The gift card market has witnessed significant growth in recent years. Gift cards have emerged as a popular substitute for physical gifts due to their convenience and flexibility. They are widely used on occasions including birthdays, anniversaries, weddings, and holidays. Gift cards can be redeemed for products and services across various industries including retail, entertainment, food & beverage, and travel. They eliminate the hassle associated with carrying or wrapping physical gifts. Merchants also benefit from gift cards as they tend to drive additional sales and footfall to retail stores.

The Global Gift Card Market is estimated to be valued at US$ 12.33 Bn in 2024 and is expected to exhibit a CAGR of 10.% over the forecast period 2024 to 2031.

Key Takeaways

Key players operating in the gift card market are Abbott Laboratories, F. Hoffmann-La Roche AG, Thermo Fisher Scientific Inc., Bio-Rad Laboratories, Inc., Danaher Corporation, Randox Laboratories Ltd., Siemens Healthineers, and BioMArieux SA. These players are focusing on new product launches and partnerships to expand their presence and offerings in the market.

The rising adoption of digital Gift Card Market Growth due to the pandemic is a major opportunity for market players. The shift towards cashless payments and online shopping has accelerated digital gift card usage. Moreover, technological advancements like mobile wallets and Near Field Communication (NFC) enabled gift cards are enhancing user convenience.

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Market drivers

The growth of the gift card market is driven by the rapid adoption of cashless payments among consumers and merchants. Gift cards offer a convenient checkout method and eliminate the need to carry physical cash or cards. The increasing smartphone penetration and online shopping trends have further boosted digital gift card usage. Moreover, gift cards promote brand visibility and drive repeat purchases, encouraging merchants to offer gift card programs. The shift towards online shopping amid the pandemic has augmented the demand for e-commerce gift cards. Rising disposable incomes are also providing an impetus to gift giving occasions and festivities worldwide.

Current Challenges in Gift Card Market

The Gift Card Market is facing multiple challenges which are hampering its growth. One of the major challenges is security issues related to gift cards. Incidents of gift card fraud, hacking, and data theft have increased in recent years which have eroded consumer trust in this payment method. Additionally, many people are unaware about the various terms and conditions associated with gift cards like expiry dates, activation fees, balance check fees etc. which leads to consumer dissatisfaction. Gift cards also face the challenge of being considered as an impersonal gifting option. Many customers still prefer traditional gifts over gift cards. Maintaining inventory and managing expiration dates of varying gift cards also poses operational challenges for retailers.

SWOT Analysis

Strength: Gift cards offer convenience to both givers and receivers. They allow giving gifts without worrying about size, brand or preferences of the recipient. Gift cards are also a popular gifting option for people living far away from each other.

Weakness: Gift cards face several security issues like fraud, hacking, data theft which are a major concern. Many customers also view gift cards as an impersonal gifting option.

Opportunity: Growing preference for cash-less payments and digital/mobile wallet-based gift cards present significant opportunities. Demand from emerging markets also offer scope for market expansion.

Threats: Strict regulations around gift card expiry dates and dormancy fees in some regions can negatively impact sales. Economic slowdowns may decrease consumer spending on gift cards.

Geographical regions with Major Market Share

Currently, North America accounts for the largest share in the global gift card market, both in terms of value and volume. U.S. is the major contributor to the North American gift market. Europe is the second largest region driven by countries like U.K, Germany, France and Italy. Asia Pacific region is expected to grow at the fastest pace with China, Japan and India leading the market. Middle East & Africa and Latin America are also emerging as lucrative regions but have lower market shares currently.

Fastest Growing Geographical Region

Asia Pacific region is poised to experience the fastest growth in gift card market during the forecast period. Rapid economic development, expanding middle class, growth of internet and mobile-based payments, developing retail infrastructure and increasing social events/celebrations where gift cards are commonly given, are some of the major factors driving the strong rise in gift card adoption and usage across Asia Pacific countries, particularly China, India and other Southeast Asian markets. Increasing digital/mobile payment penetration is further propelling the demand for digital/e-gift cards in Asia region.

*Note:
1.  Source: Coherent Market Insights, Public sources, Desk research
2. We have leveraged AI tools to mine information and compile it