Gift Card Market Analysis North America,Europe,APAC,Middle East and Africa,South America - US,Australia,Japan,UK,Germany - Size and Forecast 2024-2028

Gift Card Market Forecast 2024-2028

The gift card market size is estimated to grow by USD 1.10 billion at a compound annual growth rate (CAGR) of 14.46% between 2023 and 2028. This market analysis and report encompasses various critical aspects, including the strategic utilization of gift cards for brand enhancement, recent product launches in the gift card segment by industry players, and considerations regarding the perceived impersonal nature of gift cards. With an emphasis on brand building, businesses worldwide are leveraging gift cards as versatile tools for fostering customer loyalty and expanding market reach. The report delves into the evolving landscape of gift card offerings, highlighting innovations aimed at enhancing consumer engagement and driving market growth.

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The market is experiencing rapid growth, driven by a confluence of factors reshaping consumer behavior and preferences worldwide. With the increasing prevalence of digitalization, strategic alliances between brand owners and retail outlets have paved the way for innovative gifting solutions such as e gifting and mobile gift cards. These digital cards, including virtual and mobile gift cards, serve not only as convenient gifts but also as powerful marketing tools for brand owners, fostering customer appreciation and strengthening loyalty programs. Moreover, as younger generations increasingly embrace M commerce and E commerce platforms, the demand for digital gift cards is poised for significant expansion, reflecting evolving consumer preferences towards convenient and personalized gifting experiences.

Market Dynamics

The market is thriving, driven by the widespread adoption of prepaid cards across various sectors. They allow customers to load a specific amount of money for payment at stores, websites, restaurants, and retail establishments. With evolving customer behavior, these have become a popular choice, symbolizing love, gratitude, and appreciation. They cater to consumer preferences, especially among younger generations, and are increasingly utilized in e-gifting, m-commerce, and e-commerce. Strategic alliances between brand owners and retailers enhance the market, with digital, virtual, and mobile gift cards emerging as innovative marketing tools, often integrated into customer loyalty programs. Our researchers analyzed the data with 2023 as the base year and the key drivers, trends, and challenges. A holistic analysis of market growth and trends will help companies refine their marketing strategies to gain a competitive advantage.

Key Market Drivers

Gift cards as a strategy for brand building are notably driving market growth. They are one of the most effective promotional tools for vendors and retailers as they can be used to advertise their brand or specific offerings. The recipients act as new customers to the business, and buyers of these cards receive reward points while purchasing. Furthermore, recipients of these cards generally buy products, which otherwise they would not prefer to purchase with their money. As a result, the value of the transaction exceeds the value of the gift card in the majority of cases. This drives the rate of return for the businesses.

Furthermore, these are financially profitable for vendors as the latter receives the money in advance, i.e., when a card is purchased and needs to provide the product or service later. Hence, the growing realization of the inherent benefits is driving customer loyalty, acquisition, and retention, as well as superior customer experience, which eventually drives the rate of returns on investments for retailers. All such factors are expected to drive the growth of the market during the forecast period.

Significant Market Trends

New gift card product launches by market companies are an emerging trend shaping the market growth. The global market has a fragmented structure, with various international and domestic vendors operating in the market. Align with market trends and analysis, companies are offering different types of it, backed by several new product launches, in the market to attract more consumers and increase their visibility in the market.

For instance, in September 2022, Blackhawk Network partnered with H and M to launch a B2B program. The integrated program offers physical and digital products for employee rewards, consumer incentives, and fundraising. Thus, the increasing number of new product launches and partnerships by vendors is expected to drive the market during the forecast period. 

Major Market Challenges

The impersonal nature of gift cards is a significant challenge hindering market growth. Presenting these generally indicates a lack of eagerness and enthusiasm on the part of the gift-givers; hence, consumers are increasingly opting for personalized gifting solutions. These are considered impersonal, which has impacted the growth of the global market. In addition, the proliferation of e-commerce platforms such as Amazon and Flipkart Inc. allows consumers to choose from a wide range of products available for gifting purposes as well. E-commerce platforms are currently the fastest and easiest mode to purchase gifts and ensure that users get timely delivery of products. 

For instance, Amazon Prime ensures same-day delivery to its members in selected metro areas across various parts of the world. Hence, consumer preferences to give gifts over these impersonalized products. Thus, the inherent inclination of consumers toward gifts is likely to hamper the growth of the market during the forecast period.

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Market Segmentation

In the type segment of the market, prepaid cards are a prevalent choice for consumers looking to gift a specific amount of money to their recipients. They offer flexibility in payment options, allowing recipients to use them at various stores, websites, restaurants, and retail establishments according to their preferences. Businesses often leverage them as an effective marketing tool to attract customers and drive sales. They align with customer behavior, providing a convenient and versatile gifting solution for various occasions. Whether purchased for personal or corporate gifting, prepaid cards offer a seamless payment experience for both the giver and the recipient, making them a popular choice in the diverse landscape of the  market.

By Type

The E-gifts cards segment is estimated to witness significant growth during the forecast period. These products continue their rapid evolution and ongoing transformation. They are popular among both consumers and retailers, but the method and mode of purchasing, distribution, and redemption have changed in the recent past. However, the growth in digitalization across the global retail sector has led to the development of e-gift cards. They are also known as digital cards, are enabled with a code and are e-mailed to recipients. The E-gifts cards segment was the largest and was valued at USD 580.00 million in 2018. E-gift cards are financially viable for vendors as they do not require printing. Also, these cards can be easily integrated with the company's core products and services. They save businesses from logistical and management problems that they often face while issuing physical products. This increases the overall operational efficiencies of companies. All such abovementioned factors are expected to drive the growth of e-gift card segments of the market during the forecast period.

