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Rise of the Gifting Planet – Brand & Consumer Perspectives from across the Globe

Qwikcilver, the global leader in Gift Cards, powering every segment of the gift card industry; is the world’s first and only end-to-end Gift card solution provider. With its future ready technology solutions and Qwikcilver has built ground up a state-of-the-art Stored Value Platform exclusively for managing gift cards for Merchants, Retailers and Brands.  Qwikcilver has been granted the license to “Issue” Semi-Closed Loop Prepaid (SCLP) instruments by the Reserve Bank of India (RBI), the apex Financial Regulatory Authority in India.As an ISO27001 certified company Qwikcilver conducts annual audits like CISA and VAPT (Vulnerability Assessment & Penetration testing) and ESCROW reporting on a quarterly basis. These audits are conducted by authorised agencies to ensure security of both Qwikcilver systems and client system.
Starting in 2017, Qwikcilver has been conducting the one of a kind Qwikcilver Gift Card Conclave, an event exclusively for the Gift Card Category which featured the convergence of industry stalwarts as they engaged in insightful conversations which went on to define the future of gifting.
The second edition of the Qwikcilver Gift Card Conclave kicked off with greater expectations after a successful and enriching event the previous year. This year the conclave was held on 18th of April at Bangalore, India. As the only type of the event in India and Asia, this year also saw some of the best minds come together from across the world to discuss and share insights with the Future Forward roadmap. 
The International panel discussion at the 2018 Qwikcilver Gift Card saw eminent speakers from Europe and across the Asia Pacific and Australia. The impressive global panel held forth on national trends in the gift card space, while analysing larger global trends in the space. The session was ably curated by Mr. Himanshu Chakrawarti from Hicare Services. The invaluable insights from the session’s discussion made way for an interactive Q&A session towards the end. 
State of the Global Gifting Market
All the panellists shared a bit of the history as well as the current state of the gifting market in their respective countries. 
The gift card sector is a mature market in Australia that began about 15 years ago. It has run through the evolution from the early paper vouchers to plastic cards and is now moving into the digital era. As the technology falls into place, the gift card market in the geography continues to grow.
Gifting traditions in Russia are largely similar to that in Europe and the US. The major holiday is the New Year, however, and Christmas is not as important owing to the country’s long political history as a communist nation. There are two specific holidays in Russia that are celebrated with much gifting as a major tradition—Men’s Day (originally celebrated as Red Army Day and Defender of the Motherland Day) in February, and Women’s Day in March.
The gift cards market, in particular, emerged around five years ago in Russia. The trend was started by large retail companies by launching plastic gift cards. The retailers built their own platforms and solutions for the gift cards market, which is quite fragmented at present. In the words of Anton Trukhtanov of Direct Service, Qwikcilver’s Russian partner, “Not all companies understand what the product is and how they should be utilised for extracting maximum benefit out of them.” The Russian gift cards market is largely a B2B market at present, with the B2C segment barely making up 20% of the market share.
In the Malay region, there are 21 public holidays, giving the region plenty of reasons to gift. Besides gifting opportunities during traditional festive seasons, Malaysia has also been very innovative about creating new gifting and marketing occasions. What is interesting is that not only retailers, but also banks have joined the seasonal gifting space in South East Asia. In terms of the digital gift cards space, however, the market is yet to make a transition.
Despite Singapore being an advanced country, strangely enough, a lot of retailers continue to use paper gift vouchers instead of gift cards. Shopping malls in Singapore, therefore, still deal with the logistics of paper vouchers – right from producing and issuing them to shoppers as ‘rewards’, down to helping them redeem their vouchers at the malls. In essence, the gifting space continues to function more like a customer loyalty program, as ‘rewards’ for consumers.
In terms of serving operational issues, many malls have actually explored the option of doing away with paper vouchers and moving in with gift cards. Despite the potential demand for the product among retailers, however, the lack of good system providers in Singapore has kept the category from taking off. In a nutshell, therefore, Singapore is currently transitioning from physical vouchers to gift cards to digital gift cards – simultaneously.
