May 26, 2022

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Gift cards market- Growing use of modern technology amongst millennials are the major factor propel the growth

Because of the increasing number of occasions and the popularity of the gifting culture, the demand for gift cards is increasing. Gift Card sales are witnessing significant growth during festivals and special days, such as Father’s Day, Friendship Day, Daughter’s Day, Mother’s Day, etc. Several organisations also recognise the performance of their employees and offer incentives in the form of gift cards. Gift Cards are widely used in restaurants, department stores, grocery stores, supermarkets, specialty stores, and cafes. All the factors mentioned above are expected to induce market growth substantially during the projection period.

The global gift cards market was valued at US$ 381.22 Bn in 2019 and is expected to increase at a CAGR of around 11.3% during the forecast period.

Global Gift Card Market Overview

A Gift Card is a prepaid debit card that for a variety of purchases contains a specific amount of money available for use. Gift Cards are generally provided by organisations, specific shops, restaurants in the voucher or coupon only for purchase at the relevant retail premises. They can not be imprisoned and may be subject to an expiry date or charges in some situations.

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Gift Cards can be tailored to the needs of the users and are appended with custom message or name on the front of the cardboard. They act as a personal gift or incentive for the receiver and can be presented as an appreciation prize to the employees.

Gift Cards are an integrated payment solution developed to ease the transaction at stores or businesses as a substitute for money. These cards establish a medium that supports smooth and hassle-free purchasing procedures during a variety of events, such as dining, entertainment, retail purchases, and others.

Growth drivers

The pervasiveness of the gifting culture

During festivals and special occasions such as Father’s Day, Friendship Day, Mother’s Day, etc. across the globe, the gifting culture has become pervasive, driving the growth of the market for the Global Gift Card. In addition, many organisations offer incentives for their excellent performance to their employees in the form of Gift Cards. People like to gift one another on their personal special days, and companies prefer to give away Gift Cards on their establishment day or on achieving the specific milestone of development.

Launch of new products in the Gift Cards category

Many vendors launch different kinds of Gift Cards with unique and advanced features keeping in mind its easy use and the motives of the receiver/customer to stay ahead in sales and competition. Numerous entertainment corporations collaborate with technology solutions providers to launch e-Gift Cards for shoppers across major online and retail marketplaces.

Restraints

Additional cost involved and use of plastics

The use of Gift Cards in case of any occasion, festivals, and promotion card may lead to additional loss of money. Also, the growing concern related to the use of plastics, paper, and fear may hinder the growth of the Gift Card industry during the forecast horizon.

Global Gift Card Market Segmentation

By Card Type

Based on type, the Gift Card market is segmented into Open Loop Gift Cards, Closed Loop Gift Cards, and E-gifting. Open Loop Gift Cards segment is expected to record the highest growth as it can be redeemed at any outlay where the respective brand card is accepted. While the Closed Loop Gift Card can be redeemed only at a specific retailer. E-cards are customizable according to the requirement of the customer and can be used on a particular website for special occasions and can be virtually sent through to the customers. The market of E-card is expected to grow at a substantial rate during the forecast period.

By Merchant Type

Based on Merchant type, the Gift Card market is segmented into Food Supermarkets, Department Stores, Restaurants, Coffee Shops, Discount Stores, Entertainment, Hotels, and Others. The overall rise in the usage of Gift Cards by all the merchandise stores is expected during the projection period to attract more customers. However, Discount Stores are estimated to grow at a as high rate as E-commerce websites like Amazon, Flipkart, etc., which extensively offer Gift Cards to their customers, to ensure repeated site visits. This is also a prominent factor aiding the market growth of Global Gift Card.

By geography, the Global Gift Card Market segregated into North America, Europe, Asia Pacific, Middle East & Africa, and Latin America. APAC is predicted to have the fastest growth in the Global Gift Card market over the forecast horizon. The developed countries such as US, Canada, UK, France, Germany, etc. are expected to witness steady growth in Gift Card market due to the prevalence of superstore and mall culture, advanced features of cards as well as intensive branding activities by companies. However, Asia-Pacific will register the highest CAGR during the projection period due to growing urbanization, higher per capita income, and demand in the corporate sector in developing countries like China and India.

Competitive Landscape

The leading players in the Gift Card market are, Blackhawk Network Holdings Inc., DOCUMAX Inc., Fidelity National Information Services Inc., Givex Corp, InComm Holdings Inc., National Gift Card Corp., Plastek Card Solutions, Inc., Qwikcilver Solutions, Pvt. Ltd., Stored Value Solutions, Inc., Duracard, Cashstar, Staples, Walmart, Lowe’s, Best Buy, Sam’s Club and other prominent players are expanding their presence in the market by implementing various business strategies.

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