The global gift cards market size is estimated to be valued at $1,396.0 billion by 2028, surging from $437.78 billion in 2020, at a CAGR of 15.4%.
COVID-19 Impact on the Gift Cards Market
During the COVID-19 pandemic, the global gift cards market experienced a significant impact. Various retail corporates in emerging countries like India and Japan have closed due to a drop-in instore consumer due to the pandemic. The gift cards market share has risen dramatically in recent years, but it is likely to face a modest fall in 2021 as a result of the COVID-19 pandemic. As a result, digital cards (e-gifting), often known as e-cards, have been the focus of technological innovation. Physical gift card sales were affected by store closures across the country owing to the COVID-19 pandemic.
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Global Gift Cards Market Insight
Consistent consumer engagement with shopping, thanks to rapid expansion in digital commerce, as well as an increase in the number of new technologies that enable customers with creative and seamless payment choices, are the primary growth factors for the market. Furthermore, increasing technological advances in gift cards assist organizations to increase sales by making their product offers more unique and appealing, hence propelling the gift cards market forward. Furthermore, during the forecast period, the increased use of smartphones and digital wallets is likely to provide chances for the gift cards market.
The gift card industry faces a number of security challenges, including the risk of being abused by hackers and criminals, which poses a significant barrier to expansion. Furthermore, in their efforts to make smartphone gift card adoption as quick and economical as possible, few merchants have overlooked security holes that allow any consumer to spend money on another shopper's gift card.
As a result of heightened economic constraints, certain company sectors are getting more inventive in their approaches to expanding operations. Gift cards are most likely to be used as a marketing tool in this case. Gift cards are a significant source of fast income flow for businesses (retail as well as ecommerce business) such as restaurants and cafeterias. Consistent consumer involvement with shopping, as a result of the rapid expansion of digital commerce, and an increase in the number of new technologies that provide customers with creative and frictionless payment options are the primary growth drivers for the market.
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Global Gift Cards Market Forecast, Segmentation
The global gift cards market is segmented based on type, sales channel, end-use, and region.
Type:
The type sub-segment is further classified into open loop and closed loop. The open loop sub-segment is predicted to have a dominating market share in the global market and register a revenue of $724.93 billion during the forecast period.
Because they allow customers to shop at multiple places, open loop gift cards have grown in popularity. Another major factor fueling the growth of the open loop gift card market is increased security. Because these cards can be used at a variety of stores, they can be used even if one of them closes. As a result, the gift card remains functional. Given these considerations, the segment's expansion is likely to continue in the next years.
Sales Channel:
The sales channel segment is further divided into instore and online sub-segments of which the online sales channel sub-segment is projected to grow at a faster CAGR and register maximum revenue during the forecast period. It is predicted that the market shall generate a revenue of $706.05 billion by 2028, growing from $185.5 billion in 2020, with a CAGR of 17.9%.
Online gift cards are commonly used in business expansion plans to boost brands, combat fraud, and attract more customers, among other things (sometimes, free gift cards are provided to consumers on their purchases). As a response, credit cards and prepaid cards are widely utilized in a variety of sectors, such as retail, food & beverage, consumer technology, hotel, and so on.
End-use:
The end-use segment is further bifurcated into retail and corporate. Among these, retail gift cards market sub-segment is anticipated to hold the maximum share of the global market revenue while corporate gift cards market is expected to be the fastest growing. The retail sub-segment is predicted to have a dominating market share in the global market and register a revenue of $876.72 billion during the forecast period.
The retail industry includes supermarkets and food products, pharmaceutics and drugs, hypermarkets, computers, and other communication gadgets. Due to the country's booming retail industry, gift card sales are likely to increase in the future. The rising presence of supermarkets/hypermarkets and other food and restaurant chains is anticipated to help boost gift card acceptance.
Region:
The gift cards in North America is anticipated to be the fastest growing market and reach $604.47 billion by 2028, with a CAGR of 15.0%.
North America is among the first markets to make extensive use of gift cards. In the United States, gift cards are by far the most common type of Christmas present, driving the country's booming gift card sector. Additionally, demand for gift cards has increased dramatically in recent years during holidays such as Christmas and birthdays, which has aided market growth.
Key Players in the Global Gift Cards Market
Some of the leading global gift cards market players are
- Amazon.com, Inc.
- American Express Company
- Apple Inc.
- Best Buy Company, Inc.
- Blackhawk Network Holdings, Inc.
- InComm Payments
- Qwikcilver Solutions Pvt Ltd.
- Target Corporation
- Starbucks Corporation
- Walmart Inc.
Along with the company profiles of the key players in the market, the report includes the Porter’s five forces model that gives deep insights into the competitive environment of the market.
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