The AR Hongbao game, which is available on payment app Alipay, allows users to search for and collect virtual red envelopes called hongbao.
The hongbao, which contain money, are gifted to friends and family at Chinese New Year as a token of good luck.
The location-based game was inspired by Pokemon Go and enables Alipay users to scan objects with their smartphones cameras to hide the red envelopes and send clues to their friends to help find them.
Coca-Cola, KFC and Procter & Gamble have also signed up to give away cash and vouchers to game users.
The campaign aims to leverage the popular tradition to promote Alibaba’s mobile payment service within China and abroad. It also ties into a series of activities that Alibaba hopes will link rural Chinese life to urban.
Rival technology giant Tencent has also released its own location-based AR virtual red envelope game through its instant messaging app QQ.
The popularity of virtual red envelopes has increased steadily in recent years. Last year Alipay gifted RMB 269 million ($39 million) while rival technology giant Tencent’s WeChat reported more than 8 million virtual red envelopes during last year’s Chinese New Year, more than eight times the number sent the previous year.