Gift cards are prepaid debit cards filled with cashless money that can be used to purchase any item linked with the company or brand providing the card. They can be loaded with funds for future use within a stipulated time before its expiry. This form of payment is usually done to purchase items at retail stores, restaurants, gas station, wholesale stores, and many more. It is often used as a marketing strategy by companies to maintain or generate customer engagement and increase brand awareness.
Forecast Analysis of the Global Gift Cards Market
The global gift cards market is anticipated to experience an exponential growth during the forecast period (2021-2028), owing to the increased use of smart phones among people coupled with efficiency in payment options concerned with the gift cards. In addition, rising internet penetration around the globe and surging demand for enhanced transactional services are further expected to drive the growth of the market during the forecast period. But prevalence of security breaches by hackers and criminals is expected to restrain the growth of the market during the forecast period. However, persistent technological advancements for seamless payment solutions for customers and increasing prevalence of gift vouchers among restaurants, cafeterias, and retail stores are expected to create massive opportunities for the growth of the market during the forecast period.
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According to the report published by Research Dive, the global gift cards market is expected to generate a revenue of $1,396.01 billion by 2028, growing rapidly at a CAGR of 15.4% during the forecast period. The major players of the market include Amazon.com Inc., American Express Company, Walmart Inc., Best Buy Company Inc., Apple Inc., Qwickcilver Solutions Pvt. Ltd., Target Corporation, Starbucks Corporation, Blackhawk Network Holdings, Inc., InComm Payments, and many more.
Recent Developments
The key companies operating in the industry are adopting various growth strategies & business tactics such as partnerships, collaborations, mergers & acquisitions, and launches to maintain a robust position in the overall market, which is subsequently helping the global gift cards market to grow expeditiously.
For instance, in November 2020, Blackhawk Network, a dominant global payments provider acquired National Gift Card, one of the biggest North American prepaid tech and card companies, in order to further maximize Blackhawk’s incentive solutions and bolster their end-to-end program management solutions.
In November 2020, InComm Payments, a dominant global payments technology company, acquired Tado Cartoes, one of Brazil’s main closed-loop gift card processors, in order to accelerate IncComm Payments’ prevalence in the country by tapping the processing and distribution of closed-loop gift cards.
In June 2021, LIC Cards Services Ltd. (LIC CSL), a wholly owned subsidiary of LIC of India, launched a prepaid gift card called “Shagun”, in collaboration with IDBI Bank, one of India’s largest commercial banks. The “Shagun” gift card offers seamless loading of funds from Rs 500 to Rs 10,000, facilitating multiple transactions with a validity of three years.
COVID-19 Impact on the Market
The outbreak of COVID-19 has had an adverse impact on the growth of the global gift cards market, owing to the lockdowns that were prevalent in various countries across the globe. There has been a gradual shift from physical gift cards to virtual gift cards during the pandemic but the physical gifts cards contributed to a significant share, whose prevalence consequently decreased due to store closures around the globe during lockdowns. Thus, the pandemic has had a negative impact on the growth of the global gift cards market.
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Most Profitable Region
The North America region is expected to have the highest market share, and hence dominate the market during the forecast period. The North America gift cards market is anticipated to generate a revenue of $604.47 billion, during the forecast period. Extensive use of gift cards during Christmas, birthdays, graduation day, Mother’s Day, Thanksgivings, baby showers, and so on is expected to bolster the growth of the market in this region.
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