All In September, Chinese tech majors launch a series of charity events, such as Alibaba’s September 5 Charity Week and Tencent’s September 9 Donation Day. Since this “charity month” tradition in China was started eight years ago by Tencent, these peer-to-peer fundraising campaigns have become the main way the general public in China gets involved in donations. charities to non-profit organizations.
Similar to Alibaba’s famous Singles Day shopping festival, these mega campaigns are led and hosted by internet companies and their respective platforms. Platforms often offer generous funding policies and incentives to encourage donations.
However, the past year has not been seen as easy for most Chinese tech companies. Internet giants including Tencent and Alibaba reported slowing year-over-year revenue growth, while ByteDance reportedly cut a large number of employees across all departments, including in sectors like edtech and gaming that were experiencing strong growth before being impacted by regulatory changes.
In a time of economic slowdown, low spending and regulatory pressure, what is the appeal for Chinese tech companies to spend on charity events?
Why do Chinese tech majors hold giveaway events?
Although the charity frenzy usually wanes after the promotional period, it still creates substantial short-term traffic for the platforms at a time when users are increasingly difficult to win and retain. According to data released by Tencent, more than 58.16 million donors participated in the Donation Day on September 9 this year, and total public donations amounted to 3.3 billion RMB ($476 million). ). “Charity festivals look good to the public in these times of distress and are a highly visible way to demonstrate corporate social responsibility,” said Rui Ma, a Chinese technology analyst and investor.
It is also an important period for NGOs. “Each September has become an unofficial carnival for nonprofit workers,” said Jenny Yue, a volunteer at a Beijing-based charity, “noting that it is the busiest time for nonprofit workers. Chinese non-profit professionals and unofficial team-building experience.”
Yue said the pandemic had hit NGOs hard, with many initiatives dying out and funding for those that remained being cut significantly. Efforts during Charity Month have therefore become paramount to building a strong donor base and, for some, to survival. “Sept. 9 has almost become a ‘must’ rather than an option for nonprofits,” Yue said. attention that these organizations could never otherwise get. So NGO workers tend to use all available resources to get the most out of the festival. They recruit volunteers who care about the cause and train them specifically on how to use the platforms and navigate their charity month campaigns to maximize their impact during the festival.
The platform’s rules, however, while strengthening the donation process for charities, also create obstacles for fundraisers, especially grassroots ones. Some smaller nonprofits lacking organizational capacity or digital know-how are likely to be left behind during this time. ByteDance’s DOU Love Charity Day has reportedly sparked debate regarding its matching fund distribution mechanism – fundraisers can only get promo codes and bonuses based on the number of new users attracted to the platform.
Yet, as internet companies become mainstream players in philanthropy, more thoughtful engagements are set to transform China’s decades-old charitable practices.
The state of philanthropy in China
Unlike in the United States, where 80% of charitable giving comes from individuals, 80% of charitable giving in China comes from the corporate sector, according to charity research platform Global Giving. These data reflect the challenge of fundraising in China: the country’s modern philanthropic ecosystem only began to form after the market reforms of the 1980s and has suffered blows ranging from executive scandals and corruption complicated bureaucracy and digital revolutions before it really had a chance to flourish.
Peer-to-peer social fundraising has thus become fertile ground for Chinese social media giants to establish dominance and differentiate themselves. In 2018, China’s Ministry of Civil Affairs announced a list of 10 companies allowed to fundraise, making internet mega-companies the only players allowed to do online charity fundraising alongside a few government-backed organizations. government. “Social media is a perfect pool of traffic that leads to the act of giving,” said Jonathan Yi, a Chinese internet analyst. “WeChat-based September 9 Donation Day is particularly beneficial when it comes to fundraising by mobilizing individual volunteers and their social circle. ”
This year, Tencent updated its “little safflower” social token game to encourage wider participation in the annual campaign. Contributors could collect “small safflower” not only by donating money, but also by participating in charitable activities, such as collecting mileage and other good deeds on Tencent platforms, all in addition to the final number of “small safflower” and the corresponding match. Don. “The share-gift-share chain is perpetuated within a network of acquaintances, and formulates a virtuous circle,” Yi said.
The same goes for Douyin, another social app based on human-to-human interaction, an existing user habit on which charitable donations could be built. In 2020, ByteDance was finally approved by the Ministry of Civil Affairs as an authorized online donation platform. However, unlike WeChat, which retains regular social interactions, Douyin leans heavily towards a creator-consumer relationship. The platform has thus adapted its matching funds policy to attract new users: donations from new subscribers are multiplied by 20 and matched by the platform.
This isn’t the first time that ByteDance has tried to leverage the social function of its apps for charity. On the global version of TikTok, creators can choose a charity of their choice to display on their profile, designating not just a call to action but a sense of identity.
Differentiation by donation
Tencent, which has the oldest and most widely attended charity festival, is moving beyond simple donations and beginning to expand its global ecosystem into business-to-business areas. Digital Toolbox, a bundle of a plethora of Tencent services including Tencent Cloud, Tencent Doc, and Tencent Meeting, was an initiative designed by Tencent to help NGOs digitize. The Chinese tech giant has also launched an accessible version of a full range of products including WeChat, QQ Mailbox, QQ Music and Tencent News to support people with disabilities.
On the other hand, Alibaba, as an e-commerce platform, has made empowering small traders its top priority. Starting in 2019, Taobao allowed merchants to label some of their items as “charity products”, which means that a portion of the revenue will go to a charitable cause chosen by the store owner. In 2022, 2.2 million Taobao merchants participated in this campaign, while 500 million consumers supported the initiative.
Although its education unit is undergoing a major revamp, ByteDance is still actively working to build an education empire out of its influence. In its 2021 ESG report, the company ranked “equity in education” as its top “very important” value, ahead of “technological innovation” and “protection of originality”. This year, ByteDance launched several education-related initiatives, including one aimed at helping Fujian primary schools in rural areas access digital education.
Despite economic stagnation, Chinese tech majors are highly unlikely to stop hosting charity festivals. In fact, they could rely more on peer-to-peer donations and further expand their influence in users’ daily lives. At a time when big internet companies are trying to cut costs and increase efficiency, regular charity events could become another form of marketing for them.
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