WeChat Steamrolls, Reinvents Lunar New Year Gift-Giving Tradition

With the Western holidays in the rearview mirror and the Chinese ones just around the corner, this week seems like a good time to examine corporate gift-giving customs around this most important period on the local calendar. The Western lexicon of gifts is quite varied when it comes to holiday giving, ranging from fruit baskets to candy, wine and many others. By comparison, the Chinese version is far simpler and encompassed in a single concept: the money-filled red envelope, or “hongbao.”

But don’t let the simplicity fool you. Red-envelope giving has developed into a high art form over China’s long history, and some serious new wrinkles have taken hold these last few years with the rapid rise of the internet. As one might expect, the amount of money inside the envelope is one of the most important elements. But choosing the right recipients and also when and how to give such packets are also key, and can mean the difference between being labeled a good and caring boss or a cheapskate.

More on that soon.

First, let’s backtrack to the role of red envelopes during the Lunar New Year, and how that has evolved over the last few decades. One of my earliest memories of such envelopes comes from the early 1990s, when I spent the Lunar New Year visiting a friend in his hometown in Guangdong province.

I was in my mid-20s at the time, and ventured out on the first day of the Lunar New Year to discover that everyone wanted to give me such red envelopes. I later learned that people from the older generation generally give the packets to children and young single adults on the belief they will bring good luck to everyone in the new year. Most of the envelopes I got contained relatively small sums, from the equivalent of about $1.50 to as much as $6. I made off just a bit richer that day, netting an unexpected windfall of $20 to $30, enough to pay for a few extra coffees.

Many of the themes I experienced then hold true in the red-envelope-giving culture of today, though polling of my contacts yielded a surprising variation of customs with a few common themes. One of the biggest common themes is that managers typically give such envelopes to employees, mimicking the older-to-younger-generation practice I experienced on that early trip to Guangdong. Another big theme is that amounts are generally small and symbolic, meant for a boss or manager to show appreciation to employees for their work during the year. From a purely practical standpoint for any managers reading this, everyone I talked to said they fund their red envelopes out of their own pockets and either aren’t allowed or don’t think about trying to expense them.

Even those themes don’t always hold true, as I discovered from a couple of contacts who said they dole out significant sums each year. One estimated he gives out around 45,000 yuan ($6,910) to employees each year. But he also noted he uses such gift-giving throughout the year to reward people for their good work and boost morale.

How Much to Give

As for how much to give, that also varied quite a bit. At one extreme is the one-size-fits-all approach, which saw one of my contacts say the proper etiquette is for managers to simply carry around a big bundle of such envelopes that all have the same amount of money, around 50 yuan. Such managers can then offer an envelope to any employee they happen to encounter, with no real implications of an individual’s performance.

At the other extreme was one contact who said he gives out red envelopes on a tiered system, ranging from the equivalent of a few U.S. dollars to as much as hundreds of dollars for people like his personal assistant. Some people also said they try to give money in amounts that include the lucky numbers six or eight, the former equating to “smooth sailing” in the New Year and the latter to “getting rich.”

As to when to give, opinions also varied widely. Everyone concurred that Lunar New Year’s Eve was the earliest date to start giving. The latest was the 15th day of the Lunar New Year, known as the Lantern Festival, marking the end of the holiday period.

One of the most interesting wrinkles in this holiday gift-giving was the rapid rise of the wildly popular WeChat instant messaging app, which has muscled in on an age-old tradition with remarkable speed. The app itself is quite well-positioned for such business, since nearly everyone old enough to own a phone and below retirement age uses the service, which also has money-transferring functionality. Still, I have to commend the app and its developer, Tencent, for commandeering this age-old tradition in just the space of three or four years.

Most people I talked to said they still give out physical red envelopes or a combination of virtual and real-world packets, though all of those were 40 or older. The one younger person I asked, my human resources manager at Caixin, said anyone from the younger generation usually does their red-envelope-giving exclusively on WeChat. The app is handy because it not only allows for giving to individuals, but also to work- and interest-related groups that have exploded on the service over the last few years.

A manager can choose how much money to put into the group and divide it into a specified number of virtual packets. Members of the group then duke it out virtually to see who can “grab” the cash first. Many have commented how the amount in the packets is less important, and instead people simply enjoy the fun that comes when all their friends are suddenly “grabbing” for money over such virtual networks. That pretty much sums up the broader Lunar New Year red-envelope spirit, which says such gift-giving is much more about spreading merriment and showing appreciation than anything else.

Doug Young has lived in Greater China for two decades, including a 10-year stint at Reuters, where he led China corporate news coverage. Send your questions or comments to DougYoung@caixin.com.