China red envelope marketing start-up raises $28m

The investors, Yuanhao Investment and Hexiang Investment, also participated in a pre-Series A round two months earlier.

Hangzhou-based Saoyasao, which was founded in June 2022, claims to have helped 1m merchants connect with customers through digital channels, according to a statement. Digital red envelopes have emerged as a popular tool to link online and offline operations in the post-pandemic era.

China's consumer confidence index plummeted to record lows in April and May, according to the National Bureau of Statistics. Offline stores have been especially hard hit.

Saoyasao aims to combat this by distributing vouchers for restaurants, hair salons, clothing stores, and spas directly to Alipay accounts. Consumers must use them within seven days. Those that do are rewarded with an extra discount for their next shopping experience.

In this way, offline merchants can establish relationships with customers. It is also a stepping stone for merchants to build their own customer databases and generate so-called private domain traffic to realise accurate matching and marketing.

Saoyasao starts off providing the capital for red envelopes and receives commissions when vouchers drive real consumption. The platform can also be used by governments and industry associations to launch subsidy programmes.

The underlying structure was recently expanded to include WeChat.

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• Topics
• Greater China
• Early-stage
• Consumer
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• China
• enterprise software
• TMT