The Malaysian Gift Cards Market – an Outlook

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Strong growth of the Malaysian gift card market attracting global players: Presently, the traditional gifting industry in the country is estimated to be at more than US$1 trillion. This growing nature of the gifting market in the country is primarily driven by the several festivals celebrated in Malaysia. Consequently, presenting a significant opportunity for e-gifting players in the country.

Gift card market in 2020 was driven a wide range of factors, which supported growth across retail and corporate segments. The primary factors included growth of ecommerce, increased adoption to incentivize employees working remotely, digital gifting, and initiatives undertaken by government, hospitality, and travel industries to revive growth. Though the gift card market was impacted due to COVID-19, the market is expected to bounce back in the coming quarters, especially in H1 2021.

Gift card industry in Malaysia has done well to withstand the impact of economic slowdown along with negative business and consumer sentiment due to disruption caused by Covid-19 outbreak.

Historically, the gift card market in Malaysia has recorded a steady growth with a CAGR of 14.2% during 2016-2020. According to PayNXT360’s Q4 2020 Global Gift Card Survey, gift card industry in the country is expected to grow by 17.2% on annual basis to reach US$ 1192.3 million in 2021.

Despite near-term challenges in 2021, medium to long term growth story of gift cards in Malaysia remains strong. The gift card industry in Malaysia is expected to grow steadily in H1 2021 and record a strong growth in H2 2021. The growth momentum is expected to continue to grow over the forecast period, recording a CAGR of 15.3% during 2021-2025. The gift card market in the country will increase from US$ 1016.9 million in 2020 to reach US$ 2108.6 million by 2025.

While the gift industry in Malaysia is only one-third that of Japan, it is still a lucrative market for Giftee Malaysia, a subsidiary of giftee Inc., from Japan. After noticing that the digital gift industry is still in its nascent stages of development but has high growth potential, Giftee Malaysia entered the country looking for first-mover’s advantage. Since its inception, Giftee Malaysia has partnered with 16 brands across the country. Some of their partner brands include Starbucks, Secret Recipe, and Tealive, among others.

At present, the digital gift card company has only launched two out of its four products in Malaysia. These include eGift and giftee for business, wherein the giftee for business is for the B2B market, allowing corporates to send incentives to employees or digital gifts to clients. Giftee Malaysia is also planning to expand its digital gift card offerings in the form of experiences. For instance, digital gift cards for spa treatments as wedding gifts.

Gift card companies are focusing on their promotional strategies in Malaysia: The prepaid gift card companies operating in the country are making strategic investment decisions to expand their digital gift card distribution and promotion in the country. For instance,

In July 2020, Giftee Malaysia announced its investment into AdEasy Sdn. Bhd., an online marketplace for offline advertising in Malaysia. As giftee Inc. continues to expand in other Southeast Asia countries outside Japan, the investment into AdEasy comes at the first major investment from the gift card business. Notably, through this strategic investment decision, Giftee Malaysia is considering a future collaboration with AdEasy to run various advertising campaigns using their eGift product.

Retail stores are launching contests to boost the sales of gift cards during festive seasons: The traditional gift industry is quite prominent in the country as consumers gift their loved ones several gifts while celebrating various festivities in Malaysia. Consequently, retailers are looking to take advantage of this consumer behavior and boost the sales of digital gift cards.

In December 2020, 7-Eleven announced the launch of the 'Time 2 Gift’ contest over a period of one month, December 2020 to January 2021. The gift card contest was launched in partnership with InComm Payments and Razer Merchant Services. Being Christmas and the time when people send gifts to each other, the gift card contest was launched to generate more sales through digital gift cards.

The contest was available for all consumers nationwide, wherein they stand a chance to win RM1,000 worth of 7-Eleven e-vouchers. Consumers were allowed to buy digital gift cards with different denominations and brands, including Netflix, Spotify, and Google Play.

To know more and gain deeper understanding of gift cards in malaysia, click here.