Gift Cards Market Report
Gift Cards Market by Type (Open Loop and Closed Loop), Sales Channel (Instore and Online), End-use (Retail and Corporate), and Regional Analysis (North America, Europe, Asia-Pacific, and LAMEA): Global Opportunity Analysis and Industry Forecast, 2021–2028
pandemic has shown to have an enormous impact
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Impact of covid-19 on Gift Cards Market
Global Gift Cards Market Insight
The global gift cards market size is predicted to garner a revenue of $1,396.01 billion in the 2021–2028 timeframe, growing from $437.78 billion in 2020, at a healthy CAGR of 15.4%.
Increase in the demand for online shopping with the increased use of smartphones might drive the global gift cards market growth.
However, the lack of security for gift cards might restrain the market growth during the forecast period.
According to the regional analysis of the market, the Asia-Pacific gift cards market share is anticipated to grow at a CAGR of 16.0%, by generating a revenue of $301.54 billion during the review period.
Gift Cards Market Overview
A merchant or bank typically issues gift cards, which are also known as gift certificates, gift tokens, prepaid cards, or gift vouchers. Furthermore, gift cards are used as a marketing tactic to promote businesses, attract new consumers, raise brand awareness, decrease fraud, and boost sales by retailers and ecommerce business. Moreover, a gift card can be used as a substitute for cash at a specific store or business store for purchases of goods or services. They are sometimes referred to as cash cards since they are issued by merchants and marketers as part of a marketing campaign to persuade the receiver to come in or return to the store.
Covid-19 Impact on Gift Cards Market
In March 2020, the World Health Organization declared COVID-19 as a pandemic, which resulted in restrictions on travel and disturbances in financial markets, as well as negatively impacted supply chains and production levels. The coronavirus pandemic has unleashed a series of unprecedented events affecting every industry. The gift card market has been altered as a result of the COVID-19 outbreak. The gap between physical gift card penetration and virtual gift card sales is decreasing. As a result of this, the focus of innovation has shifted to digital cards (e-gifting), sometimes known as e-cards. Physical gift card sales were hindered by store closures across the country due to the COVID-19 outbreak. Physical gift cards continue to occupy a significant share of the entire market, which has hampered the industry's expansion.
Increase in the Usage of Smart Phones is Anticipated to Drive the Market Growth
The rise in smart phone penetration is likely to increase the gift card market by providing customers with more flexible and convenient payment options. One of the most popular solutions, for example, is Gyft, which is available on iPhone and Android. The software allows users to load their gift cards and spend them whenever they go shopping. In recent years, there has been an increase in the demand for improved products and technology improvements linked with payment solutions. This expansion is fueled by unmet needs and a spike in demand for improved transactional solutions. The gift card market is shifting from plastic to digital gift cards as the use of mobile phones and internet penetration grows globally. The market is predicted to rise as a result of an increase in the number of such integrations.
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Lack of Security for Gift Cards Might Restrict the Market Growth
The gift card industry faces a number of security challenges, including the risk of being hacked by hackers and criminals, which is a major roadblock to expansion. For example, Distil Networks, the global leader in bot mitigation, recently discovered GiftGhostBot, a bot that attacked approximately 1,000 websites in search of gift cards, resulting in a balance breach. It has become a model of expansion under difficulty in the global gift card industry. Furthermore, in their rush to make smartphone gift card implementation as simple and inexpensive as possible, merchants such as Starbucks and Target have overlooked security vulnerabilities that allow any customer to use money placed on another shopper's gift card.
Technological Advancements are Expected to Increase the Opportunities of Commercial Market Growth
Due to increasing economic pressures, several company sectors are getting more inventive in their approaches to expand their operations. Gift cards are likely to be used as a promotional tool in this case. Gift cards are seen as a vital source of quick revenue flow for businesses such as restaurants and cafeterias. During the COVID-19 pandemic, the significance of gift cards has fundamentally changed for these industries. Consistent consumer engagement with shopping, owing to rapid expansion in digital commerce, as well as an increase in the number of new technologies that enable customers with creative and seamless payment choices, are the primary growth factors of the market. Furthermore, increasing technological advances in gift cards assist organizations to increase sales by making their product offers more unique and appealing, hence propelling the gift cards market forward.