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By Distribution Channel

Based on the Distribution Channel, the market has been segmented into roadways, waterways, railways, and airways. The roadways?segment will account for the largest share of this segment.?  

Geographical Analysis

North America is estimated to contribute 40% during the forecast period.

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Technavio’s analysts have elaborately explained the regional market research and growth trends that shape the market during the forecast period. The rise in consumer retail spending, better e-commerce strategies, and relatively low inflation drive the growth of the retail sector in the region. The retail market in North America has a large number of retail companies such as Walmart Inc., Costco Wholesale Corp., Kroger Co., Home Depot Inc., and Target Corp. brands. These companies have a distribution network across the US and a strong infrastructure. These retailers offer it, which can be used at their stores, thereby enhancing sales. In addition, the presence of a large number of e-retail companies, such as Amazon.com, supports the growth of the market.

In addition, North America, being the early adopter of innovative products and services, has the largest share of the market. A major chunk of the demand for them comes from the retail sector in the US and Canada. The country being the largest retail market in the world and the second-largest e-commerce market, they are available at all major retailers, thus driving the demand essentially in the region. Consumers prefer to buy gift cards during occasions such as Christmas and birthdays, which has driven the market in North America during the forecast period. 

Market Major Companies

Companies are implementing various strategies, such as strategic alliances, partnerships, mergers and acquisitions, geographical expansion, and product/service launches, to enhance their presence in the Market. Some of the major companies in the market include:

Blackhawk Network Holdings Inc - The company offers gift cards for employers and merchants as e-purchases, employee incentives, and rebate management winners as a part of their digital reward system

The market growth and forecasting report also includes detailed analyses of the competitive landscape of the market and information about 20 market companies, including Alighieri, Blackhawk Network Holdings Inc., Card USA Inc., Duracard Plastic-Cards, Fidelity National Information Services Inc., Fiserv Inc., FleetCor Technologies Inc., Givex Corp., Hennes and Mauritz AB, InComm Payments, JIFITI PRODUCTS, Kindcard Inc., PineLabs Pvt. Ltd., Plastek Card Solutions Inc., Runa Network Ltd., Square Inc., Tele Pak Inc., TransGate Solutions, Village Roadshow Ltd., and Yiftee Inc.

Qualitative and quantitative analysis of companies has been conducted to help clients understand the wider business environment as well as the strengths and weaknesses of key market players. Data is qualitatively analyzed to categorize companies as pure play, category-focused, industry-focused, and diversified. Furthermore, the market report is also quantitatively analyzed to categorize companies as dominant, leading, strong, tentative, and weak.

Market Analyst Overview

In the market, the exchange of gift cards has become increasingly popular due to its convenience and versatility. With the rise of E commerce and M commerce, consumers are embracing digital gifting options like virtual cards and mobile gift cards. This trend is driven by changing customer behavior and preferences, especially among younger generations, who value the ease and flexibility of E gifting. Gift cards are not only a form of payment but also a powerful marketing tool for brand owners, allowing them to enhance customer loyalty through customer loyalty programs. The recipient of gift cards often express their love, gratitude, and appreciation, contributing to their popularity across various retail outlets.

The market has experienced significant growth, fueled by the increasing popularity of prepaid card as versatile and convenient gifts. Consumers often purchase gift cards for specific amount of money, redeemable at various websites, restaurants, and retail establishments, making them ideal for gifting during holidays and special occasions. Both givers and recipients benefit from the flexibility of online redemption, with gift cards offering rewards & incentives such as unique experiences or tangible gifts. Their widespread acceptance across retail sectors and other businesses appeals to corporate clients and individual users alike, especially among Millennials and Gen Z who favor cashless transactions and mobile payments. Additionally, gift cards are practical, customizable, and environmentally friendly, making them increasingly popular on digital platforms and mobile wallets.

Market Scope
Report Coverage	Details
Page number	120
Base year	2023
Forecast period	2024-2028
Growth momentum & CAGR	Accelerate at a CAGR of 14.46%
Market Growth 2024-2028	USD 1.10 billion
Market structure	Fragmented
YoY growth (%)	11.01
Regional analysis	North America, Europe, APAC, Middle East and Africa, and South America
Performing market contribution	North America at 40%
Key consumer countries	US, Australia, Japan, UK, and Germany
Competitive landscape	Leading companies, Competitive Strategies, Consumer engagement scope
Key companies profiled	Alighieri, Blackhawk Network Holdings Inc., Card USA Inc, Duracard Plastic-Cards, Fidelity National Information Services Inc., Fiserv Inc., FleetCor Technologies Inc., Givex Corp., Hennes and Mauritz AB, InComm Payments, JIFITI PRODUCTS, Kindcard Inc., PineLabs Pvt. Ltd., Plastek Card Solutions Inc., Runa Network Ltd., Square Inc., Tele Pak Inc., TransGate Solutions, Village Roadshow Ltd., and Yiftee Inc.
Market dynamics	Parent market analysis, Market growth inducers and obstacles, Fast-growing and slow-growing segment analysis, COVID-19 impact and recovery analysis and future consumer dynamics, Market condition analysis for the forecast period.
Customization purview	If our report has not included the data that you are looking for, you can reach out to our analysts and get segments customized.

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What are the Key Data Covered in the Market Research Report?

• CAGR of the market during the forecast period 2024-2028
• Detailed information on factors that will drive the market growth during the next five years
• Precise estimation of the market size and its contribution to the parent market
• Accurate predictions on upcoming trends and changes in consumer behavior
• The market growth analysis across North America, Europe, APAC, Middle East and Africa, and South America
• A thorough analysis of the market’s competitive landscape and detailed information on companies
• Market forecasting of factors that will challenge the growth of market companies

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