Gift Card Market To Reach USD 1,897.46 Billion Globally By 2030, Driven By Digital Adoption And Corporate Gifting Credence Research Inc.

(MENAFN- PR Newswire)

PUNE, India, Nov. 20, 2024 /PRNewswire/ -- The global gift card market, valued at USD 818.52 billion in 2022, is projected to reach USD 1,897.46 billion by 2030, growing at a CAGR of 10.46%. Key drivers include the rising adoption of digital gift cards and increased corporate gifting initiatives.

Gift Card market Size and Forecast

Growing Market Demand for Gift Cards

The global gift card market is poised for substantial growth, driven by the increasing shift toward cashless transactions and rising consumer demand for flexible gifting options. According to a report published by Credence Research titled " Gift Cards Market By Material Merchant Type (Restaurants, Department Stores, Grocery Stores, Supermarkets/Hypermarkets, Discount Stores, Coffee Shops, Entertainments, Salons/Spa, Book Stores, Home Décor Stores, Gas Stations, Visa/Master Card/American Express Gift Cards, Others) By Merchant Type (Universal Accepted Open Loop, Restaurant Closed Loop, Retail Closed Loop, Miscellaneous Closed Loop, E-Gifting) By End User – Growth, Future Prospects and Competitive Analysis, 2022 – 2030 "
In 2022, the market was valued at approximately USD 818.52 billion and is projected to reach USD 1,897.46 billion by 2030 , reflecting a CAGR of 10.46% over the forecast period. The surging popularity of digital gift cards, particularly those integrated with e-commerce platforms, plays a pivotal role in this expansion. Additionally, businesses are leveraging gift cards as effective marketing tools to enhance customer loyalty and retention. Seasonal and holiday purchases, coupled with corporate gifting programs for employee rewards, continue to drive significant revenue growth in this sector.

Regional Insights and Future Opportunities

North America dominates the global gift card market, attributed to its advanced digital payment infrastructure and widespread adoption of e-commerce. However, the Asia-Pacific region is expected to witness the fastest growth due to increasing smartphone penetration, digital payment adoption, and expanding middle-class consumer bases in countries like India and China. Innovations such as customizable and reloadable gift cards, along with blockchain-based solutions ensuring security and transparency, are creating lucrative opportunities for market players. Challenges, such as fraud and lack of awareness in emerging markets, remain but are being addressed through technological advancements and regulatory frameworks.

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Gift Card Market Drivers

The Rise of Digital Payment Solutions Driving the Gift Card Market

The increasing adoption of digital payment systems is a key driver for the gift card market. For instance, a study found that the usage of digital payments increased by nearly 30% in 2022, driven by the convenience and speed of cashless transactions. Consumers are gravitating toward cashless transactions due to their convenience, speed, and security, making digital gift cards an attractive choice. According to a survey, 75% of respondents preferred digital gift cards over physical ones because of their ease of use and instant delivery. Their compatibility with e-commerce platforms and mobile wallets has further boosted their popularity, with digital wallets accounting for 45% of all online transactions in 2023

Gift Cards as a Preferred Tool for Corporate Rewards and Loyalty Programs

Corporates are increasingly leveraging gift cards as part of their employee reward programs and customer loyalty initiatives. For instance, a survey revealed that 79% of employees work harder when they feel recognized, and gift card programs offer a simple, impactful way to make that recognition felt. These cards provide flexibility and personalization, making them a cost-effective way to incentivize employees and retain customers. Additionally, companies have reported a 25% increase in employee satisfaction and engagement when using gift cards as rewards. Their ease of distribution and the ability to tailor them to individual preferences make gift cards an effective tool for driving market growth.

The Role of E-Commerce in Boosting Gift Card Demand

The rapid expansion of e-commerce has significantly contributed to the growth of the gift card market. For instance, during the pandemic, digital gift card sales surged by 80% year-over-year as consumers increasingly turned to online shopping to avoid crowds. Digital gift cards, in particular, have become integral to online shopping experiences, allowing consumers to make purchases or send gifts conveniently. A survey found that 92% of respondents preferred digital gift cards for their flexibility and ease of use, further enhancing their demand. Additionally, digital gift cards have been shown to drive repeat business and foster customer loyalty through personalized experiences.

Seasonal and Holiday Purchases Influencing the Gift Card Market

Seasonal and holiday shopping trends are major drivers of the gift card market. Consumers prefer gift cards for their flexibility and ease of use during festive seasons, boosting their demand. Retailers also capitalize on this trend through promotional campaigns, further fueling market growth.

