The gift card market offers a variety of gift products and services such as prepaid cards, e-gift cards, physical gift cards, and more. Gift cards are increasingly being used as a substitute for cash gifts on occasions like birthdays, anniversaries, holidays, and other special events. Gift cards can be used at department stores, restaurants, online stores, gas stations, and other retailers. They allow people to purchase items or services from a chosen merchant without having to carry around cash or deal with change. The global gift card market is estimated to be valued at US$ 10.70 Bn in 2023 and is expected to exhibit a CAGR of 21.% over the forecast period 2023 to 2030, as highlighted in a new report published by Coherent Market Insights.
Market Dynamics:
One of the major drivers for the growth of the gift card market is the rising acceptance of digital prepaid cards. Many consumers nowadays prefer digital gift cards over physical cards due to their convenience. Digital gift cards can be purchased and delivered instantly via email or text message. They do not require printing, activation, or shipping. Consumers can use digital gift cards easily on both computers and mobile devices. Retailers are also embracing digital gift cards as they help in reducing costs associated with producing, shipping, and handling physical cards. With growing smartphone and internet penetration, digital gift cards are gaining immense popularity among millennials. Their ease of use and instant delivery are fueling their demand worldwide and driving significant growth in the overall gift card market.
Another driver for the market growth is the inherent advantages of gift cards over cash gifts. Gift cards provide recipients flexibility and choice in spending. They eliminate the risk of carrying around cash. Unused balances can also be spent later. These benefits are increasing gift card acceptance on various occasions. Their promotions as an affordable gifting option are further accentuating market expansion.
Segment Analysis
The gift card market can be segmented into the physical gift card segment and the e-gift card segment. The physical gift card segment currently dominates the market, holding around 70% share. However, the e-gift card segment is expected to witness faster growth during the forecast period due to increasing adoption of digital payment methods and convenience offered by e-gift cards.
PEST Analysis
Political: Gift card regulations regarding expiration dates, dormancy fees, and redemption policies differ across countries and states. These regulations can impact the sales and operations of gift card companies.
Economic: Growth in the retail and e-commerce industries will boost the demand for gift cards. However, economic slowdowns may negatively affect the consumer spending on gift cards.
Social: Changing shopping patterns of consumers, especially preference for online shopping among millennials and generation Z, is increasing the popularity of digital gift cards.
Technological: Adoption of blockchain, AI, and mobile wallets is helping companies offer innovative gift card programs and secure redemption processes. Advanced technologies are also enhancing the digital gift card experience.
Key Takeaways
Global Gift Card Market Demand is expected to witness high growth during the forecast period supported by expanding retail industry, digital innovations, and evolving consumer preferences. Regionally, North America dominated the global market owing to high adoption of gift cards as a payment and gifting option. However, Asia Pacific is anticipated to emerge as the fastest growing regional market with countries like China and India generating robust demand.
Key players operating in the gift card market include Walmart Inc, American Express, Target Brands, Inc., Best Buy, Apple Inc., Sephora USA, Inc., TransGate Solutions, Pine Labs Private Limited, Alltimeprint.com, and Huuray A/S among others. Walmart continues to have a strong presence in the physical gift card segment while Apple and PayPal have established themselves as leaders in the digital gift card space. Innovation is seen as a key focus area for players to attract more customers and merchants.
The global gift card market is expected to witness high growth during the forecast period. Regional analysis North America dominated the global market owing to high adoption of gift cards as a payment and gifting option. However, Asia Pacific is anticipated to emerge as the fastest growing regional market with countries like China and India generating robust demand. Regional analysis comprises Regional analysis related content.
Key players Key players operating in the gift card market are Walmart Inc, American Express, Target Brands, Inc., Best Buy, Apple Inc., Sephora USA, Inc., TransGate Solutions, Pine Labs Private Limited, Alltimeprint.com, and Huuray A/S among others. Walmart continues to have a strong presence in the physical gift card segment while Apple and PayPal have established themselves as leaders in the digital gift card space. Innovation is seen as a key focus area for players to attract more customers and merchants.
*Note:
1. Source: Coherent Market Insights, Public sources, Desk research
2. We have leveraged AI tools to mine information and compile it