Traditional gifts being replaced with digital gift cards

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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, which is changing consumer’s gifting preferences.

According to PayNXT360’s Global Gift Card survey, penetration of digital gift cards has doubled across emerging and developed markets. Number of retailers offering digital gift cards has also increased significantly. Also, since the onset of the pandemic, technology investment to drive sale and manage digital gift cards has gained momentum, a trend expected to continue over the short to medium term.

People are moving away from the traditional gifting options such as greeting cards or edibles to digital gift cards. For instance, there has been a 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 is offering digital red envelop in the country. Notably, in 2021, during the Chinese New Year, more than 1 billion digital red envelopes are expected to be exchanged through Tencent’s WeChat platform.

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 DBS, the card is reloadable and can be accessed through DBS PayLah! mobile wallet. Similarly, PayTM, one of the popular and leading mobile wallet providers in India offers ‘Lucky Lifafa’ an app that offers gift card to match the Indian tradition of giving lifafa -an envelope with cash during marriages or any auspicious occasions.

In May 2020, Blackhawk Network launched digital gift card which can be sent to the receiver’s phone and can be redeemed at 60,000 stores in the UK and Ireland. The gift card can be used to make contactless payment at these stores.

Recently, Google Pay partnered with Qwikcilver in December 2020, to allow users send and receive virtual gift cards. In the same month, Crocs, the global casual footwear maker, partnered with Loop Commerce, to launch GiftNow Solution on its digital platform to offer e-gift cards to users. The impact of this pandemic is expected to last longer and will also change the way people live. Hence, more dependency on digital platforms will also create significant growth opportunities for gift cards going forward.