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Gift Cards Market
Based on type, the gift cards market has been divided into Open Loop and closed loop of which the Open Loop sub-segment is projected to generate the maximum revenue and closed loop sub-segment is anticipated to be the fastest growing during the forecast period.
Source: Research Dive Analysis
The open loop sub-segment is predicted to have a dominating market share in the global market and register a revenue of $724.93 billion during the forecast period. During the projected period, the open loop gift cards category is expected to increase rapidly. Open loop gift cards have gained popularity since they allow recipients to shop at different locations. Increased security is another important reason driving the expansion of the open loop gift card industry. Because these cards can be used at multiple retailers, they can be used even if one of them goes out of business. As a result, the gift card does not become obsolete. Given these considerations, the segment's expansion is likely to continue in the next years.
Gift Cards Market
By Sales Channel
Based on sales channel, the market has been divided into instore and Online sub-segments of which the Online sales channel sub-segment is projected to grow at a faster CAGR and register maximum revenue during the forecast period.
Source: Research Dive Analysis
The online sales channel sub-segment is anticipated to have the fastest market growth during the forecast period. It is predicted that the market shall generate a revenue of $706.05 billion by 2028, growing from $185.5 billion in 2020, with a CAGR of 17.9%. Online gift cards (sometimes given as free gift cards on larger purchases) are frequently used in development plans to promote businesses, raise brand recognition, reduce fraud, and attract new clients, among other things. As a result, these cards are used in a wide range of industries, including retail, food and beverage, consumer electronics, hospitality, and so on.
Gift Cards Market
By End Use
Based on end-use, gift cards market is bifurcated into Retail and corporate. Among these, Retail gift cards market sub-segment is anticipated to hold the maximum share of the global market revenue while corporate gift cards market is expected to be the fastest growing.
Source: Research Dive Analysis
The retail sub-segment is predicted to have a dominating market share in the global market and register a revenue of $876.72 billion during the forecast period. Supermarkets and food items, pharmaceutics and medications, hypermarkets, computers, and other communication devices are all part of the retail sector. Gift card sales in the country are expected to grow in the future due to the country's growing retail industry. High gift card acceptance is likely to be aided by the increasing penetration of supermarkets/hypermarkets and other food and restaurant chains.
Gift Cards Market
The gift cards market was inspected across North America, Europe, Asia-Pacific, and LAMEA.
Source: Research Dive Analysis
The Market for Gift Cards in North America to Hold the Highest Revenue during the Forecast Period
North America is anticipated to be the fastest growing market during the forecast time period and reach $604.47 billion by 2028, with a CAGR of 15.0%. North America was one of the first regions to use gift cards widely. Gift cards are the most popular sort of Christmas present in the United States, which is contributing to the country's growing gift card market. Furthermore, in recent years, demand for gift cards has seen an extraordinary increase during holidays such as Christmas and birthdays, a factor that has aided market growth. Other popular occasions for which consumers are increasingly purchasing gift cards include thank you gifts, graduation, baby showers, and Mother's Day. Amazon, iTunes, Walmart, and Giant Eagle are just a few of the major stores in the region that sell gift cards.
Competitive Scenario in the Global Gift Cards Market
Product launches and mergers & acquisitions are common strategies followed by major market players.
Source: Research Dive Analysis
Some of the leading gift cards market players are Amazon.com, Inc., American Express Company, Apple Inc., Best Buy Company, Inc., Blackhawk Network Holdings, Inc., InComm Payments, Qwikcilver Solutions Pvt Ltd., Target Corporation, Starbucks Corporation, and Walmart Inc.
Porter’s Five Forces Analysis for the Global Gift Cards Market:
- Bargaining Power of Suppliers: Gift cards market contains huge concentration of distributors & suppliers and therefore, the distributors & suppliers’ control is predicted to be reasonable, resulting in moderate bargaining power of dealers.
Thus, the bargaining power of the suppliers is considered to be moderate.
- Bargaining Power of Buyers: Buyers might have great bargaining power, significantly because of high players functioning in the gift cards market.
Therefore, the bargaining power of the buyer is high.
- Threat of New Entrants: Companies entering the gift cards market are adopting technological innovations and e-gifting to attract clients. Therefore,
the threat of the new entrants is moderate.
- Threat of Substitutes: There are many alternate products for gift cards depending on the company.
Thus, the threat of substitutes is moderate.
