Every In September, China’s tech giants launch a series of charity events, such as Alibaba’s September 5 Charity Week and Tencent’s September 9 Giving Day. Since this “charity month” tradition in China was pioneered by Tencent eight years ago, these peer-to-peer fundraising campaigns have become the main way for the general public in China to participate in charitable donations to non-profit organizations.
Similar to Alibaba’s popular Singles Day shopping festival, these mega-campaigns are managed and hosted by internet companies and their respective platforms. Platforms will often offer generous fund matching policies and incentives to encourage donations.
However, the past year has not been known as an easy year for most Chinese tech companies. Internet giants including Tencent and Alibaba reported slowing annual revenue growth, while ByteDance reported large layoffs across departments, including sectors such as edtech and gaming, which had grown strongly before being hit by regulatory changes.
Amid an economic slowdown, weak spending and regulatory pressure, what’s up with Chinese tech companies’ philanthropic spending?
Why do Chinese tech professionals hold giveaways?
While the charity craze usually subsides after the promotional period, it generates significant short-term traffic for platforms at a time when users are increasingly difficult to acquire and retain. According to data released by Tencent, more than 58.16 million donors participated in this year’s September 9 Giving Day, and total public donations reached RMB 3.3 billion (US$476 million). “Charity festivals look good to the public in difficult times and are a very obvious way for corporations to take social responsibility,” said Rui Ma, a Chinese tech analyst and investor.
It is also an important period for NGOs. “Every September has become an informal carnival for nonprofit workers,” said Jenny Yue, a volunteer at a Beijing-based charity, “marking it as the most active time and informal team-building experience for Chinese nonprofit professionals.”
Yue said the pandemic has hit NGOs hard, with many initiatives dying and funding for those remaining significantly reduced. Efforts during charity month are therefore critical to building a strong donor base and, for some, survival. “September. 9 has become almost a ‘must-have’ for non-profits instead of an option,” Yue said. Ubiquitous presentation from platforms including Tencent’s super app WeChat helps these organizations get more attention than they might otherwise get. .So NGO workers tend to use all the resources at their disposal to make the most of the festival.They recruit volunteers who are interested in the cause and give them special training on how to use the platforms and manage charity month campaigns to increase their impact during the festival.
Platform rules, however, while streamlining the donation process for charities, also create barriers for fundraisers, especially mass ones. Some smaller nonprofits that lack organizational capacity or digital know-how tend to fall behind during this time. ByteDance’s DOU Love Charity Day has sparked some debate about the fund distribution mechanism – fundraisers can only get promotional codes and bonuses based on the number of new users attracted to the platform.
However, as Internet companies emerge as definitive players in philanthropy, a more deliberate commitment to change the decades-old practice of philanthropy in China is expected.
The state of philanthropy in China
According to the charity research platform Global Giving, 80% of charitable giving in China comes from the corporate sector, unlike in the US, where 80% of charitable giving comes from individuals. These data reflect the difficulty of raising funds in China: the country’s modern philanthropic ecosystem only began to take shape after the market reforms of the 1980s, and before it had a chance to really flourish, it was hit by everything from executive scandals and corruption to complex bureaucracy and digital revolutions.
Thus, peer-to-peer social fundraising has become a fertile ground for Chinese social media giants to dominate and stand out. In 2018, China’s Ministry of Civil Affairs released a list of 10 companies authorized to raise funds, making the mega-internet companies the only players allowed to raise charitable funds online, along with several government-backed organizations. “Social media acts as a perfect pool of traffic that leads to an act of donation,” said Jonathan Yi, a Chinese internet analyst. “The WeChat-based September 9 Day of Giving has an exceptional fundraising advantage by mobilizing individual volunteers and their social circles. “
This year, Tencent improved its social token game “little safflower” to encourage wider participation in the annual campaign. Depositors could collect “little saffron” not only by giving money, but also by participating in charity activities, such as collecting treadmills on Tencent platforms and doing other good deeds. donation. “The sharing-forgiving-sharing chain perpetuates itself among the network of acquaintances, creating a virtuous circle,” Yi said.
The same goes for Douyin, another social app based on human-to-human interaction, which can be built on existing user habit, charitable donations. In 2020, ByteDance was finally approved by the Ministry of Civil Affairs as an authorized online donation platform. However, unlike WeChat, which has regular social interactions, Douyin leans more toward creator-consumer relationships. Thus, the platform has adapted a matching fund policy to attract new users: the donations of newly registered users are multiplied by 20 and the platform is matched.
This isn’t the first time ByteDance has tried to use its app’s social function for charity. On the global version of TikTok, creators can choose a charity of their choice to feature on their profile, not just a call to action, but a sense of identity.
Differentiation by giving
Boasting the longest-running and most-attended charity festival, Tencent is moving beyond mere donations and expanding its all-encompassing ecosystem from business to business. Digital Toolbox, a suite of multiple Tencent services including Tencent Cloud, Tencent Doc, and Tencent Meeting, was a Tencent initiative designed to help NGOs digitize. The Chinese tech giant has also launched accessible versions of a number 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 prioritized empowering small merchants. Starting in 2019, Taobao allowed merchants to label some of their goods as “charity items,” meaning a portion of the proceeds will go to a charity of the store owner’s choice. In 2022, 2.2 million Taobao merchants participated in this campaign, and 500 million consumers supported the initiative.
Although its education division has undergone a major restructuring, ByteDance is still actively working to build an education empire outside of its influence. In its 2021 ESG report, the company listed “education capital” as the top value of “high importance”, ahead of “technological innovation” and “preserving originality”. This year, ByteDance launched multiple education-related initiatives, including one designed to help rural Fujian elementary schools gain access to digital education.
Despite the economic slowdown, China’s tech majors are unlikely to stop hosting charity festivals. In fact, they can rely more on peer-to-peer donations and extend their influence further into users’ daily lives. As large Internet companies try to cut costs and increase efficiency, regular charity events can become another form of marketing for them.