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on April 17, 2024
Gift cards are widely used prepaid cards that allow customers to purchase goods and services from a specific retailer or group of retailers. Gift cards offer consumers flexibility and ease of usage and act as an alternative to physical gifts. The gift card market has witnessed increased demand owing to the growing popularity of digital gift cards and the increasing prevalence of online shopping. The global gift card industry benefited due to the COVID-19 pandemic amid nationwide lockdowns as people shifted their discretionary spending towards gift cards.
The Global Gift Card Market is estimated to be valued at US$ 12.33 Bn in 2024 and is expected to exhibit a CAGR of 10% over the forecast period 2024 to 2031.
Key Takeaways
Key players operating in the gift card market are Abbott Laboratories, F. Hoffmann-La Roche AG, Thermo Fisher Scientific Inc., Bio-Rad Laboratories, Inc., Danaher Corporation, Randox Laboratories Ltd., Siemens Healthineers, and BioMérieux SA. These players are focusing on developing new and innovative gift card offerings and partnerships to expand their market share.
The rising popularity of online shopping and m-commerce have created lucrative opportunities for Gift Card Market Size providers to collaborate with e-commerce giants and introduce customizable digital gift cards. Gift cards allow buyers to purchase products from affiliated retail chains digitally without worrying about sizes, colors or models.
The gift card market is witnessing global expansion with providers focusing on partnerships with payment networks and retailers in developing regions. The growing middle-class population in Asia Pacific and Latin America provide an opportunity for gift card providers to enter new markets.
Market Drivers
Growth of the e-commerce & m-commerce industries: Increased penetration of smartphones and faster internet connectivity has boosted the adoption of online shopping. Many e-commerce giants offer gift cards that can be used for purchases across their platforms, driving the market growth.
Increased use of gift cards as corporate gifts: Companies are increasingly using gift cards as employee engagement and client gifting tools. Digital gift cards allow easy management and distribution of corporate gifts compared to traditional options.
Market Restrains
Security issues related to gift cards: With the rise in digital gift card usage, security breaches involving theft of funds loaded onto cards have increased. This discourages some consumers from opting for gift cards.
Limited options for unused balances: Leftover balances in some open-loop gift cards cannot be refunded or used for future purchases, which is a major complaint of consumers.
Segment Analysis
This market is segmented based on merchant ability, where open-loop gift cards hold the dominating sub-segment share. Open loop gift cards can be used at multiple merchants unlike closed loop gift cards. The consumer convenience and widespread acceptance across major retailers has made open loop gift cards very popular among consumers and corporate organizations for gift giving.
Physical gift cards lead the format segment for holding the highest share currently. However, the digital/e-gift cards sub segment is witnessing highest growth due to rise in online shopping and increasing smartphone usage. The pandemic has further accelerated the demand for contactless payment options and e-commerce, bolstering the demand for digital gift cards.
Global Analysis
North America reigns as the fastest growing as well as the dominant region in the global gift card market. The US alone contributes to around half of the global gift card market share. Early adoption of digital technology and high spend capacity of consumers on gift cards have aided market growth in the region.
Asia Pacific will emerge as the most lucrative regional market in upcoming years. Countries like India, China and Japan are witnessing increasing trend of gifting culture coupled rising disposable income. Expanding middle class population inclined towards online retail sales is positively impacting the Asia Pacific gift card market.
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