Online Red Packets: A Large-scale Empirical Study of Gift Giving on WeChat

Abstract: Gift giving is a ubiquitous social phenomenon, and red packets have been used as monetary gifts in Asian countries for thousands of years. In recent years, online red packets have become widespread in China through the WeChat platform. Exploiting a unique dataset consisting of 61 million group red packets and seven million users, we conduct a large-scale, data-driven study to understand the spread of red packets and the effect of red packets on group activity. We find that the cash flows between provinces are largely consistent with provincial GDP rankings, e.g., red packets are sent from users in the south to those in the north. By distinguishing spontaneous from reciprocal red packets, we reveal the behavioral patterns in sending red packets: males, seniors, and people with more in-group friends are more inclined to spontaneously send red packets, while red packets from females, youths, and people with less in-group friends are more reciprocal. Furthermore, we use propensity score matching to study the external effects of red packets on group dynamics. We show that red packets increase group participation and strengthen in-group relationships, which partly explain the benefits and motivations for sending red packets.