Retailers, especially in the lifestyle category, are seeing a surge in the gift card and coupons business. Confusion over the choice of the right gift and convenience seem to be two key reasons fuelling the growth of gift cards in organised retail.
Industry players note that brands are getting additional footfalls as gift card redeemers make impulse purchases on every visit, leading to higher billings.
Shital Mehta, CEO, Pantaloon Fashion and Retail, said the company has witnessed a spike in gift voucher sales in the last three months. “Traditionally, it was corporates who opted for gift vouchers. However, this is soon changing, with freedom of choice and convenience being pitched. The share of retail customers is steadily increasing.”
G Raghunath, CEO, Watches and Accessories Division, Titan Company, said: “A consumer who opts for a gift card is generally confused about giving cash as a gift, but would still like to make a statement to the giver. We are seeing a preference for gift cards, as consumers opt for it.’’
Titan, which claims to be the largest gift voucher seller, said the business currently contributes less than one per cent, but is growing significantly. “We have seen a huge spurt since we started operating in the category three years ago. We expect gift cards to show double- digit growth”, said Raghunath. Qwikcilver Solutions, a gift card technology provider, corroborates the view, and notes that the gift card category has grown by 230 per cent in 2013-14 to 14.3 million gift card transactions across various brands. It estimates the Indian prepaid and gift voucher market to grow from ₹2,000 crore in 2012, to ₹9,000 crore by 2016.
TP Pratap, co-founder and CMO, Qwikcilver said in terms of creating and issuing new gift cards, the rise has been equally substantial; from last year’s 2.9 lakh to the current 11.2 lakh.
Shashwat Goenka of the RP-Sanjiv Goenka Group, which runs retail chain Spencer’s, launched its gift card last year. “This year, we are expecting sales through gift card redemption to account for almost one per cent of the total revenue,” he said. Goenka said around 50 per cent of the company’s annual sales also happen during the festive season.