Traditional gifts are being converted into digital gift card

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Gift card issuers are targeting almost all major festivals across the world, be it Easter, Eid, Diwali, or Hanukkah. The trend has become more prominent in the Asia-Pacific region in recent years, primarily due to the rising internet and smartphone penetration and a large young population. The growing demand from the millennials and Gen Z population for online gifting options such as e-gift cards are changing the entire dynamics of the gifting industry.

People are moving faster from the traditional gifting options such as greeting cards or edibles to digital gift cards. For instance, the rising demand for digital red envelope/packet (also known as, Yasui Qianas), a monetary gift, and a symbol of good luck in China. Since 2014, Tencent, a Chinese technology company offers digital red envelop in the country. Notably, in 2019, during the Chinese New Year, more than 800 million people exchanged digital red envelope through Tencent’s WeChat platform in China.

The trend is quite similar in Singapore where DBS bank launched DBS QR Ang Bao in 2019, a QR code-based gift card to create an alternative to the traditional red envelope. According to the DBS, the card is reloadable and can be accessed through DBS PayLah! mobile wallet. Paytm, one of the popular and leading mobile wallet providers in India offers ‘Lucky Lifafa’ an app-only gift card to match the Indian tradition of giving lifafa -an envelope with cash during marriages or any auspicious occasions.

Presently, the entire world is suffering from Covid-19 pandemic. All the big economies have imposed long-term lockdown and urging citizens to maintain social distancing to avoid further spread of the coronavirus. Therefore, the demand for online services starting from daily essentials to gift items is increasing across the world. It is expected that, the impact of this pandemic will last long, and it will also change the way people live. Hence, more dependency on digital platforms will also create significant growth opportunities for gift cards over the period.

The digital gift card market is expected to witness strong growth in the current market scenario

Globally, the demand for e-gift cards is showing strong growth. This is due to wide acceptance of the digital ecosystem which is leading consumers towards alternative gifting solutions such as e-gift cards. The trend is also supported by the current coronavirus pandemic. The fear of spreading the virus has forced individuals to become more cautious about what they touch, making them choose e-gifts over physical ones. Furthermore, the global economic slowdown due to Covid-19 is also changing consumer’s gifting patterns.

Individuals are keener towards savings and when it comes to gifting, practical, and utility-based gift items are gaining preference. Gift cards allow the receiver to spend the amount on what they need. For instance, individuals celebrating their birthdays or anniversaries amid the lockdown are more likely to receive e-gift cards/vouchers to be used, than the traditional cakes or flowers.

Moreover, rapid urbanization and subsequent growth of the e-commerce sector opened new horizons for the digital gift card market. E-commerce in-house gift cards are gaining popularity. Leading retailers offer a range of gift cards for different occasions.

The increasing participation on social media is also creating scope for digital gift cards over traditional gift items. Consumers are a click away to embrace a new culture or festival and with increasing disposable income, young consumers do not hesitate to go for the hassle-free e-gifting option.

The trend is also allowing social media companies to offer e-gift cards on their platform. For instance, Instagram allows corporates to offer gift cards through a partnership with Instagram associated gift card issuers such as Gift UP!, Kabbage, and Toast. An Instagram user can purchase these gift cards directly from the Corporate’s Instagram profile. Therefore, cross border gifting has become much easier through social media, and it is also cementing the digital gift cards market.

In corporate gifting sector, digital gift cards have become an absolute alternative to the traditional gift items in the employee incentives segment. Besides gifting to employees on different occasions, most of the corporate houses also run rewards and recognition programs, and as a suitable gifting option companies are giving preference to e-gift cards. Given the current market scenario when most of the governments across the world suggested corporates to allow their employees to work from home, just to prevent and slow down the coronavirus transmission, e-gift cards are emerging as one of the most preferred gifting choices among the corporates. Customizability, easy availability, and offering wider choices for employees are the key factors giving an edge to digital gift cards over traditional gift options.

To know more and gain a deeper understanding of digital gift card dynamics, click here.