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Chapter 568 0556 [One Chen Overpowers Two Ma]

The Spring Festival Gala red envelopes were even featured in a brief news segment on CCTV's "News Broadcast".

"Shaking and sending red envelopes became a new way to send blessings during this year's Spring Festival... According to data provided by ByteDance's WeChat official account, the total number of WeChat red envelopes sent and received on New Year's Eve exceeded 1 billion. From 8:00 PM to 12:28 AM on New Year's Eve, the total number of WeChat shake interactions during the Spring Festival Gala exceeded 10 billion..."

Across the country, during the next few days of the Spring Festival holiday, many friends and relatives will ask each other, "How many Spring Festival Gala red envelopes did you get?"

Many merchants have also faced questions from customers: "Why can't you accept WeChat Pay here?"

It became an instant hit!

Little Ma wasn't the only one knocked unconscious by that hammer blow.

And there's Ma Jieke.

Before the Spring Festival holiday was even over, the relevant person in charge of Alibaba's financial business was called back for a meeting.

Ma Jieke's expression was somewhat grim: "WeChat Pay and Youpay have launched a Pearl Harbor attack on us this time. Although we quickly formulated a countermeasure after they started their promotion, the power of the Spring Festival Gala red envelopes still exceeded my expectations..."

Both Alipay and WeChat Pay are currently in the stage of heavily investing in on-the-ground promotion of QR codes.

The main use cases for QR code payments are still in large chain stores and first-, second-, and third-tier cities. In small supermarkets in fourth- and fifth-tier cities and below, it's even difficult to find QR codes; it's far from the point where people use QR codes to buy groceries on the street.

Since offline payment scenarios are not yet widespread, most QR code payments are completed online. Therefore, the number of Alipay users, who are also active on Taobao, far exceeds that of WeChat Pay users.

However, the Spring Festival Gala red envelope campaign not only promoted WeChat, but also WeChat Pay.

Alipay CEO Shao Xiaofeng said, "The WeChat red envelopes that users receive are automatically deposited into their WeChat Wallet. If they want to use or send red envelopes, they only need to link a bank card if the amount is over 5 yuan."

"I immediately sent people to investigate on the first day of the Lunar New Year. We found that we had misjudged the psychology of users. Many people were willing to go to great lengths to link their bank cards for just two or three yuan in WeChat Wallet."

“Especially for middle-aged and elderly people, they don’t know how to use their WeChat Wallet, but they are afraid that it will just sit there and not belong to them. They don’t know how to link their bank cards to WeChat, so they pester their children to help them link their bank cards.”

"This Spring Festival Gala red envelope campaign not only brought WeChat a large number of users, but also caused a surge in WeChat users who linked their bank cards."

"This year we must allocate more cash and resources to promote Alipay QR codes to cities at all levels across the country..."

Peng Lei said, "The preliminary preparations for the financial services company (the predecessor of Ant Financial) are almost complete. Only by integrating all related businesses can we accelerate the development of financial services. Speed ​​is crucial, especially for QR code payments."

"In the area of ​​QR code payments, we are both competitors and allies with WeChat Pay. Once UnionPay completes its NFC upgrade, QR code payments may very well be banned!"

The QR code payment system that would later become popular was, at this time, a completely unorthodox approach.

Because what the government truly supports and promotes is NFC, and the most typical NFC product is Silver QuickPass.

As early as 2006, UnionPay QuickPass had already released version 1.0. Offline pilot promotion began in 2008.

Compared to QR code payments, NFC payment methods, such as UnionPay QuickPass, are more secure and reliable. However, their main drawback is the difficulty in widespread adoption, as it requires hardware upgrades to POS machines and other equipment.

This thing can only be widely used in convenience stores at most. You can't expect the old ladies selling vegetables on the roadside to carry an NFC-enabled payment machine with them all the time.

In practice, from 2008 to 2012, QuickPass was only available in a few places in some major cities.

However, can NFC, which has been officially promoted for several years, easily give way to QR codes?
Moreover, QR code payments do indeed pose security risks!

Peng Lei said, "The recent trend has been a bit off. Because the Spring Festival Gala red envelopes were so sensational and involved bank card binding, more than one scholar has said that WeChat red envelopes pose financial risks."

Ma Jieke said, "The official attitude is still unclear. I guess the higher-ups are also watching and waiting. The main reason is that the promotion of NFC payment is too slow."

Peng Lei said, "Therefore, we need to speed up our on-the-ground promotion and strive to make it a done deal within one or two years."

Shao Xiaofeng added, "When the rice is almost cooked, the authorities will probably react. I guess they might take the pot away and stop cooking it."

"We'll talk about the future later," Ma Jieke said.

In March 2014, in another timeline, the People's Bank of China suspended QR code payments.

But what's done is done, and the die is cast. So many businesses and ordinary people are using it; it's impossible to simply scrap it all.

Therefore, the banks took the lead in setting standards, improving technology, and controlling risks.

To put it bluntly, QR code payments must be co-opted!
Before being co-opted, there were no industry standards, numerous security vulnerabilities, and no clear competent authority could be found.

……

Just after the Spring Festival, Alibaba announced the establishment of "Small and Micro Financial Services Group" (the predecessor of Ant Financial), which will integrate Alipay and other financial businesses into it.

Subsequently, Alibaba's ground sales team began aggressively promoting Alipay QR codes in small shops in major cities and large shops in medium and small cities.

ByteDance, of course, couldn't sit idly by and frantically expanded its ground sales team to aggressively promote WeChat Pay QR codes.

And what about Tencent?

