI market heats up. Rival firms are racing to grow their chatbot user bases and roll out new features. The launch of DeepSeek’s R1 model last year raised pressure across the sector and sped up product launches.
Tencent’s campaign requires users to update its app to receive digital red envelopes, which can be withdrawn to WeChat wallets. Alibaba has not said whether its rewards will be cash payments or discount coupons that can be used on platforms such as Taobao.
Several AI firms are also expected to release upgrades around the holiday period. DeepSeek is reported to be preparing its next AI model, V4, later this month.
Is BABA Stock a Buy, Hold, or Sell?
On TipRanks, BABA stock has a Strong Buy consensus rating based on 14 unanimous Buys. The average Alibaba price target of $203.09 implies 18.51% upside potential from current levels. BABA stock has surged nearly 90% over the past year.
