Global Digital Gift Card Market 2024–2033

Reports Description

As per the current market research conducted by CMI Team, the global Digital Gift Card Market is expected to record a CAGR of 12.5% from 2023 to 2032. In 2022, the market size is projected to reach a valuation of USD 310.1 billion. By 2032, the valuation is anticipated to reach USD 1.2 Trillion.

Digital Gift Card Market Insights

Source: CMI Market Research Team Analysis

The digital gift card market refers to the industry involved in creating, distributing, and selling electronic gift cards that can be used to purchase goods or services. These gift cards are bought online or through mobile apps and sent directly to recipients via email or messaging platforms. They offer a convenient and flexible gifting option, allowing recipients to choose what they want.

The market operates digitally, using technology and online platforms for transactions, involving collaborations between retailers, e-commerce platforms, payment providers, and gift card sellers. It is a dynamic market driven by changing consumer preferences, technology advancements, and the growth of online shopping.

Key trends include contactless gifting, integration with mobile apps and online platforms, personalization features, partnerships with popular brands, sustainability focus, and adding virtual experiences and games to enhance gifting. These trends cater to evolving consumer needs and the digital transformation of the gifting industry.

Digital Gift Card Market – Significant Growth Factors

The Digital Gift Card Market presents significant growth opportunities due to several factors:

• Increasing popularity of e-commerce: The growing trend of online shopping provides a significant driver for the digital gift card market. As more consumers prefer the convenience and variety offered by e-commerce platforms, the demand for digital gift cards as gifting options is expected to rise.

• Shift towards contactless payments: The ongoing shift towards contactless payment methods, accelerated by the COVID-19 pandemic, presents an opportunity for the digital gift card market. Digital gift cards align with the preference for touchless transactions, offering a safe and convenient way to send and receive gifts.

• Growing smartphone penetration: With the increasing penetration of smartphones worldwide, the digital gift card market benefits from the availability of mobile apps and platforms. Consumers can easily purchase, store, and redeem digital gift cards using their smartphones, enhancing accessibility and driving market growth.

• Rise of personalized gifting: Personalization has become a significant trend in gifting, and digital gift cards offer ample opportunities for customization. Consumers can add personal messages, images, or videos to digital gift cards, creating a more meaningful and personalized gifting experience.

• Expanding corporate gifting practices: The digital gift card market has a growing opportunity in the corporate sector. Many businesses opt for digital gift cards to reward employees, recognize achievements, or offer incentives. This trend opens up a new customer segment and boosts market demand.

Digital Gift Card Market – Mergers and Acquisitions

The Digital Gift Card Market has seen several mergers and acquisitions in recent years, with companies seeking to expand their market presence and leverage synergies to improve their product offerings and profitability. Some notable examples of mergers and acquisitions in the Digital Gift Card Market include:

• Amazon.com partnership with PayPal Holdings Inc.: In 2018, Amazon.com, Inc. forged a partnership with PayPal Holdings, Inc., allowing customers to use PayPal as a payment option for purchasing digital gift cards on Amazon’s platform. This alliance aimed to enhance customer convenience and flexibility during digital gift card transactions.
• Google LLC joined hands with Target Corporation: In 2019, integrating Target’s digital gift cards into the Google Pay mobile app. This collaboration expanded the accessibility and reach of Target’s gift card offerings, enabling Google Pay users to effortlessly purchase and redeem Target gift cards digitally.
• Starbucks Corporation and Uber Technologies Inc. teamed up: In 2020 to offer Uber Eats customers the ability to utilize Starbucks digital gift cards for their orders. This partnership resulted in a seamless integration of Starbucks gift cards within the Uber Eats platform, elevating the customer experience.
• Blackhawk Network Holdings Inc., a prominent provider of prepaid and gift card solutions, acquired CashStar Inc. in 2018. CashStar specialized in digital gift card distribution and technology, enabling Blackhawk to enhance its digital gifting capabilities and expand its presence in the digital gift card market.
• Epson America Inc. completed the acquisition of SICOM Systems Inc.: In 2019, SICOM Systems was known for its digital menu, signage, and gift card solutions for the restaurant industry. This acquisition enabled Epson to augment its digital offerings, including digital gift cards, enhancing the overall customer experience in restaurants.
• Fiserv, Inc., a global financial technology solutions provider, acquired: In 2021, by taking over Pineapple Payments. Pineapple Payments specialized in integrated payment processing and gift card solutions. This acquisition aimed to bolster Fiserv’s digital payment capabilities and expand its digital gift card market offerings, delivering a comprehensive payment solution to its customer base.

