With a market size valued at $1.4 trillion by 2026, it is a healthy prospect for the global gift card market
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Editing: 9; Published: February 2022
Executive Pool: 11152
Companies: 218 – Players covered include Amazon.com, Inc.; Apple Inc.; Best Buy Co., Inc.; Blackhawk Network Holdings, Inc.; Edenred; Global Payments Direct, Inc.; Gift, Inc.; InComm™ payments; NGC US, LLC. ; Qwikcilver Solutions Pvt. ltd. ; Starbucks Corporation; target company; Walmart Inc. and others.
Blanket: All major geographies and key segments
segments: Type (Retail Closed Loop, Restaurant Closed Loop, Miscellaneous Closed Loop, Universal Accepted Open Loop, eGifting)
Geographies: World; United States; Canada; Japan; China; Europe; France; Germany; Italy; UK; Spain; Russia; Rest of Europe; Asia Pacific; Australia; India; South Korea; Rest of Asia Pacific; Latin America; Argentina; Brazil; Mexico; Rest of Latin America; Middle East; Iran; Israel; Saudi Arabia; UNITED ARAB EMIRATES; Rest of Middle East; Africa.
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Global gift card market to reach US$1.4 trillion by 2026
The closest alternative to cash is the gift card. As cash is increasingly perceived and viewed as rash as it requires no effort and involves a dollar value calculated on the relationship, gift cards are growing in popularity. Gift cards with a personal touch, like a handwritten note, further provide a very personal gifting experience, without the hassle of trying to find the right gift. Convenience and flexibility are the top two benefits of gift cards driving their adoption by individuals, businesses, and marketers worldwide. For businesses, gift cards help express appreciation and gratitude to employees. This kind of workplace recognition helps create an inclusive work environment. For retailers and marketers, gift cards help build brand awareness; capture more holiday sales; enable customer engagement; generate useful data on customer behavior; provide easy distribution and improve cash flow. With the growing preference for online shopping by millennial brides, e-gift cards are becoming big business. With internet-savvy brides comfortable shopping online, wedding e-gift cards are increasingly in demand. Selling gift cards is becoming a new flavor of selling in online retail as consumers widely appreciate the many benefits of gift cards. The benefits of having gift cards in e-commerce are many, including increased sales and customer loyalty. Integrated gift card systems help customers pay for purchases using gift cards while simultaneously helping retailers track and analyze customer behavior.
Amid the COVID-19 crisis, the global gift card market estimated at US$899.3 billion in 2022, is expected to reach a revised size of US$1.4 trillion by 2026, growing at a CAGR of 11.1% over the analysis period. Retail Closed Loop, one of the segments analyzed in the report, is expected to grow at a CAGR of 11.4% to reach US$410.8 billion at the end of the analysis period. After a thorough analysis of the business implications of the pandemic and the induced economic crisis, the growth of the Restaurant Closed Loop segment is readjusted at a revised CAGR of 10% for the next 7-year period. This segment currently accounts for a 29.9% share of the global gift card market. Over the past few years, gift cards have garnered notable attention in the restaurant industry as an impressive marketing and branding approach as well as a lifeline for businesses facing the challenges posed by the pandemic. A significant fraction of customers prefer gift cards to their favorite restaurant, giving restaurant owners the option to serve them. Major retailers and restaurant chains such as Walmart, Amazon, Target, Starbucks, and Chipotle also offer their customers digital and physical gift cards. Digital gift cards allow customers to speed up the checkout process using an app. Growing penetration of smart devices and high levels of digital transformation are contributing to the high demand for e-gift cards.
The US market is estimated at $339.5 billion in 2022, when China is expected to reach $156.4 billion by 2026
The gift card market in the United States is estimated at US$339.5 billion in 2022. The country currently accounts for a 38.26% share of the global market. Chinaworld’s second largest economy, is expected to reach an estimated market size of US$156.4 billion in 2026 with a CAGR of 15.3% over the analysis period. Other notable geographic markets include Japan and Canada, each predicting growth of 8.9% and 11.1% respectively over the analysis period. In Europe, Germany is expected to grow around 10.1% CAGR while the rest of the European market (as defined in the study) will reach US$50.3 billion at the end of the analysis period.
Various closed-loop segments to reach $144.8 billion by 2026
In the Miscellaneous Closed Loop global segment, United States, Canada, Japan, China and Europe will drive the CAGR of 9.2% estimated for this segment. These regional markets representing a combined market size of US$66.6 billion will reach a projected size of US$120.1 billion at the end of the analysis period. China will remain among the most dynamic in this group of regional markets. Led by countries such as Australia, Indiaand South Koreathe market of Asia Pacific should reach US$12.2 billion by 2026, while Latin America will grow at a CAGR of 10.7% over the analysis period. Continued
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