- Competitive Rivalry in the Market: The competitive rivalry among industry leaders is rather intense, especially between the global players including Starbucks, Target, and Amazon Inc. These companies are strengthening their footprint worldwide.
Therefore, competitive rivalry in the market is high.
Historical Market Estimations
Base Year for Market Estimation
Forecast Timeline for Market Projection
North America, Europe, Asia-Pacific, LAMEA
Segmentation by Type
Segmentation by Sales Channel
Segmentation by End-Use
Key Companies Profiled
Q1. What is the size of the global gift cards market?
A. The size of the global gift cards market was over $437.78 billion in 2020 and is projected to reach $1,396.01 billion by 2028.
Q2. Which are the major companies in the gift cards market?
A. Amazon.com, Inc., American Express Company, and Apple Inc. are some of the key players in the global gift cards market.
Q3. Which region, among others, possesses greater investment opportunities in the near future?
A. The Asia-Pacific region possesses great investment opportunities for investors to witness the most promising growth in the future.
Q4. What will be the growth rate of the Asia-Pacific gift cards market?
A. Asia-Pacific gift cards market is anticipated to grow at 16.0% CAGR during the forecast period.
Q5. What are the strategies opted by the leading players in this market?
A. Technological development and strategic partnerships are the key strategies opted by the operating companies in this market.
Q6. What are the most popular gift cards?
A. Amazon.com, Apple Inc. and Walmart Inc are the most popular gift cards.
Q7. Why do companies like selling gift cards?
A. Gift cards are likely to be used as a promotional tool and are seen as a vital source of quick revenue flow for businesses such as restaurants and cafeterias.
Q8. Do banks sell gift cards?
A. Not all banks offer them, but those that do usually offer them at a discount to existing customers.
Q9. What is the benefit of selling gift cards?
A. Gift Cards Improve Cash Flow by Providing Instant Profit: The first and most important benefit that a firm may obtain from selling gift cards is immediate profit. When they sell a gift card, they receive the money from the consumer right away.
Q10. Can gift cards pay bills?
A. Bill payment is possible with prepaid debit cards and network-branded gift cards. Acceptance of prepaid cards is usually determined by the card processor's brand.
Q11. Can I use gift cards to pay off credit cards?
A. Yes, gift cards can be used to pay off credit cards.
1.2.Real time insights and validation
1.4.Assumptions and forecast parameters
2.2.By type trends
2.3.By sales channel trends
2.4.By end-use trends
3.1.Market segmentation & definitions
3.2.1.Top investment pockets
3.2.2.Top winning strategies
3.3.Porter’s five forces analysis
3.3.1.Bargaining power of consumers
3.3.2.Bargaining power of suppliers
3.3.3.Threat of new entrants
3.3.4.Threat of substitutes
3.3.5.Competitive rivalry in the market
3.8.Market value chain analysis
3.8.1.Stress point analysis
3.8.2.Raw material analysis
188.8.131.52.Raw material suppliers
4.Gift Cards Market, by Type
4.1.1.Market size and forecast, by region, 2020-2028
4.1.2.Comparative market share analysis, 2020 & 2028
4.2.1.Market size and forecast, by region, 2020-2028
4.2.2.Comparative market share analysis, 2020 & 2028
5.Gift Cards Market, by Sales Channel
5.1.1.Market size and forecast, by region, 2020-2028
5.1.2.Comparative market share analysis, 2020 & 2028
5.2.1.Market size and forecast, by region, 2020-2028
5.2.2.Comparative market share analysis, 2020 & 2028
6.Gift Cards Market, by End-use
6.1.1.Market size and forecast, by region, 2020-2028
6.1.2.Comparative market share analysis, 2020 & 2028
6.2.1.Market size and forecast, by region, 2020-2028
6.2.2.Comparative market share analysis, 2020 & 2028
7.Gift Cards Market, by Region
7.1.1.Market size and forecast, by type, 2020-2028
7.1.2.Market size and forecast, by sales channel, 2020-2028
7.1.3.Market size and forecast, by end-use, 2020-2028
7.1.4.Market size and forecast, by country, 2020-2028
7.1.5.Comparative market share analysis, 2020 & 2028
184.108.40.206.Market size and forecast, by type, 2020-2028
220.127.116.11.Market size and forecast, by sales channel, 2020-2028