These mergers and acquisitions have helped companies expand their product offerings, improve their market presence, and capitalize on growth opportunities in the Digital Gift Card Market. The trend is expected to continue as companies seek to gain a competitive edge in the market.

COMPARATIVE ANALYSIS OF THE RELATED MARKET

Digital Gift Card Market – Significant Threats

The Digital Gift Card Market faces several significant threats that could impact its growth and profitability in the future. Some of these threats include:

• Fraud and Security Risks: The digital nature of gift cards exposes them to potential fraud, including unauthorized access, theft, or duplication. Security breaches and scams can undermine consumer trust, leading to a decline in the adoption of digital gift cards.

• Technological Limitations: The reliance on technology for digital gift card transactions poses a threat in terms of technical glitches, system failures, or compatibility issues. Any disruptions or shortcomings in the technology infrastructure can hinder the smooth functioning and adoption of digital gift cards.

• Changing Consumer Preferences: Shifting consumer preferences and evolving gifting trends pose a threat to the digital gift card market. If consumers increasingly Favor alternative gifting options or if there is a decline in demand for traditional gift cards, it can impact the growth and market share of digital gift cards.

• Regulatory Challenges: The digital gift card market is subject to various regulations and legal frameworks, including consumer protection laws, data privacy regulations, and financial regulations. Non-compliance or changes in regulations can pose challenges for market players, leading to increased compliance costs and potential disruptions in operations.

Report Scope

Category-Wise Insights

By Channel:

• Brick and Mortar Channel: Refers to the traditional physical retail stores where customers can purchase and redeem gift cards in person. Despite the rise of digital channels, brick and mortar stores remain relevant by offering a tactile gifting experience and attracting customers who prefer tangible gift cards. The ability to see and touch the gift cards provides a sense of tangibility and adds a personal touch to the gifting process, appealing to customers who prefer traditional methods of gift-giving.

• Digital Channel: Involves the online platforms, mobile apps, and electronic delivery methods used for purchasing, sending, and redeeming digital gift cards. The digital channel has experienced significant growth, driven by its convenience, accessibility, and ability to cater to changing consumer preferences for instant and contactless gifting options. The digital channel offers a seamless and contactless gifting experience, allowing recipients to receive and redeem gift cards electronically, eliminating the need for physical cards or in-person visits to brick-and-mortar stores.

By Application:

• Consumer Goods: In the Digital Gift Card Market, consumer goods refer to gift cards that can be redeemed for products across various retail sectors. The trend shows a significant adoption of digital gift cards by consumer goods companies, allowing them to offer personalized gifting options, target specific customer segments, and drive sales by leveraging the convenience and flexibility of digital gifting platforms.

• Health and Wellness: Digital gift cards in the health and wellness sector cater to services like spa treatments, fitness classes, or wellness retreats. The market trend indicates a growing demand for digital gift cards in this area, driven by the increasing popularity of self-care and wellness-focused lifestyles, offering consumers the flexibility to choose from a range of health and wellness experiences as gifts.

• Restaurants and Bars: Gift cards in the restaurant and bar industry allow recipients to enjoy dining experiences or purchase beverages at specific establishments. The market trend highlights the rising adoption of digital gift cards by restaurants and bars, providing a convenient gifting option and driving customer loyalty through targeted promotions, special offers, and rewards programs.

• Travel and Tourism: Digital gift cards in the travel and tourism sector enable recipients to book flights, accommodations, or travel experiences. The market trend reflects a notable growth in digital gift cards in this area, as they offer flexibility, convenience, and the ability to personalize travel experiences, catering to the evolving preferences of modern travellers.

• Media and Entertainment: Gift cards in the media and entertainment industry cover subscriptions to streaming services, movie tickets, or digital content purchases. The market trend showcases a surge in digital gift cards in this sector, driven by the growing popularity of digital media consumption, streaming platforms, and the demand for personalized entertainment experiences.

• Others: Digital gift cards in the “Others” category encompass a wide range of applications, such as automotive services, home improvement, beauty, and cosmetics, and more. The market trend reveals a diverse adoption of digital gift cards in various sectors, aiming to provide tailored gifting options and enhance customer experiences through digital platforms and technology-driven solutions.

By End Users:

• Retail Establishments: In the Digital Gift Card Market, retail establishments are key end users who offer digital gift cards for purchase by consumers. These establishments include various retail stores, e-commerce platforms, and online marketplaces. The market trend indicates a significant rise in the adoption of digital gift cards by retail establishments. This adoption is driven by the convenience and accessibility they provide, as well as the opportunity to boost customer engagement and drive sales.

