With the rising income levels and penetration of digital payment, the digital gift card market in India has witnessed strong growth in recent years. According to PayNXT360’s Q4 2019 survey, spend on digital gift cards is expected to continue to increase over the next eight quarters across both corporate and retail consumer segments. At a broader level, increased adoption of digital payments and ecommerce is driving the growth of digital gift cards.
One of the reasons for corporates adopting digital gift cards is the ability to reward their employees instantaneously. Other than employee incentives, there is increased adoption across gifting occasions in corporate segment – festivals, consumer incentives, and sales incentives. Open loop virtual gift cards and the ones offering broader purchase options such as Amazon gift cards are outperforming the market. Travel gift cards have also witnessed strong growth. In terms of price points, average purchase value of digital gift cards in India has recorded steady growth over the last eight quarters, a trend expected continue over the forecast period.
Amid the economic slowdown in the country, digital gift cards have posted strong growth in 2019, taking away market share from cash and other gifting segments. In particular, adoption by small and medium enterprises is quite promising, representing a long term growth story.
Being called the land of festivals, online ecommerce platforms experience a massive upsurge in their sale of gift cards during festivals. Digital gift card providers in the country offering an e-gifting solution to both corporates and individuals have achieved their highest sales during Indian festivals such as Diwali. According to PayNXT360, the sale of digital gift cards increased over 70% during festivals in 2019.
In retail segment, self-use is one of the primary drivers of digital gift cards with more number of consumers using it as payment instrument. Digital gift cards are more popular in big cities, though adoption in tier 2 and tier 3 cities is increasing rapidly as well. This increasing demand for digital gift cards in non-metro cities around India shows the widespread acceptance of digital gift cards in the country. In addition, the average purchase price has also increased by over 23% y-o-y in 2019.
One of the fastest-growing digital gift card platforms in India, Woohoo (Qwikcilver online gifting platform), has witnessed exponential growth with a wide range of gift cards. With Qwikcilver and Amazon Pay partnership, Woohoo is aiming to scale their service offerings across the corporate sector, while becoming the market leader in India. To further promote the use of digital gift cards in non-metro cities around India, Qwikcilver came into partnership with Amazon Pay. Under this strategic partnership, the companies launched their Gifting Carnival program, which garnered about 200 brands under 20 different categories.
Swych Gift Cards India is another leading player in the gift card industry in India, with over 200 plus digital gift card options for users. Start-ups such as Zokudo offers an e-gifting solution for luxury brands in the country. With the luxury brand market expected to reach over US$ 70 billion by 2024, PayNXT360 expects competition in this segment to intensify and more innovative start-ups to target digital gift card sector.
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