Gift cards have emerged as one of the most preferred gifting options among individuals as they eliminate the hassles involved in choosing gifts. Gift cards are pre-paid cards that can be redeemed at participating retailers towards the purchase of goods and services. The growing popularity of online shopping has increased demand for digital or online gift cards that can be used on major e-commerce platforms. Their advantages include personalization, flexibility in redemption, convenient online purchase and delivery, and increasing merchant acceptance.
The global Online Gift Card Market is estimated to be valued at US$ 560 billion in 2023 and is expected to exhibit a CAGR of 10% over the forecast period 2023-2033, as highlighted in a new report published by Coherent Market Insights.
Market Opportunity:
The growing popularity of e-commerce has opened new opportunities for the growth of the online gift card market. According to statistics, the global e-commerce sales are expected to reach $7.4 trillion by 2025. Major e-commerce platforms have partnered with several retailers and merchants to allow customers to purchase and redeem gift cards on their digital platforms. This offers consumers flexibility and choice while boosting sales for merchants. With rising online shopping trends, the opportunity to use gift cards on e-commerce platforms is expected to drive higher demand and adoption of digital gift cards during the forecast period.
Porter's Analysis
Threat of new entrants: Low startup capital requirement can attract new entrants but established players have strong brand recognition and distribution networks.
Bargaining power of buyers: Buyers have high bargaining power due to availability of substitutes and undifferentiated products. They can negotiate on prices and drive competition amongst existing players.
Bargaining power of suppliers: Suppliers have low bargaining power as raw materials required are widely available and existing players source from multiple suppliers to avoid dependency on any single player.
Threat of new substitutes: Low as gift cards are preferred gifts over physical gifts due to advantages like convenience, suitability for varied occasions and personalities.
Competitive rivalry: High amongst major players to gain market share through innovative products, tie-ups, and loyalty programs.
SWOT Analysis
Strengths: Growing usage of plastic money, digital transactions; suitable for all occasions and age-groups.
Weaknesses: Requires heavy marketing spends; limited usage of certain denominations.
Opportunities: Underpenetrated developing markets; rise of e-commerce; corporate gifting.
Threats: Economic slowdowns impact discretionary spend; alternative gifting options like cash, vouchers.
Key Takeaways
The Global Gift Card Market Demand is expected to witness high growth over the forecast period.
North America accounts for the largest share currently due to high gift card adoption among consumers. Growing youth population with rising spending on digital platforms willcontinue to propel demand.
Asia Pacific is projected to be the fastest growing region supported by rising middle class, expanding organized retail, and online shopping trends in major countries like India and China. Developing nations provide scope for penetration of plastic money-based gifting.
Key players operating in the gift card market are Amazon, Walmart, GooglePay, Apple, Starbucks, Home Depot, Walgreens, Carrefour, Lowe's, IKEA, and Macys. These major retailers offer branded and private label gift cards that enhance loyalty while driving additional sales. Innovation in product categories and partnership with digital wallet players are key strategies adopted.
For more details on the report, Read- https://www.ukwebwire.com/gift-card-market-demand-share-analysis/
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