The first AI Spring Festival showdown—who won?

The first AI Spring Festival showdown—who won?

Is the 8 billion burn just a flow bubble or real gold? Morgan Stanley revisits the 2026 Chinese New Year AI app battle in their latest research report,

According to Hard AI, the 2026 Chinese New Year saw China's consumer AI sector face its first large-scale subsidy-driven user acquisition war. Alibaba (Tongyi Qianwen/Qwen), ByteDance (Doubao), Tencent (Yuanbao), and Baidu (Ernie) all joined the battle, using cash red envelopes, coupons, and Spring Festival Gala sponsorships to spend money and attract users. Morgan Stanley estimates that total promotional spending across platforms likely exceeded 8 billion RMB, covering cash red envelopes, per-order subsidies, ecosystem traffic introduction, and media exposure.

Yet after the traffic feast, each company's results varied widely. Based on Questmobile data, Morgan Stanley systematically evaluated platforms on three dimensions: traffic scale, user engagement, and post-event retention. The conclusion is clear and brutal: Short-term DAU spikes were universal, but only Doubao and Tongyi Qianwen managed to retain users; the key to long-term victory is product usefulness, ecosystem integration, and value creation beyond monetary incentives.

Morgan Stanley believes that this Chinese New Year war was essentially a battle for "super gateways." Whoever can retain their basic user base after subsidies fade will have a first-mover advantage in the next stage of AI commercialization. Currently, Doubao from ByteDance and Tongyi Qianwen from Alibaba are the standouts; Yuanbao from Tencent shows worrying retention, while Baidu is nearly absent from this battle.

Burn Scale: Alibaba is the fiercest, total spending exceeds 8 billion RMB

The spending intensity varies significantly by platform:

  • Alibaba (Tongyi Qianwen): Officially announced a "3 billion RMB New Year Treat Plan," centered on 25 RMB no-minimum coupons covering takeout, instant retail, movie tickets, flights, hotels, and more, deeply integrating Taobao, Hema, Tmall Supermarket, Fliggy, Damai, and Alipay. The coupon validity was repeatedly extended (from Feb 23 to Feb 28, then to Mar 3). Morgan Stanley estimates actual spending likely exceeded 5 billion RMB (2 billion orders × 25 RMB per order = 5 billion RMB, plus other brand marketing costs).
  • ByteDance (Doubao): Deeply tied to CCTV Spring Festival Gala, with massive media exposure; simultaneously launched cash red envelope lottery (Feb 13–16, max single envelope 8888 RMB) and 100,000 high-value tech prizes (robots, drones, etc). Morgan Stanley estimates total spending well over 1.5 billion RMB (prize value alone about 1.5 billion RMB). Doubao 2.0 (Feb 14) and Seedance 2.0 (Feb 12) were released during the event.
  • Tencent (Yuanbao): Invested 1 billion RMB in cash red envelopes (Feb 1–23), distributed via Yuanbao App and Yuanbao group, combining lotteries and task systems (e.g., AI image generation/creative tasks). Notably, on Feb 4 WeChat blocked Yuanbao red envelope activity links, which later relaunched via "password red envelopes." Marketing focused on DeepSeek model capabilities.
  • Baidu (Ernie): Invested 500 million RMB in cash red envelopes (Jan 26–Mar 12), distributed on Baidu App and Ernie App, and became chief AI partner of Beijing TV’s Spring Festival Gala.

Traffic Explosion: Doubao > Tongyi Qianwen > Yuanbao; all three saw massive DAU jumps

The three main players saw significant DAU growth during Chinese New Year, but with differing absolute values and growth rates:

  • Doubao: DAU before event ~84 million (Feb 10), peaked at 144.5 million on Chinese New Year’s Eve (Feb 16), net increase ~60.5 million DAU. During Chinese New Year, Doubao’s model reached TPM peak at 63.3 billion on Feb 16, processing over 1.9 billion AI queries in one evening. WAU peaked at 253 million for Feb 16–22, 41% higher than the previous Jan-to-date average of 179 million.
  • Tongyi Qianwen: From a baseline ~17 million DAU, peaked at 73.5 million on the second day of the event (Feb 7), net increase ~56.5 million DAU. DAU reached 58.5 million on Feb 6 (25%, ~14.8 million, were event participants); at Feb 7 peak, 27% (~19.7 million) were event participants. WAU across three weeks: 134 million (Feb 2–8), 165 million (Feb 9–15), 127 million (Feb 16–22), vs. previous Jan-to-date average of only 17 million.
  • Yuanbao: From 7 million DAU in Jan 2026, peaked at 40.5 million on Feb 16, net increase ~33.5 million DAU. As of Feb 17, official peak DAU over 50 million, MAU 114 million. WAU peaked at 56 million over Feb 2–22.
  • Baidu (Ernie): Clearly lagged. Despite promotions, Baidu App WAU and DAU declined week-by-week since the start of the year. Ernie App WAU peaked at 3.4 million during Feb 9–15 (55% above previous average of 2.2 million, but fell 27% the next week); DAU peak 826,000 (32% above average of 627,000, but fell 18% week-on-week).

