Morgan Stanley estimates that total promotional spending across platforms is likely to exceed 8 billion yuan, with Doubao standing out due to its top-tier traffic access during the CCTV Spring Festival Gala and relatively balanced three-dimensional performance; Tongyi Qianwen achieved remarkable order scale through deep integration within the Alibaba ecosystem, but the quality of user engagement still needs improvement.
Written by: Zhao Ying
Source: Wall Street Watch
Burning money of 8 billion is a virtual fire of traffic or real gold? Morgan Stanley’s latest research report closely reviews the intense competition of AI applications during the 2026 Spring Festival,
According to Hard AI, the 2026 Spring Festival saw the first large-scale user competition driven by subsidies in China's consumer-grade AI sector. The four giants - Alibaba (Tongyi Qianwen/Qwen), ByteDance (Doubao/Doubao), Tencent (Yuanbao/Yuanbao), and Baidu (Wenxin/Ernie) - collectively poured money into cash red envelopes, consumption vouchers, Spring Festival Gala sponsorships, and other methods to snatch users. Morgan Stanley estimates that total promotional spending across platforms is likely to exceed 8 billion yuan, covering various dimensions such as cash red envelopes, subsidies per order, ecosystem traffic imports, and media exposure.
However, post-feast, the quality varies greatly across companies. Based on Questmobile data, Morgan Stanley conducted a systematic evaluation of each platform across three dimensions: traffic scale, user engagement, and post-event retention. The conclusion is clear and harsh: short-term DAU surges are shared by all, but only Doubao and Tongyi Qianwen can genuinely retain users; while the long-term outcome hinges on product practicality, ecosystem integration capability, and the creation of real value beyond monetary incentives.
Morgan Stanley believes that this Spring Festival battle is essentially a positional war for "super entrances." Who can maintain a user base after the rebound of subsidies will hold an advantage in the next phase of AI commercialization competition. From the current data, Doubao from ByteDance and Tongyi Qianwen from Alibaba performed relatively well, while Tencent's Yuanbao showed concerning retention performance, and Baidu was almost absent in this battle.
Burning Money Scale: Alibaba Leads, Total Expenditure Exceeds 8 Billion
The investment intensity of each platform varies significantly:
Alibaba (Tongyi Qianwen): Officially announced a "3 billion Spring Festival hospitality plan," centered around 25 yuan no-threshold consumption vouchers, covering scenarios such as takeout, instant retail, movie tickets, airline tickets, hotels, etc., deeply integrating Taobao, Hema, Tmall Supermarket, Fliggy, Damai, Alipay, and other ecosystems. The validity period of the vouchers has been extended multiple times (from February 23 to February 28, and then to March 3). Morgan Stanley estimates that actual spending is likely to exceed 5 billion yuan (approximately 200 million orders × 25 yuan vouchers = 5 billion, plus other brand marketing costs).
ByteDance (Doubao): Deeply tied to CCTV Spring Festival Gala, gaining extensive media exposure; also launched a cash prize lottery activity (from February 13 to 16, with individual red envelopes up to 8888 yuan), and 100,000 high-value tech prizes (robots, drones, etc.). Morgan Stanley estimates that total expenditure far exceeds 1.5 billion yuan (just the prize values alone are about 1.5 billion yuan). During the event, Doubao 2.0 (February 14) and Seedance 2.0 (February 12) were simultaneously launched.
Tencent (Yuanbao): Invested 1 billion yuan in cash red envelopes (from February 1 to 23), distributed via the Yuanbao app and Yuanbao group, combined with lotteries and task systems (such as AI image generation/creative tasks) for additional opportunities. Notably, on February 4, WeChat blocked direct links to the Yuanbao red envelope activities, which were later re-launched in the form of "password red envelopes." Marketing focus was centered on DeepSeek model capabilities.
Baidu (Wenxin): Invested 500 million yuan in cash red envelopes (from January 26 to March 12), distributed on the Baidu app and Wenxin app, and became the chief AI partner for Beijing Satellite TV's Spring Festival Gala.
Traffic Explosion: Doubao > Tongyi Qianwen > Yuanbao, All Three Achieved Significant DAU Growth
All three major players achieved significant DAU growth during the Spring Festival, but their absolute scale and growth rates varied:
Doubao: DAU before the event was about 84 million (February 10), reaching a peak of 144.5 million on the New Year's Eve (February 16) when CCTV Spring Festival Gala was broadcast, a net increase of about 60.5 million DAU. During the Spring Festival, Doubao's large model's token processing capacity (TPM) peaked at 63.3 billion on February 16, with over 1.9 billion AI-related queries processed that night. Weekly active users (WAU) peaked at 253 million during the week of February 16 to 22, 41% higher than the average of 179 million since the beginning of the year.
Tongyi Qianwen: From a baseline of about 17 million DAU before the event, it peaked at 73.5 million the day after the launch (February 7), a net increase of about 56.5 million DAU. DAU reached 58.5 million on the first day of the event (February 6), with 25% (about 14.8 million) being participants in the event; at peak the next day, 27% (about 19.7 million) were participants. WAU reached 134 million, 165 million, and 127 million during the three weeks of February 2 to 8, February 9 to 15, and February 16 to 22, respectively (compared to an event average of only 17 million up to that point).
