Firms such as Qwikcilver and Itz Cash Card look to tap growing Rs 9,000-crore gift cards business
BANGALORE: As Indian consumers reach out for the convenience of gift cards, it is creating opportunity for a number of new ventures with services that link retailers with those looking to expedite their search for the perfect gift. These companies offer gift cards in a variety of formats — from digital cards with codes that can be presented at a merchant store to those that can be used at multiple retail locations. “Last minute gifting is always a headache for people. With solutions such as digital gift cards and Facebook gift cards, customers can send out gifts to friends and family instantaneously,” said TP Pratap, chief marketing officer at QwikCilver Solutions. The venture set up in 2008 by engineers from the Birla Institute of Technology including Pratap, Bhaskar Vasudevan and Kumar Sudarsan began with a seed investment of Rs 30 lakh. “We sell about 19,000 gift cards a year, which contribute to about 4 per cent of our overall revenue. The gift card business for us has been growing at a rate of up to 40 per cent every year,” said Sanjay Bhattacharjee, retail head at Titan IndustriesBSE -1.53 %. QwikCilver, backed by venture funds Helion Ventures and Accel Partners supplied gift cards worth over Rs 100 crore in fiscal 2013 and expects the number to go upto Rs 500 crore this year. The company receives a commission of anywhere between 1 to 2 per cent of the total gift card value.
While market estimates place the value of the Indian gift card industry at Rs 9,000 crore, investors said it still has to grow much larger to reach a global level. “Global gift card companies such as BlackHawk Network Holdings are already billion dollar plus companies. We expect similar growth in Indian gift card segment as well,” said Kanwal Singh, senior MD, Helion Ventures whose fund has invested in Qwikcilver.
The rise in organised retail and e-commerce is also contributing to demand for these cards. For the Facebook generation, QwikCilver has launched a Facebook app that lets people buy and send digital gift cards, without even knowing their Facebook friend’s email address.”The receiver receives a notification about the gift. Once the person accepts the gift, he is taken to our portal where he receives the details about the digital gift card,” said Pratap. It also offers digital gift ca .. For example, Titan, one of the clients for QwikCilver lets customers purchase digital gift cards from giftbig.com, the gift card portal for the company. The card then can be presented at a Titan outlet by showing the mail on the mobile or by presenting a print out of the digital voucher.”Gift cards make things transparent. Tracking customer purchases has been made easy and we can develop marketing campaigns around it,” Titan’s Bhattacharjee said.
Source: The Economics Times