• Corporate Institutions: Corporate institutions are another important end user segment in the Digital Gift Card Market. These institutions include businesses, organizations, and companies that utilize digital gift cards for employee rewards, customer incentives, and corporate gifting purposes. The market trend shows a growing recognition of the value and effectiveness of digital gift cards in corporate settings. They offer flexibility, personalization options, and a convenient solution for rewarding and incentivizing employees and customers.

Digital Gift Card Market – Regional Analysis

The Digital Gift Card Market is segmented into various regions, including North America, Europe, Asia-Pacific, and LAMEA. Here is a brief overview of each region:

• North America: In the Digital Gift Card Market, North America exhibits a strong presence and robust growth. The market trend in this region showcases a high adoption rate of digital gift cards, driven by factors such as technological advancements, widespread e-commerce penetration, and a culture of digital payments. Major manufacturers dominating this region include Amazon.com, Inc., Walmart Inc., and Starbucks Corporation, leveraging their strong retail presence and digital infrastructure to capture a significant market share.

• Europe: Europe is a thriving market for digital gift cards, with a growing trend of personalized and experiential gifting. The region emphasizes unique and tailored gifting options, including digital gift cards for specific experiences, travel, or luxury brands. Key manufacturers dominating the European market include Apple Inc., Amazon.com, Inc., and Tesco PLC, capitalizing on their established brands and expanding digital capabilities to cater to the diverse preferences of European consumers.

• Asia-Pacific: The Asia-Pacific region showcases immense potential in the Digital Gift Card Market. The market trend is shaped by the rising adoption of digital payments, rapid e-commerce growth, and a digitally savvy population. Personalization and social gifting are prominent trends in this region. Notable manufacturers dominating the Asia-Pacific market include Alibaba Group Holding Limited, JD.com, Inc., and Rakuten, Inc., leveraging their extensive online platforms and strategic partnerships to capture the market share.

• LAMEA (Latin America, Middle East, and Africa): LAMEA is an emerging region in the Digital Gift Card Market, witnessing rapid growth and increasing consumer awareness. The market trend in LAMEA is influenced by the expanding e-commerce landscape, increasing smartphone penetration, and the adoption of mobile payment solutions. Dominant manufacturers in this region include MercadoLibre, Inc., Falabella, and Jumia Technologies AG, capitalizing on their regional presence, strong online platforms, and local market knowledge.

Competitive Landscape – Digital Gift Card Market

The Digital Gift Card Market is highly competitive, with a large number of manufacturers and retailers operating globally. Some of the key players in the market include:

• Amazon.com Inc.
• Apple Inc.
• Google LLC
• Starbucks Corporation
• Walmart Inc.
• Target Corporation
• Best Buy Co. Inc.
• Visa Inc.
• Mastercard Incorporated
• PayPal Holdings Inc.
• Others

These companies operate in the market through various strategies such as product innovation, mergers and acquisitions, and partnerships. For example, In 2021, a notable partnership in the Digital Gift Card Market was between PayPal Holdings, Inc. and Venmo, a mobile payment service owned by PayPal. This partnership enabled Venmo users to purchase and redeem digital gift cards directly within the Venmo app, expanding their gifting options and enhancing the user experience.

In the Digital Gift Card Market, several new players have adopted innovation and development strategies to enter the market and establish their presence. These innovative entrants focus on leveraging emerging technologies, such as blockchain, mobile apps, and AI-driven personalization, to enhance the digital gifting experience.

However, the market is predominantly dominated by key players who have established a strong foothold. Dominating the market are companies like Amazon.com, Inc., Apple Inc., and Google LLC, which possess extensive digital infrastructure, wide brand recognition, and robust distribution networks. These key players leverage their market dominance to offer diverse gift card options, strategic partnerships with retailers, seamless user experiences, and strong customer loyalty programs, solidifying their position at the forefront of the Digital Gift Card Market.

The Digital Gift Card Market is segmented as follows:

By Channel

• Brick and Mortor
• Digital

By Application Area

• Consumer Goods
• Health and Wellness
• Restaurants and Bars
• Travel and Tourism
• Media and Entertainment
• Others

By Card Type

• Closed Loop
• Open Loop

By End Users

• Retail Establishments
• Corporate Institutions

By Region

North America

• U.S.
• Canada
• Mexico
• Rest of North America

Europe

• Germany
• France
• U.K.
• Italy
• Spain
• Rest of Europe

Asia Pacific

• China
• Japan
• India
• New Zealand
• Australia
• South Korea
• Rest of Asia Pacific

The Middle East & Africa

• Saudi Arabia
• UAE
• Egypt
• Kuwait
• South Africa
• Rest of the Middle East & Africa

Latin America

• Brazil
• Argentina
• Rest of Latin America