Technological Advancements Transforming the Gift Card Industry

Innovations such as blockchain-based solutions and customizable, reloadable gift cards are revolutionizing the gift card market. These advancements enhance security, transparency, and personalization, making gift cards more appealing to both consumers and businesses.

Gift Card Market Restraints

Fraud Challenges in the Gift Card Market

Fraud remains a significant concern for the gift card market, with cybercriminals targeting both physical and digital gift cards. Techniques such as phishing, code hacking, and unauthorized use compromise consumer trust and lead to financial losses for businesses. The lack of advanced security measures in some gift card systems exacerbates this issue, hindering market growth.

Limited Awareness in Emerging Markets Restraining Market Expansion

In many developing regions, limited awareness about gift card benefits and functionality restricts market penetration. Consumers in these areas often prefer traditional gifting methods, and the absence of widespread digital infrastructure further impedes adoption. This creates a significant barrier to growth for gift card providers in untapped markets.

Lack of Standardization Hindering the Gift Card Industry

The absence of standardized regulations for gift card issuance and usage across regions creates challenges for market players. Differences in redemption policies, expiration terms, and fees confuse consumers and diminish their willingness to adopt gift cards. These inconsistencies also deter cross-border transactions, restricting the global scalability of gift card programs.

Impact of High Transaction Fees on Gift Card Usage

Transaction fees associated with gift cards, particularly reloadable or prepaid variants, can discourage consumers and businesses from using them. These fees, often perceived as hidden costs, reduce the overall value of gift cards, making them less appealing compared to other gifting or payment options.

Redemption Restrictions Limiting Market Growth

Redemption restrictions, such as limited acceptance at specific retailers or within certain timeframes, frustrate consumers and undermine their trust in gift cards. Such constraints reduce the flexibility that makes gift cards attractive, ultimately curbing their widespread adoption and market growth.

Gift Market Segmentation Analysis

By Material Merchant Type
The global gift card market is segmented by material merchant type into various categories based on the type of retailer or service provider. Restaurants and coffee shops dominate this segment as popular choices for both personal and corporate gifting due to their wide appeal and usability. Department stores, supermarkets/hypermarkets, and grocery stores cater to everyday consumer needs, making them a practical option for recipients. Specialized categories such as entertainments, salons/spa, book stores, and home décor stores appeal to niche markets. Gas stations gift cards provide convenience for daily commuting, while cards like Visa, MasterCard, and American Express gift cards offer flexibility for various purchases, further enhancing their demand.

By Merchant Type
This segment categorizes gift cards into different types based on their usability. Universal Accepted Open Loop gift cards, such as those issued by financial institutions (Visa, MasterCard), are highly versatile and widely used for a variety of transactions. Closed Loop Cards, which include restaurant closed loop, retail closed loop, and miscellaneous closed loop, are restricted to specific merchants, offering targeted usability for dining, shopping, or services. The rise of E-Gifting, driven by digital adoption, provides a convenient and instant option, appealing particularly to younger demographics and tech-savvy users.

By End User
Based on end-user segmentation, the market caters to businesses and individuals. Businesses are significant contributors, using gift cards for employee rewards, client appreciation, and promotional campaigns. On the other hand, individuals use gift cards primarily for gifting purposes on occasions such as birthdays, anniversaries, or holidays, making them a versatile and practical choice.

By Price Range
Gift cards are segmented by price range into high (above $400), medium ($200-$400), and low (below $200) categories. High-priced gift cards are predominantly used in corporate settings for high-value gifting or rewards. Medium-range gift cards are common for personal gifting and special occasions, while low-priced gift cards are popular for everyday gifting, promotions, and smaller incentives. This price range segmentation ensures accessibility across diverse consumer and corporate needs.

Segmentation of Global Gift Cards Market-

Global Gift Cards Market – By Material Merchant Type

• Restaurants
• Department Stores
• Grocery Stores
• Supermarkets/Hypermarkets
• Discount Stores
• Coffee Shops
• Entertainments
• Salons/Spa
• Book Stores
• Home Décor Stores
• Gas Stations
• Visa/Master Card/American Express Gift Cards
• Others

Global Gift Cards Market – By Merchant Type

• Universal Accepted Open Loop
• Restaurant Closed Loop
• Retail Closed Loop
• Miscellaneous Closed Loop
• E-Gifting

Global Gift Cards Market – By End User

• Business
• Individuals

Global Gift Cards Market – By Price Range

• High (Above 400 US$)
• Medium (200-400 US$)
• Low (0-200 US$)

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Regional Analysis

North America
North America dominates the global gift card market, driven by advanced digital payment infrastructures, high consumer spending power, and widespread adoption of e-commerce. The United States is the leading contributor in this region, with businesses heavily utilizing gift cards for employee rewards and customer loyalty programs. The rise of digital gift cards, particularly those integrated with popular e-commerce platforms and digital wallets, has further fueled market growth. Seasonal and holiday sales contribute significantly to revenue generation, making North America a mature and robust market for gift cards.

