The gift card market allows customers to purchase gift cards/vouchers that can be redeemed for goods and services. Gift cards are an easy and convenient alternative to traditional gift giving and help people select gifts suitable for the recipient’s needs and preferences. Different options are available in terms of card design, denomination value, expiry periods, and redemption processes. Some key advantages include greater flexibility, hassle-free gifting, customized design options, redemption tracking, safe and secure transactions, and customer loyalty programs. Gift cards have gained immense popularity for various occasions including birthdays, weddings, anniversaries, promotions, employee incentives, and seasonal gift giving.
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.
Growth of the e-commerce and m-commerce sectors has facilitated digitalization of gift cards. Consumers are increasingly preferring digital/e-gift cards over physical cards owing to benefits such as instant delivery, flexibility in usage, and round-the-clock availability.
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. The gift card industry is getting increasingly consolidated with mergers and acquisitions among major players.
The growing demand for Gift Card Market Growth from the corporate sector is also driving market growth. Companies are using gift cards for employee recognition programs, sales incentives, rewards and loyalty programs. Gift cards offer higher flexibility and assurance of redemption compared to physical gifts.
Rapid digitalization and expansion of online shopping has resulted in strong growth opportunity for e-gift cards globally. Development of advanced technology infrastructure has enabled wider acceptance of digital payments in developing markets of Asia Pacific and Latin America. This is encouraging the global expansion of gift card companies in these untapped regions.
Market Drivers
Increased digitalization is a major market driver for the gift card industry. Advent of advanced technologies like blockchain, mobile wallets, and contactless payments has facilitated issuance, purchase, and redemption of digital gift cards. The growing preference for safe, convenient and secure digital payment methods will continue driving demand. Shift towards online shopping, m-commerce and remote working has also boosted adoption of digital gift cards globally.
Geopolitical situation is impacting the Gift Card Market:
The ongoing geopolitical tensions and economic uncertainties across many countries are impacting consumer spending on gift cards. With high inflation rates and rising costs of living, discretionary spending on gifts is declining in countries facing economic turmoil. This is negatively impacting the growth of the gift card market globally. However, gift cards are still considered a convenient gift-giving option during such uncertain times compared to physical gifts. Market players need to focus on promoting gift cards for essential spending categories like groceries and fuel to boost sales. They should also focus on collaborating with small businesses and leveraging the growing e-commerce industry to increase gift card acceptance points. Offering attractive rewards and loyalty programs can further drive gift card usage. Overcoming supply chain challenges through local sourcing and strategic inventory management will be crucial for market players. Continuing digital innovation and developing multi-purpose gift cards can help the market recover faster once macroeconomic conditions stabilize across regions.
Geographical regions where Gift Card Market is concentrated in terms of value:
North America currently accounts for the largest share of the global gift card market in terms value. The U.S. is a major contributor, supported by high Gift card usage rates and the large retail industry in the country. In Europe as well, countries like the UK, Germany, France have developed gift card markets. However, the Asia Pacific region is emerging as an important market led by growth in China, India, and other Association of Southeast Asian Nations (ASEAN) countries. With rising incomes, changing lifestyles, growth of digital payments and e-commerce, gift card adoption is increasing rapidly across urban areas of Asia Pacific creating new opportunities for market expansion.
Fastest growing region for the Gift Card Market:
The Asia Pacific region is poised to become the fastest growing regional market for gift cards over the forecast period. The retail sector is booming in the region supported by rising disposable incomes, rapid urbanization, increasing internet and smartphone penetration. E-commerce is gaining widespread adoption in the region. These factors are supporting increasing gift card usage, especially among young urban populations. Countries like China, India, Indonesia, Vietnam and others offer high growth potential for gift card programs. Furthermore, gift cards are gaining acceptance as corporate and promotional gifts across Asian businesses. With economic growth expected to remain strong, the Asia Pacific region will be critical for future expansion of the global gift card market.
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