The UAE gift card segment will face a decline this year due to the pandemic spread but within four years it will grow up to more than $2 billion, a recent report said.
The past few years have given great popularity to the gift cards in UAE, with analysts recording a 19.2 percent compound annual growth rate (CAGR) from 2015 to 2019.
An Ireland-based market research firm Research and Markets says that by 2024 the market size of gift cards will be at $2.04 billion, which will be 60 percent higher compared to $1.3 billion in 2019. From 2020 to 2024 the market will record 13.33 percent CAGR.
The UAE e-commerce market will be partly responsible for this growth, which accounted for more than 30 percent of the GCC countries’ retail trade-in 2019.
Gift cards are like prepaid debit cards that enable the user to buy whatever they want and usually, it is used as a replacement for presents on special occasions. Some people even buy it for personal use due to its ease in handling and availability.
Due to the high popularity of gift cards among UAE shoppers, several providers have added the service to their kitty in recent years. Last year, Google Pay launched its gift cards allowing users to shop movies, books, apps and other products from leading retailers across UAE.
In November 2019, leading media service provider Netflix rolled out its gift cards for the UAE subscribers. The gift card allowed consumers to become Netflix members and pay their subscriptions.
Companies also choose to buy gift cards for their staff instead of a bonus or salary increase as it is an affordable option during difficult economic situations.
In 2020 the gift card market is expected to witness a slow down due to the pandemic’s impact on businesses as well as consumers. But there are still a few aspects that give hope to this sector in this period like self-use.
The e-commerce market of UAE which is expected to reach $30.6 billion by 2020 is another hope for the gift card market.