Alipay joins in offering electronic red packets

Alibaba's third-party payment service Alipay became the latest Internet company to allow users to give electronic hongbao, or red packet, via their smartphones.

The latest move by Alibaba aims to consolidate its position in the mobile payment market.

Alipay yesterday unveiled the latest version of its smartphone application on both Apple's iOS and Android to allow users give out red packets to their contacts.

Alipay officials said it will work with online vendors as well as offline retailers to give as much as 1 billion yuan (US$160 million) worth of virtual red package or coupons to users during the Lunar New Year holiday which runs from February 18-24.

Tencent made a similar move before the Lunar New Year holiday in January last year and in the process created a digital makeover to the traditional Chinese New Year tradition of giving red packets of money for the social media generation.

By the end of the third quarter of last year, Tencent's mobile payments accounted for 10 percent of the domestic mobile payment market, with Alipay taking a dominant 82.6 percent, according to Internet consultancy iResearch Inc.

Market watchers pointed out that both companies are trying to strengthen their payment services and at the same time bringing more social features to make online payments familiar to ordinary people.