Alibaba’s $431M CNY giveaway crashes in 9 hours

What happened Ahead of Chinese New Year on February 17, has committed roughly 3 billion RMB ($431 million) to promote its Qwen AI app during the peak festive spending season. The tech giant plans holiday incentives spanning dining, entertainment, and leisure — escalating the annual celebration into a critical battleground in China’s intensifying AI competition. The campaign launched February 6, significantly raising the stakes against rival efforts from Tencent and Baidu, which have deployed smaller Lunar New Year promotions for their AI chatbots. Alibaba’s offer centers on continuously distributed, red-envelope-style rewards — a tactic Chinese tech firms have long deployed to drive rapid adoption during the country's most travel- and consumption-heavy period. Early demand proved intense. Alibaba reported more than 10 million orders within the first nine hours, though the surge quickly strained systems. Over the weekend, Qwen temporarily halted coupon distribution due to technical overload, with the company posting a message on its official Weibo account requesting user patience. By February 9, users attempting repeat purchases received refusal notices citing excessive demand. The initiative reflects a broader effort to integrate Qwen with Alibaba’s app ecosystem and enable direct, in-chat payments — mirroring functionality already offered by competing platforms. Lunar New Year has historically served as a launchpad for platform growth in China. In 2014, Tencent famously digitized the red envelope tradition within WeChat, accelerating the adoption of in-app payments and helping the messaging app evolve into a major payments and commerce hub, with over 100 million users linking bank accounts by year-end. This year’s extended nine-day holiday arrives amid a wave of new AI model releases, intensifying competition and raising the cost and scale of winning consumer attention. The Jing Take Alibaba’s decision to deploy a 3 billion RMB ($431 million) Chinese New Year giveaway is all about mastering China’s uniquely competitive consumer battlefield. In a market with hyper-efficient logistics, seamless payments and near-total platform transparency, price and heavy markdowns continue to be the primary lever of attention. Discounts, cashback and prize-style incentives aren’t promotional tactics on the margins — they are core growth mechanics designed to drive habit formation at massive scale. Crucially, Alibaba is doing this from a position of renewed confidence. Its cloud business is accelerating sharply on AI demand, and the company is emerging from a multi-year reset with improving financial momentum. That allows it to spend this boldly while competitors tread more cautiously. In fact, this pledge reportedly triples the spending promised earlier by rivals Tencent and Baidu. However, the move of halting coupon distribution for its Qwen chatbot highlights the growing downside of China’s heavy reliance on subsidy-led growth. The promotion, part of a multi-billion-yuan effort to turn Qwen into an AI-powered shopping gateway, triggered a surge of demand so intense that systems struggled to cope, with millions of orders attempted within hours. While the episode underscores strong consumer curiosity around AI-enabled commerce, it also exposes how aggressive discounting can overwhelm infrastructure, distort user behavior and shift focus from product value to price arbitrage. In China’s hyper-competitive digital economy, incentives remain an effective way to drive rapid adoption, but Alibaba’s experience shows that excessive subsidies risk eroding operational stability and long-term engagement — raising questions about whether scale built on giveaways can translate into sustainable usage once the discounts fade. For global brands, in saturated digital markets, growth comes from orchestrating experiences, incentives and timing.

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Alibaba’s $431M CNY giveaway crashes in 9 hours