DUBLIN, March 22, 2024 /PRNewswire/ — The “India Gift Card and Incentive Card Market Intelligence and Future Growth Dynamics (Databook) – Q1 2024 Update” report has been added to ResearchAndMarkets.com’s offering.
India’s gift card industry is expected to grow by 16.5% on annual basis to reach US$8.9 billion in 2024
The gift card industry in India will continue to grow over the forecast period and is expected to record a CAGR of 15.3% during 2024-2028. Gift card market in the country will increase from US$7.6 billion in 2023 to reach US$15.7 billion by 2028.
The gift card market is poised to record strong growth in India over the medium term. The rising adoption of the payment tool, especially among consumers from Tier II and III cities, is aiding the industry growth. Consumers in Tier II cities and beyond are increasingly adopting gift cards as a gifting and payment tool. In India, digital gift cards are more popular compared to physical ones among consumers.
To tap into the high-growth market, more digital platforms are launching gift card solutions to meet the demand among Indian consumers. E-commerce platforms have also reported strong gift card sales in 2023. This trend is expected to continue further in 2024 in the Indian market. Overall, the publisher maintains a positive growth outlook for the Indian gift card sector over the next three to four years.
Amid rising adoption more digital platforms are launching gift card solutions for consumers and corporations
The rising preference for gift cards is evident in the fast-growing competitive landscape in the Indian market. More players have started to offer gift card solutions to consumers and corporates over the last 12 months and this trend is projected to continue further over the medium term.
The Open Network for Digital Commerce (ONDC), in September 2023, launched the ONDC Network Gift Card. The network-level gift card is targeted towards corporates as well as consumers. Unlike traditional brand-specific gift cards, the ONDC Network Gift Card provides consumers with a choice to choose from a vast range of products and brands, spanning different categories such as fashion, electronics, food, and others.
The gift card solution was launched just before the Indian festive season, which is one of the biggest contributors towards total gift card sales over the 12 months. The Network Gift Card also aligns well with the ONDC’s ambition of democratizing digital commerce in India. The gift cards are powered by the RuPay Network and can be loaded with a maximum of INR 10,000.
ONDC, in November 2023, recorded 1.2 million transactions during the festive season. This shows the growing popularity of the platform among Indian consumers. In 2024, ONDC is poised to expand in more Indian cities. This will aid the penetration of gift cards in Tier II and beyond cities over the next three to four years in the Indian market, thereby supporting the market growth too.
Gift card is still a small portion of a multi-billion-dollar gifting industry in India
The gifting industry in India is one of the largest globally. From weddings to festivals, gift-giving is the traditional process followed across the nation. Gift cards still represent a tiny portion of the multi-billion-dollar gifting industry. This is also seen in the revenue generated through gift card sales by providers in India.
IGP, an online multi-category gifting platform, revealed that gift cards constituted only 10% of its total business during the 2023 festive season. The firm has further revealed that corporate and personalized gifting sectors have been growing at a significant rate in India. IGP reported a 20% year-on-year expansion in the corporate gifting segment during the 2023 Indian festive season. The personalized gifting market, on the other hand, reported 25% growth year-on-year.
The fact that gift cards only constituted 10% of IGP’s total revenue during the festival season shows that there is plenty of headroom for growth for providers in the Indian market. With adoption still growing at a significant pace, the growth opportunity will drive more global players into the Indian market, thereby aiding the competitive landscape over the medium term.
The Indian government is considering some relief from GST on gift cards and vouchers
The government, in India, is considering offering relief from goods and services tax (GST) on gift cards and vouchers provided by businesses and merchants. The relief aims to solve the problem of double taxation in certain cases. The decision is expected to provide clear guidelines on how these widely-used payment tools are taxed.
Many brands and businesses offer their customers vouchers or gift cards that can be used to get goods or services. The problem arises when GST is applied at the time of purchasing these gift cards, leading to double taxation when they are used to buy goods or services already subject to GST.
To address this issue, the proposed clarification suggests exempting vouchers and gift cards from sales tax. Additionally, the government also seeks to establish how companies’ vouchers, traded or sold to distributors or dealers, should be taxed. Another issue under consideration, by the Indian government, is the levy of tax on the entire face value of the vouchers rather than simply the commission, as is the practice in the industry when vouchers are transferred.
Scope
Gift Card Sales Estimates by Key Retailers
Tanishq
D-Mart
Reliance Fresh
Amazon (Cloudtail + Appario)
Reliance Digital
Samsung
Reliance Digital Express Mini/Jio
Croma
Big basket
Total Spend on Gifts in India
By Consumer Segment (Retail and Corporate)
By Product Categories (13 Segments)
By Retail Sectors (7 Segments)
Gift Card Market Size by KPIs across Consumer Segments in India
Gross Load Value
Transaction Value
Unused Value
Average Value Per Transaction
Transaction Volume
Average Value of Card Purchased
Number of Cards
Gift Card Market Size by Consumer Segment in India
Retail Consumer
Corporate Consumer (Small Scale, Mid-Tier, Large Enterprise)
Digital Gift Card Market Size in India
By Retail Consumer
By Retail Purchase Occasion
By Corporate Consumer
By Corporate Purchase Occasion
By Company Size
Gift Card Market Size by Retail Consumer in India
By Functional Attribute
By Occasion
Value by Purchase Channel
Gift Card Spend by Consumer Behavior and Demographics in India
Consumer Purchase Behaviour
Gift Card Buyer by Age Group
Gift Card Buyer by Income Level
Gift Card Buyer by Gender
Gift Card Market Size by Corporate Consumer in India
By Functional Attribute
By Occasion
By Scale of Business
Gift Spend by Product Categories (Split by Retail and Corporate Consumers) in India
Food & Beverage
Health, Wellness & Beauty
Apparel, Footwear & Accessories
Books & Media Products
Consumer Electronics
Restaurants & Bars
Toys, Kids, and Babies
Jewelry
Sporting Goods
Home & Kitchen Accessories & Appliances
Travel
Entertainment & Gaming
Other
Gift Card Spend by Retail Sector (Split by Retail and Corporate Consumers) in India
Ecommerce & Department Stores
Restaurants & Bars
Supermarket, Hypermarket, Convenience Store
Entertainment & Gaming
Specialty Stores
Health & Wellness
Travel
Gift Card Spend by Distribution Channel (Split by Retail and Corporate Consumers) in India
Gift Card Online Sales
Gift Card Offline Sales
1st Party Sales
3rd Party Sales
Sales Uplift
For more information about this report visit https://www.researchandmarkets.com/r/6jjlx
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