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It has long been a tradition for Chinese people to exchange hongbao – red envelopes stuffed with cash – with families, friends and colleagues when celebrating the Lunar New Year. This year, the old tradition took on a new spin as millions chose to send their hongbao electronically through their smartphones, via a new feature on WeChat, the ubiquitous social networking and messaging app from Chinese Internet giant Tencent.

Besides the traditional method of exchanging hongbao – sending specific amounts of money to specific contacts – the feature allowed the sender to distribute the cash to multiple friends via group conversations. The sender could also decide how much they wanted to give in total and to how many people, but then allow the app to randomly select the recipients. Both senders and receivers were required to link their bank accounts to the app.

It is estimated that over the nine days between January 30 and February 6, eight million WeChat users received a total of 40 million“envelopes.” Tencent was obviously hoping to secure the lion’s share of China’s enormous mobile payment market. While analysts had previously expressed doubt over the viability of WeChat’s business model, most now believe the company is trying to turn the app into a diversified mobile e-commerce platform.

This is just the latest example of how mobile Internet could cater to people’s needs, and generate billions of dollars in profit every day in the process. Chinese people are already using mobile devices to book taxis, movie tickets, air tickets and hotels, reserve restaurant seats, watch live video feeds, read the news, play games and find dates.

With unprecedented penetration of mobile Internet use connecting the online and offline world, there has been much discussion about the revolutionary impact of the mobile Internet, not only on the traditional Internet industry, but on many traditional industries, and the economic structure as a whole.

Promising Market

In the past few years, China’s mobile Internet market has seen drastic growth. According to the China Internet Network Information Center (CNNIC), a government-backed industry administration body, Internet users in China reached 618 million by the end of 2013. Among them, 500 million connect to the Web using smartphones,80 million more than the previous year, a 16 percent increase. A research report released in mid-January by iResearch, a leading Chinese IT consultancy, stated that the number of Chinese mobile Internet users would surpass the number of traditional Internet users in 2017.

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