Digital Gift Card Market

The distribution channel segment of the Global Digital Gift Card Market is vital or important in connecting merchants and consumers. The segment encompasses two main channels, that is, online and offline. Online Digital Gift Card Distribution Channel Relatively, the online distribution channel has grown considerably or substantially over the past few years. In 2023, the Global Digital Gift Card Market revenue generated through online channels or platforms covered about 65% of the total market share of the entire period. The dominance of the online channel is linked to the convenience that online internet marketplaces offer their users.

Moreover, the availability of e-commerce-based online platforms in the current or modern world has played a significant or substantial role in enhancing the accessibility of this distribution channel. Nonetheless, the scalability of large e-commerce platforms like Amazon is the major feature that makes the availability issue less likely. Furthermore, through online gift card retailers, the consumer base for this distribution channel can access an extensive range or variety of gift cards. For example, they can purchase an ample number of cards from multiple merchants within seconds or minutes by simply browsing the suitable e-commerce website.

Segmentation by Card Type Card Type sub-segment includes Closed Loop and Open Loop. The first one held the dominant position in the Global Digital Gift Card Market in 2023, and its share of revenue exceeded 60%. This high result is primarily associated with the massive uptake of closed-loop gift cards among retailers and businesses for increasing customer loyalty, reducing fraud, and ease of use. The rapid expansion of e-commerce has also intensified the demand for closed-loop digital gift cards that customers can order, receive, and redeem online more conveniently.

At the same time, the Open Loop sub-segment is likely to gain enormous traction in the coming years, fueled by the mushrooming popularity of multi-brand and multi-store gift cards. This type of card gives buyers a broader choice of outlets where they can redeem their certificate, and the diversification of categories attracts more customers. During the forecast period, the Open Loop sub-segment is expected to grow at a CAGR of 17.5%, which is a faster rate compared to the overall Global Digital Gift Card Market expansion.

The Global Digital Gift Card Market is segmented by Application into Retail, Food Beverage, and Travel Entertainment. The Retail segment held the largest market share in 2023, accounting for over 50% of the global market. The Food Beverage segment is expected to grow at the highest CAGR of 18.5% during the forecast period 2023-2032. The Travel Entertainment segment is expected to reach a market value of USD 150 billion by 2032.

The growth of the Digital Gift Card Market is attributed to the increasing popularity of online shopping, the convenience of digital gift cards, and the growing adoption of mobile wallets.

In terms of redemption method, the global digital gift card market is segmented into in-store, online, and both. Among these, the in-store segment held the largest market share in 2023 and is projected to continue its dominance throughout the forecast period. This is primarily attributed to the convenience and ease of use offered by in-store redemption, as customers can simply present their digital gift card at the checkout counter to complete their purchase.

However, the online segment is expected to witness the highest growth rate during the forecast period, owing to the increasing popularity of e-commerce and the growing adoption of digital payment methods.

Fixed value digital gift cards have a predetermined amount loaded onto them, while variable value digital gift cards allow the recipient to choose the amount they want to spend. Fixed value digital gift cards are more popular for smaller purchases, such as buying a cup of coffee or a book, while variable value digital gift cards are more popular for larger purchases, such as buying a new gadget or a piece of furniture. Overall, the fixed value segment held the largest share in the Global Digital Gift Card Market in 2023, accounting for over 60% of the market revenue.

The variable value segment is expected to grow at a faster rate over the forecast period, owing to the increasing popularity of online shopping and the convenience of being able to choose the amount you want to spend.