Are Indians really into buying virtual gifts such as hugs, kisses, cakes, teddy bears, flowers that one commonly sees on offer on social networks?

It might seem like paying money for nothing. But, according to Mr Mohit Gundecha, Head, India Operations and Director Business Development, mig33, a mobile social networking platform, it sold over 40 million virtual gifts in 2010, and a substantial number were bought by Indian users.

What's more surprising, the company claims that people in smaller cities in India are bigger consumers of these virtual gifts.

“India is among our top five markets,” said Mr Chris Chandler, Vice-President, Business Development, mig33. Sales of virtual gifts in India more than doubled in 2010, claims the company. However, the fastest growth in virtual gifting for the company comes from Nepal, Tanzania and Bangladesh, which grew by well over 200 per cent.

Of course, in value terms, the gifts cost negligible amounts - 69 per cent of the users in India, according to a survey the company did, bought gifts that cost less than Rs 15.

“But on an average, our users have spent a dollar at least,” says Mr Gundecha. Mig33 claims to have 40 million registered users, and it differentiates itself from other social networks by allowing users to assume an aspirational identity and connect with strangers rather than friends.

But why would anyone want to buy an unreal gift? The answer, according to their survey, was that users felt that virtual gifting helps them save costs on real gifts. The most popular virtual gifts across cities were love and dating items.

The growth in virtual gifts has been driven by enabling micro transactions through merchants. Users buy the gifts through cash cards or coupons. Going forward, the company feels that developing offerings that will cater to local cultures and tastes will grow the virtual gifting market even more.

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