by A) Market Overview:
The global gift card market is estimated to be valued at a staggering US$400 billion in 2018, according to a new report published by Coherent Market Insights. With a projected compound annual growth rate (CAGR) of 10% from 2019 to 2027, this booming market is on track to reach new heights. Gift cards have gained immense popularity in recent years due to their convenience and flexibility, addressing the needs of both consumers and businesses alike.
Gift cards offer numerous advantages to both the givers and receivers. Consumers benefit from the convenience of not having to choose a specific item or worry about sizing or personal preferences. For businesses, gift cards provide an opportunity to attract new customers, foster customer loyalty, boost sales, and enhance brand visibility. As a result, the demand for gift cards is witnessing an upward trajectory, reflecting the changing preferences of modern shoppers.
B) Market Key Trends:
One key trend shaping the gift card market is the rise of digital and mobile gift cards. With increasing smartphone penetration and the convenience of online shopping, consumers are embracing the digitalization of gift cards. This trend is driven by the need for instant gratification, ease of use, and the ability to send personalized and customized gift cards via email or platforms like social media.
For instance, retailers like Apple Inc., Amazon.com Inc., and Starbucks Corporation have successfully capitalized on this trend by offering digital gift cards that can be easily purchased and redeemed through their respective mobile applications. This not only enhances convenience for consumers but also boosts customer engagement and attracts tech-savvy shoppers.
C) Porter’s Analysis:
- Threat of New Entrants: The gift card market poses relatively low barriers to entry, allowing new players to enter the market. However, established brands such as Apple Inc., Amazon.com Inc., Best Buy Co., Inc., Starbucks Corporation, Target Corporation, and Walmart Stores, Inc. enjoy significant brand recognition and consumer trust, making it difficult for new entrants to compete effectively.
- Bargaining Power of Buyers: Consumers hold significant bargaining power in this market. High competition and the availability of multiple options compel businesses to continually innovate and offer attractive incentives to retain and attract customers. This includes personalized gift cards, loyalty rewards programs, and collaborations with popular brands.
- Bargaining Power of Suppliers: Gift card suppliers have moderate bargaining power as they operate in a market where demand is high. However, to remain competitive, suppliers must provide high-quality and visually appealing gift card designs while ensuring timely production and delivery.
- Threat of New Substitutes: The threat of substitutes in the gift card market is relatively low as no other product or service offers the same level of convenience and flexibility. Alternative gifting options, such as physical gifts or cash, lack the personal touch and customization that gift cards provide.
- Competitive Rivalry: The gift card market is highly competitive, with major players constantly striving to gain a larger market share. Intense competition drives innovation, price competitiveness, and the development of value-added services to differentiate from competitors.
D) Key Takeaways:
In summary, the Global Gift Card Market Growth is poised for significant growth, with a projected CAGR of 10% over the forecast period. Key drivers include the rising demand for convenience, personalization, and flexibility in gifting.
Regionally, North America is expected to dominate the market due to strong consumer spending power, while Asia-Pacific is anticipated to witness the highest growth, driven by increasing disposable income and the digitization of economies.
Key players in the gift card market include Apple Inc., Amazon.com Inc., Best Buy Co., Inc., Starbucks Corporation, Target Corporation, and Walmart Stores, Inc. These industry giants have established a strong presence and continue to innovate, leveraging technology and customer engagement strategies to maintain their competitive edge.
As the gift card market continues to evolve, businesses must remain vigilant and adapt to changing consumer preferences, emerging technologies, and the competitive landscape to capitalize on this lucrative market opportunity.
In conclusion, the gift card market holds immense potential for both businesses and consumers, offering a win-win situation for all stakeholders involved. As the industry continues to expand, players must strive to deliver exceptional user experiences, foster brand loyalty, and explore new avenues for growth.
