CNY Special: How the e-ang bao and digital gold are fuelling the rise of virtual gifting in Asia.
The red packet goes digital this Chinese New year
In a tradition dating back centuries, Chinese elders make gifts of money to children and unmarried relatives during the Lunar New Year, wishing wealth and prosperity for them in the coming year.
This gift-giving began during the days of Imperial China, where children would wake up on the first day of the new year to find gold coins threaded with red string under their pillows.
Later on, with the advent of paper money, the practice morphed into the current convention of giving gold coins or notes slipped into red packets, known colloquially throughout Asia as hong bao, lai see, or ang bao.
Now, traditions rooted in the past are adapting to the times, and the practice of giving and receiving red packets is changing to fit the highly digitised lifestyles of modern society.
Electronic red packets have been rising steadily in popularity over the last few years in China, Hong Kong, Taiwan, and Macau after being introduced by the Chinese internet company, Tencent, a few years back in 2014.
In 2019 alone, more than half of China’s population — around 823 million people — used Tencent’s messaging platform WeChat to send virtual hong bao to relatives and friends during Chinese New Year, and those same numbers or more are expected during the upcoming celebrations for the Year of the Rat.
The leap from physical to virtual gifting seems a logical step for consumers in Asia, as they hold some of the highest digital payment adoption rates in the world.
Combined with advanced infrastructure and encouraging support from governments and businesses, people in the Asia-Pacific region are leading the way in the cashless revolution, and as familiarity with mobile wallets and digital payments have increased over time, so too has the practice of sending digital gifts to become more common among its users.
Other popular gifts in Asian cultures, such as gold, now have the option of being given through virtual means. Digital gold makes it easier for mainstream consumers to purchase and give gold online without having to worry about the custodianship and safety of their gold.
Many digital gifters cite the overall ease and convenience of sending virtual packets as the motivations for their choice — no more tedious lining up at banks or burning of perfectly usable notes to supply the demand for fresh, crisp money for the new year — or paying gold vaults to store and insure the gold received from family members.
Sending gifts of red packets and gold to friends and family members scattered around the world also becomes a matter of a few taps on a mobile screen now that virtual gifting across borders is possible.
For traditionalists though, the physical act of giving is more personal and important than the gift itself, and the majority of virtual gift users tend to be the generations born between the 1970s to the 1990s. Nevertheless, there are still ways to bridge the gap between old and new, such as the QR code e-hongbao created by DBS Bank in Singapore which preserves the mechanism of giving red packets without the hassle of handling physical cash.
The approach was well-received during its pilot phase with an estimated US$1.5 million loaded onto QR code red packets throughout the Chinese New Year period in 2019.
While conventional gift-giving may never truly be replaced by digital gifts, the practice is becoming solidified into everyday behaviour for many consumers in a region where technological disruption usually receives a warm welcome.
Throughout the last decade, Asian nations have taken great strides towards becoming truly cashless — compared to the 4.7 per cent growth in cashless payments estimated for the US in 2020, emerging Asian markets are expected to see a 30 per cent rise and around US$208.7 billion spent via mobile wallets and digital payment systems this year.
If that’s any indication for the decade to come, then the trend of digital payments and virtual gifting likely won’t end with e-ang bao and digital gold. They will be just one of many new traditions to evolve from digital disruption in 2020 and beyond.
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