18.104.22.168.Market size and forecast, by end-use, 2020-2028
22.214.171.124.Market size and forecast, by type, 2020-2028
126.96.36.199.Market size and forecast, by sales channel, 2020-2028
188.8.131.52.Market size and forecast, by end-use, 2020-2028
184.108.40.206.Market size and forecast, by type, 2020-2028
220.127.116.11.Market size and forecast, by sales channel, 2020-2028
18.104.22.168.Market size and forecast, by end-use, 2020-2028
7.2.1.Market size and forecast, by type, 2020-2028
7.2.2.Market size and forecast, by sales channel, 2020-2028
7.2.3.Market size and forecast, by end-use, 2020-2028
7.2.4.Market size and forecast, by country, 2020-2028
7.2.5.Comparative market share analysis, 2020 & 2028
22.214.171.124.Market size and forecast, by type, 2020-2028
126.96.36.199.Market size and forecast, by sales channel, 2020-2028
188.8.131.52.Market size and forecast, by end-use, 2020-2028
184.108.40.206.Market size and forecast, by type, 2020-2028
220.127.116.11.Market size and forecast, by sales channel, 2020-2028
18.104.22.168.Market size and forecast, by end-use, 2020-2028
22.214.171.124.Market size and forecast, by type, 2020-2028
126.96.36.199.Market size and forecast, by sales channel, 2020-2028
188.8.131.52.Market size and forecast, by end-use, 2020-2028
184.108.40.206.Market size and forecast, by type, 2020-2028
220.127.116.11.Market size and forecast, by sales channel, 2020-2028
18.104.22.168.Market size and forecast, by end-use, 2020-2028
22.214.171.124.Market size and forecast, by type, 2020-2028
126.96.36.199.Market size and forecast, by sales channel, 2020-2028
188.8.131.52.Market size and forecast, by end-use, 2020-2028
7.2.11.Rest of Europe
184.108.40.206.Market size and forecast, by type, 2020-2028
220.127.116.11.Market size and forecast, by sales channel, 2020-2028
18.104.22.168.Market size and forecast, by end-use, 2020-2028
7.3.1.Market size and forecast, by type, 2020-2028
7.3.2.Market size and forecast, by sales channel, 2020-2028
7.3.3.Market size and forecast, by end-use, 2020-2028
7.3.4.Market size and forecast, by country, 2020-2028
7.3.5.Comparative market share analysis, 2020 & 2028
22.214.171.124.Market size and forecast, by type, 2020-2028
126.96.36.199.Market size and forecast, by sales channel, 2020-2028
188.8.131.52.Market size and forecast, by end-use, 2020-2028
184.108.40.206.Market size and forecast, by type, 2020-2028
220.127.116.11.Market size and forecast, by sales channel, 2020-2028
18.104.22.168.Market size and forecast, by end-use, 2020-2028
22.214.171.124.Market size and forecast, by type, 2020-2028
126.96.36.199.Market size and forecast, by sales channel, 2020-2028
188.8.131.52.Market size and forecast, by end-use, 2020-2028
184.108.40.206.Market size and forecast, by type, 2020-2028
220.127.116.11.Market size and forecast, by sales channel, 2020-2028
18.104.22.168.Market size and forecast, by end-use, 2020-2028
22.214.171.124.Market size and forecast, by type, 2020-2028
126.96.36.199.Market size and forecast, by sales channel, 2020-2028
188.8.131.52.Market size and forecast, by end-use, 2020-2028
7.3.11.Rest of Asia Pacific
184.108.40.206.Market size and forecast, by type, 2020-2028
220.127.116.11.Market size and forecast, by sales channel, 2020-2028
18.104.22.168.Market size and forecast, by end-use, 2020-2028
7.4.1.Market size and forecast, by type, 2020-2028
7.4.2.Market size and forecast, by sales channel, 2020-2028
7.4.3.Market size and forecast, by end-use, 2020-2028
7.4.4.Market size and forecast, by country, 2020-2028
7.4.5.Comparative market share analysis, 2020 & 2028
22.214.171.124.Market size and forecast, by type, 2020-2028
126.96.36.199.Market size and forecast, by sales channel, 2020-2028
188.8.131.52.Market size and forecast, by end-use, 2020-2028
184.108.40.206.Market size and forecast, by type, 2020-2028
220.127.116.11.Market size and forecast, by sales channel, 2020-2028
18.104.22.168.Market size and forecast, by end-use, 2020-2028
22.214.171.124.Market size and forecast, by type, 2020-2028
126.96.36.199.Market size and forecast, by sales channel, 2020-2028
188.8.131.52.Market size and forecast, by end-use, 2020-2028
8.1.4.Recent strategic moves & developments
8.2.American Express Company
8.2.4.Recent strategic moves & developments
8.3.4.Recent strategic moves & developments
8.4.Best Buy Company, Inc.
