Alibaba Group is sharply escalating competition in China’s fast-moving artificial intelligence market by committing 3 billion yuan, or about $431 million, to attract users to its Qwen AI app during the Lunar New Year holiday. The campaign, which begins on February 6, significantly exceeds the promotional spending announced by major rivals Tencent and Baidu and highlights how strategic the festive season has become for AI adoption in China.
Alibaba said the initiative will feature incentives linked to dining, drinks, entertainment and leisure, along with large red envelopes distributed on a continuous basis. While the company did not clarify whether the rewards will be paid as cash or as discount coupons, they are expected to be redeemable across Alibaba’s ecosystem, including its Taobao e-commerce platform.
Tencent and Baidu revealed late last month that they would spend 1 billion yuan and 500 million yuan respectively on similar Lunar New Year promotions for their AI chatbot applications. Tencent’s campaign focuses on its Yuanbao chatbot app and allows users to withdraw digital red envelopes directly into their WeChat wallets, reinforcing the deep integration between its AI services and payment platform, Reuters news report said.
The Lunar New Year period has long been a critical marketing battleground for Chinese technology companies, as hundreds of millions of people travel, spend time with family and increase their use of mobile apps. A landmark example came in 2015, when Tencent used digital red envelopes within WeChat to rapidly expand WeChat Pay and challenge Alipay’s dominance in mobile payments.
This year’s public holiday begins on February 15 and runs for nine days, longer than most previous years, giving companies an extended window to capture user attention and drive engagement with new AI services.
Competition in China’s AI sector has intensified since the launch of DeepSeek’s R1 model in January last year, which unsettled global AI markets and accelerated both adoption and rivalry among domestic players. In the run-up to the holiday, several AI firms have announced upgrades, and DeepSeek is expected to unveil its next-generation V4 model with enhanced coding capabilities in mid-February.
Pricing for Qwen Models and API Use
For developers using Qwen models via Alibaba Cloud Model Studio, pricing varies by model and context window:
Qwen-Plus is priced at around $0.40 per million input tokens and $1.20 per million output tokens, with a free quota offered in some tiers.
Larger models such as Qwen3-Max also have tiered pricing for input and output tokens, with options up to about $3 and $15 per million tokens in certain tiers.
The consumer-facing Qwen app itself remains available free to users, designed as a comprehensive AI assistant without initial charges for basic use.
Alibaba’s aggressive spending plan underscores how central AI has become to the strategies of China’s leading technology groups, as they race to lock in users, build ecosystems and shape consumer habits during one of the country’s most commercially important seasons.
RAJANI BABURAJAN
