Every year at Chinese New Year, people hand over red envelopes full of cash, known as hong bao. This year though, WeChat, a hugely popular instant messaging application with 600 million users, has introduced virtual lucky money.

According to the China Internet Network Information Centre, the country had 618 million internet users by the end of last year, with four out of five using mobile devices to go online.

WeChat is owned by the Tencent group, and its main rivals is Alibaba, which since last year has operated a similar system at Lunar New Year through its Alipay service.

The Alipay gift-giving campaign designates that users must request a gift, and it has a smaller user base for its messaging service.

Amounts in the virtual red envelopes ranged from a few cents to 200 yuan (€24.40) and is proving particularly popular among youngsters.

90 per cent ownership
In China, more than 90 per cent of 18-to-30-year-olds own an internet-connected smartphone, according to a Global Times survey last year.

The WeChat cash is either transferred directly, or can be put up in a chat group for members to distribute randomly among friends, although it is luckier to give than to receive.

18m yuan transferred
In its first 24 hours of operation, 18 million yuan (€2.2 million) was transferred. It has also apparently increased the number of people using WeChat's payment system by tens of millions of users.

In Hong Kong, the bitcoin exchange ANX is giving away thousands of euros worth of bitcoin vouchers.

Competition for market share in the internet finance sector is intense and the big internet firms have also been offering competing wealth management platforms, as people look for outlets to invest their Lunar New Year bonuses.

Tencent’s WeChat users transferred more than 800 million yuan (€97.5 million) to the app’s wealth-management platform, Licaitong on January 22nd, the day it was launched. Licaitong will compete with Alibaba’s Yu’E Bao.