Yuanbao: From a baseline of 7 million DAU in January 2026, it peaked at 40.5 million on February 16, with a net increase of about 33.5 million DAU. As of February 17, the official peak DAU exceeded 50 million, and MAU reached 114 million. WAU showed continuous improvement from February 2 to 22, peaking at 56 million.
Baidu (Wenxin): The WAU of the Wenxin app peaked at only 3.4 million during the week of February 9 to 15; the peak DAU was 826,000.
User Engagement: Doubao > Yuanbao > Tongyi Qianwen, Explosive Growth Accompanied by Sharp Drop in Average Usage Time
The rapid expansion of traffic is generally accompanied by a compression of average usage time, but the degree of compression varies significantly across platforms, reflecting the differences in user quality:
Tongyi Qianwen: Average daily usage time dropped sharply from 6.3 minutes before the event to 3 to 5 minutes during the Spring Festival peak, a decline of up to 51%. Specifically, the week of February 2 to 8 saw 7 minutes, dropping to 5 minutes from February 9 to 15, and further to a historical low of 3 minutes from February 16 to 22. This data indicates that Tongyi Qianwen's Spring Festival traffic is highly concentrated on transactional behaviors (placing orders to receive vouchers), with very short user engagement time, typical of a "transaction-oriented, low-duration" usage pattern.
Yuanbao: Average daily usage time declined by about 32% compared to January 2026, with a three-week average of about 6.5 minutes (6.7 minutes, 5.8 minutes, 7.0 minutes respectively), indicating relatively low average engagement from new users.
Doubao: Average daily usage time only moderately declined by about 15%, dropping to 8.7 minutes during the week of February 16 to 22 (previous average was 10.2 minutes), making it the platform with the strongest resilience in user engagement, maintaining relatively robust user stickiness even while significantly expanding DAU.
Post-Event Retention: Tongyi Qianwen > Doubao > Yuanbao, The Truth Emerges After Subsidy Tides Retreated
After February 16, traffic across platforms showed varying degrees of decline, but the differences in retreat magnitudes exposed essential disparities in user retention abilities:
Yuanbao: Showed the poorest retention performance, with DAU quickly falling back to nearly pre-event levels after the event, making it the platform with the most severe rollback.
Doubao: Experienced a noticeable retreat from its peak, but its user base remained structurally higher than pre-Spring Festival levels, indicating that the event did indeed solidify a group of real users.
Tongyi Qianwen: Post-event daU remains obviously higher than pre-event levels, showing the best performance. However, Morgan Stanley specifically pointed out that this relative resilience is partly due to the validity period of the consumption vouchers being extended to March 3, thus the retention data contains a certain degree of "artificial support," requiring further observation after the voucher period ends.
Order and Ecosystem Data: Alibaba's AI Ecommerce Report Card
The order data for Tongyi Qianwen during the Spring Festival is particularly impressive, fully demonstrating the advantages of Alibaba's ecosystem integration:
From February 6 to 23, approximately 200 million orders were completed through Tongyi Qianwen (about 120 million orders from February 6 to 12, and about 80 million orders from February 12 to 23);
1.02 billion drinks were ordered through Tongyi Qianwen (55.2 million cups of milk tea, 35.2 million cups of fruit tea, 11.4 million cups of coffee);
Airline tickets, hotel accommodations, and scenic ticket orders increased by +540%, +161%, and +2429% respectively;
Over 4 million users aged 60 and above placed orders through Tongyi Qianwen;
Nearly 50% of orders came from users in county and rural areas;
As of February 17, over 130 million consumers first used the Tongyi Qianwen app for AI-assisted shopping.
Super Entrance Competition, Outcome Undecided but Landscape Emerging
Morgan Stanley's core judgment is that this Spring Festival battle marks the official start of the competition for China's consumer-grade AI "next super entrance," but a short-term traffic explosion does not equate to long-term victory.
From a comprehensive assessment across three dimensions:
- Traffic Scale: Doubao > Tongyi Qianwen > Yuanbao
- User Engagement: Doubao > Yuanbao > Tongyi Qianwen
- Post-Event Retention: Tongyi Qianwen > Doubao > Yuanbao
Doubao, leveraging the top-tier traffic access of CCTV Spring Festival Gala and relatively balanced three-dimensional performance, stands out the most overall; Tongyi Qianwen achieved remarkable order scale through deep integration within the Alibaba ecosystem, but the quality of user participation needs improvement; Yuanbao's retention performance is concerning, with the effects of the 1 billion yuan red envelope mostly limited to short-term exposure; Baidu seemed to fall behind in this battle, with Wenxin app data not on par with the other three.
Morgan Stanley emphasizes that the key to long-term success lies in whether platforms can retain users through product practicality after events, whether seamless ecosystem integration can be achieved, and whether genuine value can be created that surpasses monetary incentives. For investors, this Spring Festival battle serves as an important window to observe the user acquisition efficiency and retention capabilities of major AI platforms, and subsequent data evolution warrants continued tracking.
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