How Gift Card Consumption has Evolved with eCommerce Growth in India

eCommerce is growing at an alarming pace in India and has been making remarkable impact all over the country. India is a billion people nation with web mobile penetration of over 60%. In the next couple of years, we can see that everyone will move online for business.

A majority of our population is very young, which exhibits energy to build and adopt anything new coming their way so a new retail format is expected to have a very fast adoption rate. With the advent of m-commerce, we can see a great opportunity being placed for mobile. It allows and encourages the consumers to browse quickly, easily and purchase products on-the-go, more regularly.

It’s a strong belief that the mobile growth and with the availability of cheaper data plans across telecom brands, digital will grow and the gifting industry in India will soon skip plastic to move towards adopting digital gift cards.

Gift cards are pre-paid cards that can be used to make payments. Such cards have a validity period, which can be replenished with funds and reused within the period. Gift Cards are different from gift vouchers, which are paper-based and can be used only once, while purchasing products. Unlike gift cards, gift vouchers do not allow any partial redemption, wherein balance funds can be carried over for further purchases.

Manufacturing gift cards involve costs of plastic, magnetic strips, and card readers, however, this is changing as consumer’s demand and large retailers are moving towards digital gift cards. Digital gift card is a simple replacement of the paper/plastic gift cards, with a code. The code will be verified and the value attached to it is deducted from the digital card.

As per the stats, earlier, digital gift cards contributed to 7%; recently it has gone up to 17%. We can see the rise in digital gift cards as the consumer preferences and demand is higher for brands and stores and also allows offering a variety of gifting options. Brands like Lifestyle, Flipkart, Dominos, Tanishq are said to experience a consistent demand round the year and largely, during the festival season.

Most precisely, we can see the gift cards / digital gift cards trend booming in the West. Indians are avoiding the hassle of chasing for suitable gifts for each occasion; hence opt for gift cards. This is significantly helping the modern retail in boosting such transactions during the festive season.

Transactions through gift cards are expected to increase from 50% to 80% during October-December. With the increase in demand for gift cards, we can see the change in the Indian consumers’ opinions and preferences. In addition to this, the retailers are too comfortable with the homecoming of the gifts card as the sales are aiming to increase the billing value for transactions paid through gift cards.

The online gifting space, like any other industry, has certain challenges to face. The assurance of same day or fix date delivery, for example, throws up logistical issues that any eCommerce company/s face in terms of manpower and delivery transport etc. Hence, it is imperative for any portals to come up with variety that surprises the buyer as well as the receiver of the gift. In the hectic schedules, a beautifully gift wrapped present can rejuvenate any relation or help maintain the existing ones. The demand for gifts is sure to continue stimulating the online gifting segment significantly.

Online and offline retailers now should collectively view gifting as an opportunity to reach out to their target consumers and promote their brands at almost no extra cost with the help of social media. This social gifting concept is widespread in foreign countries. Considering the digital growth in India, we can see that social gifting will soon be introduced.

Post m-commerce, social commerce will speed up and more people will be connected via social media websites. Retailers will have a major advantage as gifting will give them the chance to engage with its targeted consumers and get timely feedback.


Article by Firoz Khan, Co-founder and CEO, Gift Cards India

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TAGS:   card manufacturing, card services, Global, trends


2015 Gift Card Fulfillment Trends - Now Available!

CLICK HERE to view the entire Infographic

Travel Tags’ 2015 Gift Card Fulfillment Study observed the online gift card presence and fulfillment of 100+ merchants across 14 industries. A high-level infographic is now available for you to view. We hope you find it valuable information as you develop and review your own gift card fulfillment. We encourage you to schedule a FREE consultation session to review your current fulfillment program and develop ideas on how to increase Giftability and decrease lost-in-mail rate.

To truly garner the most from this study, we encourage you to conduct a self-audit with the help of Travel Tags’ Design Team. Contact your Travel Tag Sales Representative to discuss opportunities on delivering the best every single time.

For a look at YOY data and product images, WATCH THE WEBINAR.

For a comprehensive look at the research method and results, REQUEST THE WHITE PAPER.


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TAGS:   card fulfillment, card services, holidays, trends


Gift Cards Are Going Omnichannel

When you think of gift cards, do you still only envision the credit card-sized plastic payments tools given as presents? Like most other tools in the payments industry, gift cards have evolved far beyond their original forms.

Consider the plastic factor. Sure, physical gift cards with company logos are prevalent at drug stores, convenience stores, and supermarkets across the country, but consumer demand for omnichannel redemption of these cards – across in-store, online and mobile devices – is ramping up.

We found in our 2015 shopper research that 80% of consumers want the gift cards they buy as presents to be easily redeemable online or in person based on the specific recipient’s preference. Additionally, 98% of gift card recipients redeem them via a variety of channels, including in-store, online, via mobile or using a combination of these options.

Whereas just a few years ago e-gifts were relatively unheard of, roughly half of consumers have now received these online and mobile gifts. And we expect that figure to continue growing as smartphone adoption expands and online shopping becomes even more engrained. Now gift cards are even being integrated into mobile wallet applications, making them easier to keep at the ready and redeem.

However, it’s important to point out that as gift cards have become more omnichannel, the value in physical gift cards has not diminished. Even though usage of e-gifts has grown, plastic cards are still the most favored. Like many payments segments, the gift card industry simply requires a more robust sales and redemption model than in the past to be successful and to keep up with consumer preferences and demands.

And there is good reason for the industry to keep an eye on strategically evolving gift card programs: the demand for gift cards remains incredibly high. Our research found that 83% percent of the population plans to give gift cards this year, for reasons including: they give recipients the flexibility to buy what they want, they are convenient to purchase, and they are what recipients are asking for the most. People still love receiving gift cards, too. 98% of gift card recipients redeem them, and the top reason people like to receive gift cards is so they can purchase what they want.

Like most payments tools, the consumer usage patterns of gift cards are shifting to increasingly include online and mobile. While this omnichannel approach to shopping and purchasing is a natural evolution for consumers, it will be up to the industry to stay ahead of the curve, offering the capabilities and convenience that consumers will expect today and tomorrow. And with the demand for gift cards so high, this is one payments category that should remain at the forefront of omnichannel expansion. Gift cards aren’t just about plastic anymore.

Timm Walsh is the Chair of the Board of Directors for the Retail Gift Card Association.


Source: PaymentsSource

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TAGS:   card services, holidays, trends