User Engagement: Doubao > Yuanbao > Tongyi Qianwen; traffic surge accompanied by average duration drop

Rapid traffic expansion generally comes with compressed average usage time, but the extent varied by platform, reflecting differences in user quality:

  • Tongyi Qianwen: Average daily usage dropped from 6.3 minutes pre-event to 3–5 minutes during peak, a 51% reduction. Specifically, Feb 2–8 averaged 7 minutes, dropping to 5 minutes Feb 9–15, and 3 minutes Feb 16–22, a historic low. Data shows traffic was highly concentrated in transaction behavior (ordering to get coupons), with extremely short user stays, a typical “transactional, low-duration” usage mode.
  • Yuanbao: Average daily usage dropped about 32% versus Jan 2026, with three-week average around 6.5 minutes (6.7, 5.8, and 7.0 min respectively), indicating lower per-user engagement among new users.
  • Doubao: Average daily usage only declined mildly by 15%, dropping to 8.7 minutes for Feb 16–22 (previous average 10.2 min), the most resilient of the three, maintaining strong user stickiness even as DAU expanded sharply.

Post-event retention: Tongyi Qianwen > Doubao > Yuanbao; truth emerges as subsidies fade

After Feb 16, all platforms saw some traffic drop-off, but the scale reveals each platform’s true retention capabilities:

  • Yuanbao: Worst retention. DAU quickly reverted to near pre-event levels after activity ended, the sharpest pullback of the three.
  • Doubao: Significant drop from peak, but core user base structurally higher than before Chinese New Year, showing real users were retained during the event.
  • Tongyi Qianwen: Post-event DAU remains clearly above pre-event levels, most impressive. Morgan Stanley notes, however, that this resilience is partly due to coupon validity being extended to March 3, so retention is partly “artificially supported.” Further observation needed after coupon period ends.

Orders and Ecosystem Data: Alibaba’s AI e-commerce experiment report card

Tongyi Qianwen's order data during Chinese New Year was particularly notable, showing Alibaba’s advantage in ecosystem integration:

  • Feb 6–23: About 2 billion orders via Tongyi Qianwen (1.2 bn Feb 6–12, 800m Feb 12–23)
  • 1.02 billion drinks ordered through Tongyi Qianwen (55.2m milk tea, 35.2m fruit tea, 11.4m coffee)
  • Flight, hotel, and tourist attraction tickets orders grew +540%, +161%, +2429% respectively
  • Over 4 million users aged 60+ placed orders via Tongyi Qianwen
  • Nearly 50% of orders came from county and rural users
  • By Feb 17, over 130 million consumers shopped with AI-assistance for the first time via Tongyi Qianwen App.

"Super gateway" competition: outcome undetermined, but initial pattern emerging

Morgan Stanley’s core view: This Chinese New Year marks the official start of the battle for China’s next consumer AI "super gateway," but short-term traffic explosion is not equivalent to long-term victory.

Based on comprehensive evaluation in three dimensions:

  • Traffic scale: Doubao > Tongyi Qianwen > Yuanbao
  • User engagement: Doubao > Yuanbao > Tongyi Qianwen
  • Post-event retention: Tongyi Qianwen > Doubao > Yuanbao

Doubao, leveraging CCTV's Spring Festival Gala for top-tier traffic and balanced performance in all dimensions, leads overall; Tongyi Qianwen achieved astonishing order volume thanks to deep Alibaba ecosystem integration, but user engagement quality needs improvement; Yuanbao’s retention is worrying, as the 1 billion RMB red envelope had mainly short-term exposure effect; Baidu nearly dropped out, Ernie App’s data nowhere near the other three.

Morgan Stanley emphasizes that The real key to long-term success is: after the event, can the platform retain users through product practicality, achieve seamless ecosystem integration, and create genuine value beyond monetary incentives. For investors, this Chinese New Year battle is an important window to observe user acquisition and retention efficiency of each AI platform—future data is worth following closely.

This article is from WeChat Account "Hard AI". For more AI news, visit here

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