Alibaba is set to invest 3 billion yuan ($431 million) in a major promotional campaign for its Qwen AI app during the upcoming Lunar New Year holiday, marking a significant escalation in the race among China’s leading tech companies to attract users to their artificial intelligence platforms. The initiative, which triples the spending of competitors Tencent and Baidu, will offer a variety of incentives across dining, entertainment, and leisure activities, alongside a continuous distribution of digital red envelopes aimed at boosting user engagement.

The campaign highlights how Chinese technology firms leverage the Lunar New Year, one of the country’s most important public holidays, to drive customer acquisition and enhance brand loyalty. During this period, hundreds of millions of people travel, spend time with family, and engage with mobile apps, making it an ideal window for digital marketing campaigns.

Alibaba’s rivals have responded with smaller-scale promotions. Tencent plans to spend 1 billion yuan promoting its Yuanbao chatbot, while Baidu has committed 500 million yuan for similar efforts. Both companies are offering digital rewards that can be redeemed through their respective platforms, reinforcing the competitive landscape in China’s fast-growing AI sector.

Analysts note that this surge in investment comes amid a rapidly evolving domestic AI market, spurred by the launch of DeepSeek’s R1 model last year. The introduction of advanced AI tools has intensified competition, prompting major players to accelerate user acquisition strategies and strengthen their technological offerings. Several firms, including DeepSeek, are planning additional upgrades and launches ahead of the holiday period, aiming to capture market share through enhanced functionality such as coding capabilities and content generation.

The timing of Alibaba’s campaign is also notable. The company is positioning itself to capture attention during a nine-day Lunar New Year period, longer than in most previous years, ensuring maximum exposure and engagement for its Qwen AI platform. While Alibaba has not specified whether rewards will take the form of cash or platform-specific discount coupons, the strategy clearly aims to increase active users and encourage wider adoption of AI-powered services across its ecosystem, including the e-commerce platform Taobao.

The aggressive spending underlines how Lunar New Year has evolved into a strategic battleground for digital platforms. Observers point to historical precedents, such as Tencent’s 2015 use of WeChat to distribute digital red envelopes, which significantly expanded WeChat Pay’s reach and reshaped China’s mobile payment market. This year, the focus has shifted toward AI adoption, signaling a broader push by tech companies to integrate artificial intelligence into daily consumer interactions.

With competition intensifying and AI technology advancing rapidly, the Lunar New Year promotional period is likely to play a pivotal role in determining market dynamics and user engagement strategies for leading Chinese technology firms in 2026.