Global digital gift card market size expected to reach USD 160 billion by 2020

Posted by paynxt360 on November 22nd, 2016

Digital gift cards have been posting strong growth in recent years, a trend which is expected to continue over the forecast period. This is primarily driven by shift in terms of consumer buying behavior. Digital gifting segment accounted for USD 62 billion sales during last four quarters ending Q3 2016,indicating y-o-y growth of 26%. Consumers have been steadily moving towards digital gift cards from plastic / paper options. Retailers have also acknowledged this trend as sales through digital gift cards has significantly risen in past three years. Around 65% consumers in the market now purchase digital gift cards without any promotions, which is 33% higher than last year figures.

Global gift cards market size are fast gaining prominence across both developed and developing markets as internet and mobile penetration rates increase across the world. The category is being driven largely by millennials as it fits their online and mobile-centric lifestyle. This consumer group is showing preference for digital gift cards as it helps them in accessing online content such as digital music, e-books, and games securely and helps in conducting transactions faster and in a more convenient manner than plastic gift cards. As digital gift cards are a low cost model, the market is seeing entry of many new start-ups and non-financial players, who are eager to be part of this high growth potential market.

United Kingdom is one of the prominent markets in Europe for digital gift card segment. It has seen recorded growth rate of 10.2% in 2016. Digital gift card accounts for 16% of entire gift card and vouchers segment in the country. In terms of consumer segments, both B2B and B2C segmentsare driving growth of the segment. More importantly, the growth is broad based with participation across age groups and company size. It can be expected that the market will see a steady shift from paper to digital gifting options and new players will continue to enter the market stimulating healthy competition in UK.

Among emerging markets, India holds one of the strongest positions (in terms of future potential) in digital gift card industry. Gift card segment in India has scaled to USD 1 billion per annum in recent years. Qwikcilver holds monopoly in this segment with almost 90% market share. The brand has registered a growth rate of 300% in past 4 years and currently manages 50 million gift cards in India. The company is funded by Helion Ventures, Accel Partners and Amazon and has tie ups with majority retailers and enterprises that fuels extensive customer engagement.