Although Tencent still wants to fight back, it has essentially conceded defeat and is preparing to integrate QQ and Zhangxun, focusing its efforts on promoting QQ Pay and QQ Wallet. In other words, Tencent can lose to ByteDance's WeChat, but it absolutely cannot lose to WeChat Pay!
A three-way battle for dominance in the mobile payment sector has begun.

The offline rollout of WeChat Pay's QR code has been very rapid, mainly thanks to the influence of the Spring Festival Gala's red envelope campaign.

Many shop owners participated in the Spring Festival Gala red envelope giveaway themselves, and some even voluntarily applied to generate payment QR codes.

Alternatively, after a customer questions why WeChat Pay isn't available, the business owner might proactively look into how to activate it.

The number of stores that accept QR code payments is increasing at a visible rate across the country!

The growth in one month is equivalent to that of the past six months.

Of course, besides the influence of the Spring Festival Gala red envelopes, the main reason is the increase in smartphone users.

In 2011, 7200 million smartphones were sold in mainland China.

In 2012, sales soared to 1.88 million units!

In the Chinese mainland market in 2012, the top ten smartphone brands in terms of sales volume were: Samsung, Lenovo, HarmonyOS, Coolpad, Huawei, ZTE, Apple, HTC, Gionee, and Tianyu.

Although HarmonyOS phone sales continue to rise, its ranking has fallen to third place—similar to the reasons for Apple's ranking decline.

The market structure has changed.

As the era of feature phones rapidly transitioned into the era of smartphones, the market mainstream inevitably shifted to low-end models. Especially budget phones priced around 1000 yuan, which represent the price range most affordable to the general public.

Why did Lenovo's sales surge? Because of its good relationship with telecom operators and its decision to abandon the mid-to-high-end market and focus on the low-end market.

Even HarmonyOS phones have started to cooperate with carriers to produce low-end contract phones, and at the end of the year, they launched the HarmonyOS A3 priced at 1188 yuan.

By the end of this year's Spring Festival, Samsung had a total of 65 smartphone models on sale. Especially noteworthy was the launch of three new smartphones between New Year's Day and Lunar New Year's Eve, all priced below 1200 yuan!
Although Xiaomi phones are very well-known, their models and shipment volume are too small to even make it into the top ten.

Nokia has officially fallen out of the top ten. The former king has completely fallen.

……

Chen Guiliang was interviewed by CCTV's Finance Channel as soon as he started working.

Reporter: "Some people say that WeChat Pay linked 100 million bank accounts on Lunar New Year's Eve. Is that true?"

Chen Guiliang: "It's not 1 million. The rumor is too exaggerated."

Reporter: "This Spring Festival, everyone across the country, both online and offline, was talking about WeChat red envelopes and WeChat Pay. Some experts say that the Spring Festival Gala red envelope campaign is the most successful business case in the Chinese internet industry in the past decade. Do you agree with this statement?"

Chen Guiliang: "I don't agree. Personally, what I'm most satisfied with is that the HarmonyOS system is open source."

Reporter: "What do you think is the fundamental reason for the huge success of the Spring Festival Gala's red envelope campaign?"

Chen Guiliang: "Smartphones have become widespread. The number of smartphones sold was 7200 million units the year before last, and it soared to 1.88 million units last year. Only when the general public uses smartphones can so many people participate in the Spring Festival Gala red envelope activity."

Reporter: "Some experts are saying that WeChat red envelopes and QR code payments pose security risks. What are your thoughts on this?"

Chen Guiliang: "We are being very cautious. At the same time, I also urge the central bank to take QR code payments seriously and to lead the development of industry standards with the participation of private enterprises."

Reporter: "Who came up with the idea for the Spring Festival Gala red envelope campaign?"

Chen Guiliang: "I had this idea and discussed it with CCTV. Then I contacted JD.com and many merchants, and together we made this a great event. ByteDance's product managers also deserve great credit; they were the ones who discussed and came up with the details of the event."

There are many things that the CCTV reporter didn't mention.

Jack Ma and Pony Ma are in a panic and have personally taken charge of countermeasures against WeChat.

During an internal Alibaba meeting, Jack Ma repeatedly likened the Spring Festival Gala red envelope campaign to a "Pearl Harbor attack," and even contacted CCTV's Lantern Festival Gala to organize an Alipay red envelope campaign.

How many viewers will there be at the Lantern Festival Gala? It's better than nothing.

Meanwhile, Tencent was arguing every day. Pony Ma wanted to merge Zhangxun into QQ, but Zhang Xiaolong still wanted to gamble with Zhangxun.

Finally, Pony Ma (Ma Huateng, founder of Tencent) forcefully made the decision, and QQ is currently undergoing a redesign. Some redundant features are being removed, while voice messaging, red envelopes, payments, shake-to-play, and other functions are being integrated.

Moreover, Tencent plans to spend hundreds of millions of yuan on promotion, especially QQ Pay.

They even offered Liu Qiangdong a price he couldn't refuse, placing QQ Pay at the very top of JD.com's payment page.

A well-informed senior programmer in the IT industry jokingly remarked: "2013 has only just begun, and the Chinese internet is already dominated by Chen Jianlin and Jack Ma. That man is too monstrous!"

After the Spring Festival, nearly half of the financial media in mainland China featured Chen Guiliang on their magazine covers.

For marketing majors, their first class after returning to campus often consists of professors boasting: "Did everyone grab the Spring Festival Gala red envelopes during the Lunar New Year? I've been following this since the event's pre-launch phase in January, carefully analyzing every aspect of the month-long event. This is a classic marketing case study worthy of being included in textbooks; Chen Guiliang is absolutely one of the world's top marketing geniuses..."

(End of this chapter)