Gift cards are prepaid payment cards that can be used for purchasing goods and services from a particular retailer, restaurant, online store or merchant. Gift cards are gaining popularity as convenient gifting options for various occasions like birthdays, anniversaries, holidays or promotions. They offer flexibility to recipients to redeem the value against the items of their choice from the merchant or brand. Gift cards eliminate the hassle of returning unwanted gifts and are considered thoughtful alternatives. Products associated with gift cards include physical plastic/paper gift cards, e-gift cards, digital gift cards that can be delivered via email or messaging apps. The global gift card market is estimated to be valued at US$ 10.70 Bn or Mn 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 key drivers for the growth of gift card market is the rising adoption of gift cards as a convenient alternative for gifting. In the age of digital payments and e-commerce, gift cards are gaining popularity as they offer convenience to both givers and recipients. Gift cards can be purchased online instantly and delivered electronically to the recipient's phone, email or messaging accounts, eliminating the wait for delivery. This makes gift cards an attractive gifting option. The penetration of smartphones and growing preference for digital payments have further propelled the demand for digital and e-gift cards. Retailers and merchants are promoting gift cards as they increase customer spending and visit frequency. The gift card market growth is thus fueled by the partnerships between gift card providers and merchant networks.

SWOT Analysis
Strength: Gift card market provides an easy and convenient way for gifting and spending for users. It enables users to send gifts digitally without having to physically wrap or deliver gifts. Many merchants also accept gift cards as partial payments which provides added flexibility to users. Gift cards also help merchants increase sales as cards eventually get redeemed for additional purchases beyond the gift card value.

Weakness: Gift cards once purchased cannot be returned like physical gifts which limits flexibility for both givers and receivers. Receivers may not find value in the merchant or products offered by the gift card. There is also a risk of lost, stolen or forgotten gift cards leading to expired balances.

Opportunity: Growing preference for contactless payments and digital gifts among young consumers during the pandemic has accelerated growth of gift card market. Developing innovative gift card programs and partnerships between merchants can help drive awareness, usage and repeat purchases. Emergence of gift card exchange platforms also provides opportunity for liquidating unwanted or partially used cards.

Threats: Stricter regulations around expiration policies and service fees on gift cards pose operational challenge. Rising competition from digital wallets, loyalty programs and flash sales sites reduces the attractiveness of gifts cards for some consumers and merchants. Proliferation of scam websites and fraudulent secondary market also poses reputational risk.


Key Takeaways

The Global Gift Card Market is expected to witness high growth over the forecast period supported by increasing adoption of cashless payments and growing preference for digital gifting especially among young consumers. The U.S. currently dominates the market attributed to strong gifting culture and mature retail infrastrcture. However, Asia Pacific region is projected to be the fastest growing market led by countries like China, India and Southeast Asia driven by rising disposable incomes, expanding e-commerce sales and availability of diverse brands and use cases on gift cards.

Regional analysis
Asia Pacific region is projected to witness the fastest growth in the gift card market over the next decade. Countries like China, India and Southeast Asian nations are expected to spearhead growth supported by factors such as rising middle class population, growing online shopping trends and availability of diverse global and local brands accepting gift cards. E-commerce giants like Alibaba, JD.com and Rakuten along with digital payment leaders Paytm, PayPal and GoPay have established prominent gift card programs and partnerships in the region driving adoption.

Key players
Key players operating in the gift card market include Walmart Inc., American Express, Target Brands, Inc., Best Buy, Starbucks Coffee Company, PayPal Holdings, Inc., Apple Inc., Sephora USA, Inc., Amazon.com, Inc. among others. Walmart offers Walmart eGift cards that can be used at Walmart stores or on Walmart.com. American Express gift cards are accepted at millions of locations worldwide. Target gift cards can be used for purchases.

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