8.4.4.Recent strategic moves & developments
8.5.Blackhawk Network Holdings, Inc.
8.5.4.Recent strategic moves & developments
8.6.4.Recent strategic moves & developments
8.7.Qwikcilver Solutions Pvt Ltd.
8.7.4.Recent strategic moves & developments
8.8.4.Recent strategic moves & developments
8.9.4.Recent strategic moves & developments
8.10.4.Recent strategic moves & developments
Gift cards are prepaid debit cards filled with cashless money that can be used to purchase any item linked with the company or brand providing the card. They can be loaded with funds for future use within a stipulated time before its expiry. This form of payment is usually done to purchase items at retail stores, restaurants, gas station, wholesale stores, and many more. It is often used as a marketing strategy by companies to maintain or generate customer engagement and increase brand awareness.
Forecast Analysis of the Global Gift Cards Market
The global gift cards market is anticipated to experience an exponential growth during the forecast period (2021-2028), owing to the increased use of smart phones among people coupled with efficiency in payment options concerned with the gift cards. In addition, rising internet penetration around the globe and surging demand for enhanced transactional services are further expected to drive the growth of the market during the forecast period. But prevalence of security breaches by hackers and criminals is expected to restrain the growth of the market during the forecast period. However, persistent technological advancements for seamless payment solutions for customers and increasing prevalence of gift vouchers among restaurants, cafeterias, and retail stores are expected to create massive opportunities for the growth of the market during the forecast period.
According to the report published by Research Dive, the global gift cards market is expected to generate a revenue of $1,396.01 billion by 2028, growing rapidly at a CAGR of 15.4% during the forecast period. The major players of the market include Amazon.com Inc., American Express Company, Walmart Inc., Best Buy Company Inc., Apple Inc., Qwickcilver Solutions Pvt. Ltd., Target Corporation, Starbucks Corporation, Blackhawk Network Holdings, Inc., InComm Payments, and many more.
The key companies operating in the industry are adopting various growth strategies & business tactics such as partnerships, collaborations, mergers & acquisitions, and launches to maintain a robust position in the overall market, which is subsequently helping the global gift cards market to grow expeditiously.
For instance, in November 2020, Blackhawk Network, a dominant global payments provider acquired National Gift Card, one of the biggest North American prepaid tech and card companies, in order to further maximize Blackhawk’s incentive solutions and bolster their end-to-end program management solutions.
In November 2020, InComm Payments, a dominant global payments technology company, acquired Tado Cartoes, one of Brazil’s main closed-loop gift card processors, in order to accelerate IncComm Payments’ prevalence in the country by tapping the processing and distribution of closed-loop gift cards.
In June 2021, LIC Cards Services Ltd. (LIC CSL), a wholly owned subsidiary of LIC of India, launched a prepaid gift card called “Shagun”, in collaboration with IDBI Bank, one of India’s largest commercial banks. The “Shagun” gift card offers seamless loading of funds from Rs 500 to Rs 10,000, facilitating multiple transactions with a validity of three years.
Most Profitable Region
The North America region is expected to have the highest market share, and hence dominate the market during the forecast period. The North America gift cards market is anticipated to generate a revenue of $604.47 billion, during the forecast period. Extensive use of gift cards during Christmas, birthdays, graduation day, Mother’s Day, Thanksgivings, baby showers, and so on is expected to bolster the growth of the market in this region.
COVID-19 Impact on the Market
The outbreak of COVID-19 has had an adverse impact on the growth of the global gift cards market, owing to the lockdowns that were prevalent in various countries across the globe. There has been a gradual shift from physical gift cards to virtual gift cards during the pandemic but the physical gifts cards contributed to a significant share, whose prevalence consequently decreased due to store closures around the globe during lockdowns. Thus, the pandemic has had a negative impact on the growth of the global gift cards market.
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