Online gifting: the next big thing of e-commerce

Never was buying gifts this easy. Traditionally, one had to visit brick-and-mortar shops, spend time in travel besides money to […]


Never was buying gifts this easy. Traditionally, one had to visit brick-and-mortar shops, spend time in travel besides money to pick that gift for their loved ones. These days it can be done at the click of a mouse. With the world going digital at a furious pace, online gifting industry has been offered enough wherewithal to stabilise its presence. In the first half of the year, gift cards manufacturer Qwikcilver released a report on the online gifting industry scenario in the country. According to the report the market is expected to touch $84 billion by 2024 from the $65 million at present. The global gifting market is estimated to be $475 billion and India is expected to be one of the strongest contributors by 2024.

Now, with the festival season round the corner, demand is likely to escalate and, as is to be expected, online platforms are all gung-ho over the season: they are expecting a bigger growth jump going forward. “During Rakhi, for instance, our member list shot up to 140 per cent, week on week,” says Ashok Reddy, Founder and CEO of GrabOn, bootstrapped start-up.

Five-year-old GrabOn, based in Hyderabad, has recently forayed into the gift cards market and is expected to bolster the profit margins of the company by 20 per cent. “According to me, traditional gifting industry stands somewhere around Rs 250 billion in India while organised gift cards is between Rs 75 billion to Rs 80 billion. As market is growing year-on-year at the rate of 40 to 45 per cent, it gives us immense opportunities. Foraying into gift cards was a natural extension for us,” says Reddy.

Conventionally, gift cards were in physical form but with the proliferation of smartphones, corporate gift cards have now shed the physical form and entered the era of digital gift cards and vouchers that are more convenient and cost-effective in terms of logistics and vendor management. The corporate gifting market has grown tremendously over the last decade. According to a report by Technopak, a management consulting firm, the corporate gifting market in India is estimated to be $1.7 billion and is growing at over 200 per cent per annum. Traditional gift cards and vouchers have gained traction over the past few years but with growing smartphone usage in India and the evolving and savvy Indian customer, digital gifting is definitely gathering steam. In India, digital gifting contribution will scale three-fold claiming eight per cent share of the gifting market of about $6 billion.


Gift cards serves the purpose and are huge point of promotion for different brands and e-commerce players. They are helping brands by boosting their sales, activating new deals and generating awareness among consumers. Basically, it is majorly used to encourage online shopping,”says Ashwani Kumar, Business Director at SavioPlus which is one of the newest players in the coupon and online voucher market that deals mostly in the Middle East.

A whitepaper released in 2017 by Qwikcilver states that about 54 per cent of the gift cards are redeemed by the end consumers within 30 days of purchase. In India, says the report, digital gift cards have grown at a faster pace than physical gift cards, leapfrogging the Indian market in comparison with the western market. Digital gift cards will constitute an increasingly higher share — as high as 80 per cent for the top 10 brands by 2019–20. In this digitalised age, an integrated omni-channel retail experience across categories such as e-commerce, hospitality, travel and e-gift cards are fast becoming the preferred gifting choices of the new-age consumer.

One of the Indian Fintech companies, Zeta, has made payments digital, fast, inclusive and safe for companies and their employees since 2015. The company, apparently, after studying the market has launched Zeta Spotlight – a reward and recognition program for companies. “With the popularity of online shopping increasing exponentially, online brand vouchers from e-commerce shopping sites have gained a lot of traction in the market. They offer employees the option of selecting what they want. In fact 46 per cent of the employees in India prefer to get online gift cards as gifts from their employers according to a recent dipstick study of Zeta users,” says its co- founder and CTO, Ramki Gaddipati.

Mostly millennials are the ones who are backing online corporate gifting, as they are the biggest online consumers. “This generation is more tech savvy, they want instant solutions. Numerous online options had made it easier for us to buy anything, anytime and anywhere. Likewise, people have moved away from traditional gifting to gift cards, as it is convenient for them to send Rs 500 e-gift voucher to someone in a click,” says Reddy of GrabOn.