Europe
Europe represents a significant share of the global gift card market, with countries such as the United Kingdom, Germany, and France leading the region. The increasing adoption of e-commerce and digital payment solutions has bolstered the demand for digital gift cards. The corporate sector also plays a pivotal role, with businesses leveraging gift cards to enhance employee engagement and customer loyalty. Additionally, cultural traditions of gifting during holidays and special occasions further drive market growth in this region.

Asia-Pacific
The Asia-Pacific region is experiencing the fastest growth in the gift card market, fueled by increasing smartphone penetration, rising disposable incomes, and rapid digitalization in countries like China, India, and Japan. The growing popularity of e-commerce platforms and mobile payment systems has significantly boosted the adoption of digital gift cards. Furthermore, the expanding middle-class population and their preference for flexible gifting options are driving market growth. Localized promotional campaigns by retailers and global brands also contribute to the rising popularity of gift cards in this region.

Latin America
Latin America's gift card market is growing steadily, driven by urbanization and increasing adoption of digital payment systems. Countries like Brazil and Mexico are leading the market, with retailers and e-commerce platforms promoting the use of gift cards for various occasions. The region's younger population is particularly inclined toward digital gift cards due to their convenience and integration with online shopping platforms.

Middle East & Africa
The Middle East and Africa are emerging markets for gift cards, supported by increasing urbanization and the growing use of smartphones and digital payment systems. Countries such as the UAE and South Africa are key contributors, with rising e-commerce penetration and expanding retail sectors. Gift cards are also gaining traction as a tool for corporate rewards and promotions, although limited digital infrastructure in certain areas poses a challenge to market growth.

Top Companies –

• Apple, Inc.
• The Up Group
• Best Buy Company, Inc.
• Amazon, Inc.
• Starbucks Corporation
• Walmart Stores
• National Gift Card Corporation
• Edge Loyalty Systems Pty. Ltd.
• Target Corporation
• InComm
• QwickSilver Solutions
• Gyft
• Blackhawk Network holdings, Inc.
• Edenred Group.

Competitive Landscape

The global gift card market is highly competitive, with major players ranging from technology giants to specialized providers of loyalty and reward solutions. Companies are focusing on innovative product offerings, strategic collaborations, and technological advancements to maintain their market position and address growing consumer demands.

Key Players and Their Strategies
Prominent companies in the market include Apple, Inc. , Amazon, Inc. , Starbucks Corporation , Walmart Stores , Target Corporation , and Best Buy Company, Inc. These companies dominate due to their expansive retail networks, strong digital ecosystems, and widespread consumer trust. For instance, Apple and Amazon lead in digital gift cards by integrating them seamlessly with their ecosystems, enhancing user experience and driving sales. Similarly, Starbucks leverages its gift card programs to boost customer loyalty through innovative features such as reloadable cards linked to its rewards program.

Specialized Providers and Emerging Players
Specialized gift card companies, such as National Gift Card Corporation , Blackhawk Network Holdings, Inc. , Edenred Group , Edge Loyalty Systems Pty. Ltd. , and InComm , play a crucial role in the market by offering tailored solutions for corporate gifting, loyalty programs, and digital payment services. Companies like QwickSilver Solutions and Gyft are emerging as key players in the digital gift card space, focusing on e-gifting and mobile integration to cater to tech-savvy consumers.

Focus on Digital Transformation
The shift toward digital gift cards has intensified competition, with players developing advanced platforms for seamless gifting and redemption. InComm and Blackhawk Network are at the forefront of this trend, offering platforms that connect retailers with consumers and enable cross-platform gift card usage. Edge Loyalty Systems Pty. Ltd. focuses on corporate rewards and consumer engagement programs, enhancing its value proposition in the B2B segment.

Collaborations and Strategic Partnerships
Collaborations and partnerships remain key strategies for market expansion. For instance, companies like National Gift Card Corporation and Edenred Group partner with retailers and financial service providers to offer diversified and universally accepted gift card solutions. These partnerships enable businesses to tap into new customer segments and drive market growth.