China is easily ahead of the curve in the gifting and technology space. Shares Daniel Wang of the giant Blackhawk Network, “When I started my current job profile five years ago, there wasn’t a third party distribution channel in China. At that point, probably 95% of the market was dominated by pre-paid gift cards that sold directly through websites and mobile phone platforms. We started out by partnering with groceries, convenience stores and other physical stores with another market player.”
Today, Blackhawk and its partner in the country have a distribution network of around 20,000 physical store locations across all the provinces of China. The network stretches across tier-II and III cities in the country as well.
Whether it is a mature economy like the European markets where Blackhawk operates, or an economic giant like China, B2C is what has the largest potential in the gift card space.
“In short, we are pretty much in the B2C network for gift cards,” adds Wang, “We have successfully built the consumer business in 26 countries.”
Interplay between Digital Wallets & Gift Cards across the Geography
That is the reason why brands make investments in pre-paid gift cards and mobile payment platforms. Having said that, however, Wang points out an incident where a huge online retailer in China tied up with Blackhawk to launch its gift cards. The reason – leveraging Blackhawk’s huge network of physical stores across the country. “My point here is that despite today’s digital shopping space, if brick-and-mortar stores can exist in one of the biggest countries, it can co-exist with digital platforms anywhere in the world,” finished Wang.
Says Daniel Wang, “In China, we have two giants, RuPay and WeChat. According to government sources, the payment volumes in these channels stands at around US$ 3 trillion.” That easily translates into huge volumes in terms of the mobile payment business, of which these two Chinese giants account for about 90% of the market share. In Wang’s opinion, “The pre-paid product brings strong benefits for the brand, and most importantly for the company’s cash flow. Secondly, it is a connector between emotions and socio-cultural traditions. Therefore, it is a good vehicle for brand marketing awareness.”
“To add to what Dhun was saying, in terms of gift cards in Australia, a much larger percentage is now sold by digital channels in comparison to their presence at physical stores,” said Troy Veron from the Woolworths Group.
Representing the other mature economy on the panel, Dhun Karai from Grant Thornton, Australia, shared that, “We have Apple Pay and Google Pay in Australia. I think, however, that making a contact-less payment platform ubiquitous really made it much more difficult for digital wallets in the country. In essence, digital wallets do well in Australia, because Apple Pay and Google Pay allow mobile phones to tap into them.” About 90-95% of payments in the country today have become contact-less; and therefore, a digital wallet is not a very strong value product right now. In the gifting space, about 65-70% of transactions are for self-use from B2B corporate programs. Gift cards provide a sales uplift, and have evolved into much more than a marketing channel in Australia. Interestingly, the Government also hands out gift cards in its social welfare programs to ensure that the resources are used on necessities and not on addictive practices.
Consumer Insights from Nascent Markets
In the Russian B2C market, it is more convenient to operate a digital wallet than to send a plastic gift card or a gift by mail. For corporate gifting too, it is more convenient because the logistics involved with plastic cards is huge. “That’s why corporates and retailers are all trying to go digital to cut out on the enormous manual intervention in the physical cards space. Now they’re trying to sell their gift cards through mobile apps to customers,” says Trukhtanov. In the B2C segment as well, there are mobile apps that operate like wallets. Trukhtanov feels that this is the right time for partners to create technology platforms for digital cards.
“Gifting has started happening, and with all the digital channels to support that, adoption is going to be higher in Malaysia and South East Asia,” shares Sujjath Ahmed of the Valiram Group. Manual gift cards may face ‘reach’ and ‘delivery’ problems that digital cards are going to solve. From the consumer point of view in the geography too, it is going to be a more personalised experience with digital cards finding higher adoption.
Giving the interplay a global perspective, says Jason Cheong of Icolumn, “For consumers, the lines are actually blurred between gift cards, loyalty cards, credit cards, etc. To consumers, it’s just a method of payment. The biggest challenge that businesses face is how to manage the difference with consumers who think it’s all the same.” As far as Singapore and South East Asia is concerned, Cheong feels that systems, logistics and even legislative assistance may be needed to help businesses manage the space better for consumers. “This is going to be very challenging. but it will also open up a lot of opportunities. For brands, the use of gift cards may be optimised through alliances with partners,” he adds.