Republished here on: 04 October 2012
As appeared on 03 October in The Economic Times
MUMBAI: In spite of the concerns over the diminishing footfalls at retail stores, there is an increasing demand for gift cards during the festive season and retailers expect sale of a million such cards during the forthcoming Diwali, according to a recent study.
“Retailers are gearing up for demand of over a million gift cards during this festive season. Indians spent Rs 1,800 crores on gift cards last year.
“The total number of active gift cards touched 2.7 million this month, and has witnessed a growth of 145 per cent in the last one year,” reveals a study by QwikCilver that is into gift card solutions.
Retailers are keen to push gift cards, as customers tend to buy products worth more than the gift card, it notes.
“Retailers are keen on gift cards owing to the significant increase in average uplift. Uplift is the amount spent by an individual over the card value.
“The average uplift is currently at 150 per cent, with giftees spending at least 70 per cent more than the gift card value,” it says, adding that in case of premium accessory brands, uplift is as high as 400 per cent.
The average amount spent on a gift card in the country is Rs 1,400 this year, but is higher at Rs 3,300 for premium accessory brands, the study says noting that almost 40 per cent of the demand for gist card is from Tier-II and Tier-II cities.
“Globally, gift cards are easily the largest selling SKUs for many brands, especially during festive seasons and this trend is soon catching up here,” QwikCilver said.
In addition to retail demand, corporates have also jumped on to the bandwagon, with gift cards turning out to be the favourite for employee and partner gifting programmes.
The study notes that all leading brands, across categories such as apparel, luxury accessories, food and beverage, cinema are adding new variants to their gift card offerings.