Opportunities and Challenges
While the market presents significant opportunities through digital innovation and emerging markets, challenges such as fraud, regulatory inconsistencies, and lack of consumer awareness in certain regions persist. Companies are addressing these issues by adopting blockchain technology, enhancing security measures, and conducting awareness campaigns. With increasing consumer preference for convenience and personalization, the market is poised for robust growth driven by innovation and strategic initiatives.

Latest Developments:

• February 2024: Roblox, a global platform for immersive communication and engagement, partnered with Blackhawk Network (BHN) to offer digital gift cards in Austrian Euro (EUR), Belgian Euro (EUR), Swiss Franc (CHF), and Brazilian Real (BRL) on its gift card website, Roblox/giftcards. This initiative enables customers in these nations to purchase Roblox digital gift cards in their local currencies.
• December 2023: Pine Labs' Qwikcilver, a leading provider of gift card and stored value solutions in Southeast Asia and India, collaborated with Foodpanda, Asia's largest food and grocery delivery network (excluding China), to launch Foodpanda Gift Cards. These cards provide customers with a convenient way to redeem and complete purchases.
• September 2023: Razorpay, a domestic payments and banking platform, introduced the D2C GRO Suite at the D2C Sparkx 2023 event. This suite aims to address e-commerce lifecycle challenges, including enhancing purchase experiences, preventing fraud, and enabling seamless checkouts. Razorpay claims the tools will help over 2.5 lakh e-commerce and direct-to-consumer brands increase sales by 50%.
• July 2022: American Express, in partnership with the National Trust for Historic Preservation, announced grant funding of USD 1 million for 25 historic independent restaurants across the U.S. through the "Backing Historic Small Restaurants" program.
• June 2022: Blackhawk Network partnered with Restaurant to expand the distribution of the dining deal site's gift card program, including new eGift options available through GiftCardMall and other digital platforms via Blackhawk's distribution network.
• June 2022: Blackhawk Network collaborated with LibertyX to make cryptocurrency more accessible, allowing consumers to purchase Bitcoin through LibertyX accounts at select U.S. merchants, including Fresco y Más, Harveys Supermarkets, and Winn-Dixie.
• April 2022: Blackhawk Network teamed up with Bitski, an NFT and blockchain wallet leader, to launch the world's first NFT promotion gift card. The offering combines real-world and Web3 value, bridging traditional and digital economies.
• February 2022: Blackhawk Network expanded its partnership with Kroger to provide Mastercard® and Visa® bulk prepaid cards via its Velocity B2B SaaS-based gift card services. This supports Kroger's growth in the B2B gift card sector by offering businesses a robust tool for employee rewards and charitable efforts.
• April 2022: eCard Systems extended its partnership with Toast, enhancing restaurant businesses through customer insights, loyalty programs, and multi-channel marketing solutions designed to boost engagement and growth.
• August 2021: eCard Systems partnered with Paytronix to equip merchants with tools and data to optimize gift card programs. The collaboration aims to foster stronger customer connections and facilitate business expansion.
• April 2021: Thoughtworks launched a gift card initiative to help retailers leverage technology for improved customer engagement. The cards act as entry points into integrated payment and ordering systems, promoting customer loyalty and spending habits.
• July 2020: Apple Inc. introduced a universal gift card for hardware, software, and services, designed to meet diverse consumer needs. Branded as "for everything and everyone," it provides flexibility across Apple's product portfolio, reinforcing its position as an innovative market leader.

Reasons to Purchase this Report:

• Gain a comprehensive understanding of the market through qualitative and quantitative analyses, considering both economic and non-economic factors, with segmentation and sub-segmentation details provided in terms of market value (USD Billion).
• Identify regions and segments expected to experience the fastest growth or dominate the market, with a detailed analysis of geographic consumption patterns and the factors driving or hindering market performance in each region.
• Stay informed about the competitive environment, with rankings of major players, recent product and service launches, partnerships, business expansions, and acquisitions from the past five years.
• Access detailed profiles of major market players, including company overviews, insights, product benchmarking, and SWOT analysis, to understand competitive advantages and market positioning.
• Explore the present and forecasted market landscape, with insights into growth opportunities, market drivers, challenges, and constraints for both developed and emerging regions.
• Benefit from Porter's Five Forces analysis and Value Chain insights to evaluate various market perspectives and competitive dynamics.
• Understand the evolving market scenario, including potential growth opportunities and trends expected in the coming years.
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