How e-ang bao and digital gold are modernising traditional gifts
Whether you call them hong bao, ang bao or lai see, the ubiquitous red packets are an indelible part of every Chinese New Year for millions of people throughout Asia and other parts of the world.
Giving and receiving these gifts of money are born of a tradition dating back centuries – one that has progressed from Imperial Chinese gold coins to modern paper notes – and now even to virtual gold.
Electronic red packets, introduced in 2014 by Chinese internet company Tencent, have become increasingly popular over the years both within and outside China. During the Lunar New Year period last year, close to 823 million people – more than half of China’s 1 billion-strong population – used Tencent’s messaging platform, WeChat, to send e-hong bao to relatives and friends. In Singapore, DBS Bank reported that the total number of e-ang bao sent during Chinese New Year last year was almost double that of the previous year, thanks in large part to the introduction of the QR code e-ang bao that functions as a customisable gift card that can be loaded with any amount and given like a conventional red packet while still being conveniently cashless.
In general, consumers in Asia have shown an open-mindedness to evolving traditional practices alongside progressing modernity. Digital transformation in the form of increased smartphone adoption, broader internet connectivity and innovative superapps have pushed the emerging markets in Asia further towards a future where cashless is king, and the region is expected to overtake the US in cashless payments this year with an estimated US$208.7 billion to be spent exclusively via mobile wallets and digital payment systems.
According to data from Google, Temasek and Bain, the adoption of digital payments in Southeast Asia has reached the inflection point, and is expected to cross US$1 trillion in transactions by 2025 – which will account for almost one in every two dollars spent in the region.
For many in Asia Pacific, mobile wallets and digital payments are an accustomed part of their routine lives, so it is unsurprising that virtual gifting is also catching on in these communities. Even gold – another popular gift in Asian cultures for weddings and birthdays – can now be given and received by virtual means. Going digital simplifies the process of purchasing and giving gold for mainstream consumers, as it removes the need to worry about custodianship or safe-keeping of their gold.
Much of the appeal of digital gifting lies in its ease and convenience compared to traditional gift-giving. Where you would once have spent hours in line at the bank to get fresh, new notes and pack them into stacks of red packets, you can now easily send the same gift and well wishes in minutes via smartphone even if the recipient lives in another country. In the past, people would have had to pay gold vaults to store and insure the gold they received from their family, while now, digital gold can be purchased and managed through a mobile app with the matters of storage and security being settled automatically.
Take for instance the aforementioned QR code e-ang bao, which keeps the practice of handing out red packets intact without the need for gifters to handle physical money. The uptake was heartening for the QR code e-ang bao last year, as a total of US$1.1 million was loaded onto gift cards during the festive period and DBS Bank brought the concept back with new features for the Lunar New Year this year.
The biggest users of virtual red packets and digital gifts tend to be from the Generations X, Y, Z – those born between the 1970s and the 1990s – but some companies have been creative about making virtual gifting more palatable for audiences who are looking for a more personal experience.
There will always be a place and time for conventional gift-giving, but what the growing popularity for virtual gifting tells us about Asia is that the region continues to be a hub for digital innovation and adoption – one that is ready to modernise the traditions of its rich cultural heritage while still embracing the next era of technological change.
- Shaun Djie is co-founder and COO at Digix.