Australian gift card market expected to reach US$ 5.8 billion by 2023

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The gift card industry in Australia is expected to witness the upward trend over the forecast period. The digital gift cards will continue to grow in the years ahead led by tech-savvy Gen Z and millennial consumer segments, booming ecommerce, corporate gifting, and favourable regulatory changes to the gift card sector in favor of consumers. The recent entry of PayPal is also another indication of growth potential in the digital gift card market.

The gift card sector in Australia is fairly mature. It has evolved from paper certificates, to plastic and now moving into the digital and tech arena. According to PayNXT360, gift card market in Australia is expected to cross US$4.5 billion by end of 2019. It is expected to record a CAGR of over 6% over the forecast period to reach US$ 5.8 billion by 2023. With about over 50 million gift cards sold every year, it is considered to be an increasingly growing segment of payment mechanism.

Plastic gift cards are still a mainstream avenue for gifting. However, there is an increasing demand for digital, or e-gift cards considering the increase in the adoption of new technology amongst the millennials and the surge in the ecommerce transactions, which is rising at a steady rate.

The growth in users of both the physical and digital gift card continues to grow year on year. However, the shift of growth now is seeing the digital card grow at a substantially faster rate. This is primarily driven by buyer convenience, increased adoption for self-use, and lower distribution costs, benefiting businesses directly and potentially reducing the need for fees for consumers.

Another consideration in the increasing demand for the digital gift card and e-vouchers is corporate gifting. This market segment is primed for growth as the corporate gifting has been part of employee rewards and recognition programs across many corporations in Australia.

Alongside corporate gifting, environmental awareness and eco-conscious consumers are also playing a vital role in outmoding of plastic gift cards. Over 43% of urban Australians, prefer to purchase products that are marketed in environmentally friendly packaging and manufactured using sustainable techniques of sourcing.

To tap this flourishing business of gift card sales, many top Australian retailers have started selling gift cards and e-vouchers. Likewise, there are several online gift card marketplaces such as Prezzee and Wright Express owned giftvouchers.com operating in this segment. Market entry of PayPal last year in the digital gifting space has intensified competition in the gift card industry. The payment giant already has over 7 million active account holders in the country and is leveraging that to increase market penetration.

The recent regulatory changes to gift cards industry in Australia, requiring a minimum three year expiry period for gift cards sold, were also encouraging the adoption of digital consumption as consumers became more accustomed to longer expiry times on gift cards and e-vouchers.

To know more and gain deeper understanding of gift card industry in Australia, click here.