Alibaba escalates Qwen campaign as China chatbot race heats up

The campaign is scheduled to begin on Feb. 6 and will roll out “large red envelopes” on a continuous basis, with perks tied to dining, drinks, entertainment and leisure, the company said. The spending level exceeds comparable pushes announced by rivals: Tencent has said it will spend 1 billion yuan on promotions for its Yuanbao chatbot app, while Baidu has set a 500 million yuan budget for a similar holiday drive.

Timing is not accidental. The public holiday period begins on Feb. 15 and runs nine days this year, longer than in most previous years, creating a concentrated window when hundreds of millions of people travel, spend more time on phones, and are more receptive to app-based promotions. Chinese tech firms have repeatedly used the holiday to win users at scale, with the best-known precedent dating back to 2015, when Tencent’s digital red envelopes helped WeChat Pay gain ground against Alipay in mobile payments.

Tencent’s current campaign is structured as a product funnel as much as a giveaway. Its promotion for Yuanbao began on Feb. 1, requiring users to upgrade the app to the latest version to claim digital red envelopes that can be withdrawn to WeChat wallets. Tencent is also using referral-style mechanics that allow users to share links carrying cash rewards for others to claim.

Alibaba has not specified whether its own rewards will be cash red envelopes or discounts that can be redeemed across its platforms, including Taobao, leaving open how directly the program converts into spend on its commerce ecosystem versus serving as a pure chatbot adoption subsidy. Still, the format highlights where the competition is headed: the “front end” is becoming distribution, while model quality becomes table stakes.

Alibaba has been pushing to make Qwen more than a chat interface. In mid-January, the company upgraded the Qwen app with features such as ordering food and booking travel, signaling a bid to embed the assistant into everyday transactions and not just knowledge queries. That strategy pairs naturally with holiday incentives, where coupons and red envelopes can act as on-ramps into repeat usage across consumer categories.

The broader backdrop is an accelerating domestic AI arms race that intensified after DeepSeek’s R1 model helped reshape competitive expectations and pushed faster adoption across China’s tech sector. DeepSeek is expected to unveil its next-generation model V4 in mid-February, adding urgency for incumbents to lock in users and mindshare before another jump in capability resets the leaderboard.