The Chinese New Year tradition of giving red envelopes of money - known as hongbao - has been given a digital makeover for the social media generation.

Receiving red envelopes of cash from family members and family friends has long been a Spring Festival highlight for Chinese children.

But e-hongbao, introduced by mobile chatting app WeChat, has now become a popular way of sending Chinese New Year greetings among the younger generation.

The sender transfers cash from a debit card to an e-hongbao that is then distributed among a group of recipients. Adding to the fun, the share that each person receives is generated randomly.

So if a 100-yuan (US$16.5) e-hongbao is sent to 10 people, their share can range from 1 cent - one hundredth of a yuan - to 99.01 yuan.

"At first, I wondered why people were willing to spend real money online for virtually nothing," said a Shanghai office worker surnamed Miao. "But when a friend sent out an e-hongbao on WeChat during a night out, it created all kinds of responses.

"Some were delighted with what they received while others felt disappointed at getting only a few cents. It was like lottery," she added.

Miao said she enjoyed e-hongbao fun among different groups of friends on the Chinese New Year's Eve, and - thanks to good luck - ended up tens of yuan better off in the process.

WeChat owner Tencent said data showed that in the 40 hours before 4pm on January 31 - Chinese New Year's Day - more than 5 million WeChat users received money from more than 20 million virtual red envelopes.

For Tencent, China's largest Internet company by market value, the e-hongbao initiative was a business decision as it is aiming to increase the number of mobile payment users on WeChat.

But for many people it's a welcome diversion from the burdens of hongbao obligations in the real world.

"It's impolite if someone sends a red envelope and you don't reciprocate," a young father surnamed Zhang said. "But at least an e-hongbao contains only a small sum of money and people are usually happy receiving them, regardless of the amount. It's enjoyable."

For Zhang, physically distributing red envelopes is less fun.

He reckons he has given out about 15,000 yuan in hongbao to his parents and children of relatives so far during the Spring Festival, while his five-year-old son has received about 10,000 yuan in return.

"It can leave you feeling a little bitter as you have to give out more if you are receiving more," Zhang said.

"And the sums are going up every year," he added. "Red envelopes should now contain 300 yuan to 500 yuan, and I even gave out several containing 1,000 yuan."

The Beijing News surveyed 102 residents in Beijing and found that more than 40 percent have spent over 1,000 yuan on hongbao this year, and a quarter have given out ones containing more than 500 yuan.

Singapore-based United Overseas Bank said in a report last week that residents in China's large cities on average spend 6,000 yuan on hongbao during the Spring Festival.