Virtually, with love
How digital gift cards are seeing growing popularity in tier 2 and 3 cities
Giving gifts is a big part of our lives. Be it the ones our parents and relatives give us during festivals and birthdays or when they return from their travels, gifts bring so much joy, when you’re on the receiving end. When you’re the one who has to buy the gift, it’s no less than an ordeal. There are so many things you need to take into consideration and then visit shops after shops to find the gift appropriate for the person. But thanks to gift cards, you don’t need to worry about things like whether it will fit or not, will the recipient like the colour or not, will they use it or not, will it suit their taste or not and so on. It’s like giving cash, but only with more heart.
Virtual or digital gift cards are mostly delivered via email to the concerned person and the benefits are that it won’t get lost, the receiver can get whatever they want with it without even having to visit the physical store.
Gift cards are witnessing a growth in popularity in tier 2 and tier 3 cities, and Pune is somewhere near the top of that list with Nagpur, Nashik and Aurangabad following suit. Industry experts say that the number of gift cards purchased is increasing with every passing year.
As per a survey by Woohoo.in, a popular digital gifting platform, unlike other cities, women contribute significantly to the gift card purchases in Pune.
For those of us who aren’t very confident with ecommerce and how this whole thing works, Pratap TP, co-founder and director, Qwikcilver Solutions (parent company of Woohoo.in) sheds some light on the process. Says he, “One can log onto a brand’s website or ecommerce sites like Amazon or neutral digital gift cards sites like Woohoo.in, to purchase digital gift cards. They can select the gift card of their choice, personalise it with templates or images, make the payment and then send the gift card to the recipient through digital mode such as an SMS, email etc. The recipient just needs the gift card number and PIN to use it. One can redeem the gift card on the brand’s site or take it to the physical store and use it while making their purchase. The recipient can get digital gift cards immediately and there is instant gratification.”
Currently the digital gifting card market is estimated to be around $1.5 billion (over Rs 10,000 core). Close to 90 per cent gift card purchase transactions across India were done via mobiles. In 2017, global digital gift card spending exceeded US$ 68 Billion and it is envisaged that by 2024, the digital gifting economy will be worth US$ 698 Billion. India will be the fastest growing market in the period 2018-2024 for digital gifting.
Among the most popular are gadgets gift cards from Croma, Flipkart, and Amazon, apparel or lifestyle gift cards from Myntra, Levis, Shoppers stop, and grocery gift cards from Big Bazaar, More, Big Basket, and travel gift cards from MakeMyTrip and so on.
Talking about how the most popular category among consumers in Pune, Pratap says, “Overall, e-commerce and travel are some of the popular categories when it comes to digital gifting,” he adds.
Why have digital gift cards become so popular?
The answer is simple — it is the convenience of buying these gift cards at the click of the mouse that’s contributing to its growing demand. “The penetration of smartphones and access to affordable data has played a significant role in getting consumers across geographies to use gift cards,” says Pratap, adding, “In addition, brands and retailers plan on moving beyond the top metros and this has further proliferated the usage of gift cards in non-metros.”
To this Manoj Agarwal, co-founder, Xoxoday.com, adds, “With high internet usage and mobile phone penetration, the gift card market is picking very well in both metros and tier 1 and tier 2 cities. People are finding gift cards as a convenient way of gifting on all occasions.”
He says that developed countries like USA have thousand times more demand than in India. “However, the demand in India is increasing every year as an accepted way of gifting, especially when cash money gifting is not so easily available as earlier,” he adds.
Who are buying these cards?
Many would believe that because Pune is an IT city, the techies would be buying a lot of these gift cards. And there is some truth to this. “The general profile of the customer base includes college students and the young IT crowd. About 49 per cent of gift card buyers are in the age group 25-34, and 40 per cent are in age group 18-24, with a humble 7 per cent in 35-44 age group,” says Agarwal.
He adds, “The gift cards are popular across all genders. Some people buy it for personal occasions like birthday, anniversary, Valentine Day, New Year, Diwali, weddings and so on. Corporates buy it to gift it to their employees, channel partners, consumer programmes and referrals. The usage and buying is still higher in white collar industry, however the demand is picking up in blue collar side since the last two years.”