In India, a major share of online gift market space belongs to big corporate houses, as they have various employee programs that cater to incentives, awards and recognition. Past some years, the Indian corporate space is increasingly becoming more diverse. There are large corporations co-existing with start-ups where Gen Y are working along with millennials. Needless to mention, such diversity percolates to a differing understanding of values around employee appreciation, motivation and gifting.

Paarth Sharma, who works in a firm at Film City in Noida enjoys corporate discounts offered by his company. “Whether I am shopping or eating out, I just have to show my ID card before billing and I get huge discounts on the payments. While the discounts are on selective and well-known brands this has made my life more easy. On festivals we receive corporate gift vouchers of big brands where we can do shopping for a particular amount,” says Sharma. He adds that he is looking forward for the Diwali gift vouchers that his company will likely to offer this season.

There are a few distinct trends that have become prominent in gifting today and most corporate houses are sticking to them for practical reasons.

Offering employees a choice

Physical gift culture has almost vanished what with voucher-based gifting becoming more popular. It offers employees a choice of selecting rather than being forced to use what is given to them

Sustainable gifts
Many companies these days are supporting gifts that are Eco-friendly. Paper or plastic-based products are often avoided in support of environment-friendly products. In fact, some companies, such exercises are even aligned with their corporate social responsibility goals.

E-com sites based gifting
With the popularity of online shopping increasing exponentially, brand vouchers from e-commerce shopping sites are gaining traction in the market. Even vouchers from travel and food sites have become popular with most employees. The popularity of vouchers is also attributed to the fact that they have a multi-generational appeal and offer employees the option of selecting what they want – the most important aspect of employee gifting today.

Experience-based gifting
Breaking away from all kinds of traditional gifting, many corporations are offering experiences to employees instead of physical gifts. Sponsored trips, spa days or even medical examination leave employees in awe of the company culture that revolves around pampering employees.

Meanwhile, sites which gives cash back and coupons like Paytm, Mobikwik and are also looking forward to the festive season and have already set the ball in motion with bags full of schemes and discounts. For instance, has predicted 300 per cent rise in transactions in October to December period. This year, e-commerce players are also likely to increase affiliate commissions and media buying by over 100 per cent as compared with last time. On the other hand, customers can look for discount offers and cash back rates to grow by up to 80 per cent this festive period.

The last quarter of the year usually generates a major chunk of sales for retailers due to the festive season. While 20 million people are expected to shop during the festive sale next month, at CashKaro we are expecting a 300 per cent increase in transactions. The needle is clearly moving from offline to online, as more and more people are now ordering items such as TVs, washing machines and fridges in addition to smartphones,” says Rohan Bhargava, Co-founder,

According to BCG and Google joint report findings on digital consumer behaviour in India, with rising internet penetration, greater digital maturity of users and growth in supporting infrastructure, the adoption of online transactions is likely to increase rapidly. Digital transactions estimated to be a $100 billion opportunity. Whereas three years down the line, the number of online transactors is also estimated to grow. Taking this as a key thrust force, Reddy of GrabOn is extremely optimistic for achieving great response and jump in the membership base, “We are seeing lot of transactions at B2B side. Not only this, we are also very optimistic about the B2C front, as people are more into online transactions. New users include women as well,” says Reddy.

Bhargava of is also positive and predicts a good season for online gifting and cash back business. “We are also expecting a 400 per cent increase in traffic from tier 2, tier 3 and tier 4 cities as discounts and increased cash back offers will encourage people to shop more, especially first-time shoppers. We are going to see a massive spike in online orders during this period and are confident that this will be the biggest ever sale in terms of traffic, acquisition of new customers and influx of great deals.”


Gifting is a happy occasion for everyone, digital economy and technology has made this experience even better. With online gifts and e-cards and vouchers people have ample of options to select their own gifts digitally while being free of logistics and other complexities. As the festive season is round the corner, corporate houses spend a considerable amount of time and resources on planning, procuring and distributing gifts to their employees. The two most important factors corporate houses need to keep in mind while gifting is whether the gift will be appreciated by the recipient and whether it will be delivered well in time for the occasion. Today, most corporate houses have a diverse employee base which includes people from different ethnicity, different age-groups and different cultures. So sending out one type of gift may not work well for all concerned. Having the option to choose your own gift is something people appreciate the most. And this has catapulted services like online gifting to another level.

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