Middle East Gift Card and Incentive Card Market - Growth, Trends, Covid-19 Impact, and Forecasts (2023 - 2028)

Middle East Gift Card and Incentive Card Market - Growth, Trends, Covid-19 Impact, and Forecasts (2023 - 2028)

The Middle East gift card and incentive cards market is poised to grow at a CAGR of greater than 7% by 2027. The Middle East Gift Card and Incentive Card Market were moderately affected by COVID-19 as it accelerated the cashless system that was propelled during the Pandemic. The COVID crisis accelerated digitalization by forcing merchants, programs, and customers to adapt to lockdown restrictions. Adoption of e-Gift cards increased by over 250% in the first quarters of 2020, compared to the same period in 2019.

The gift card market in the Middle East region has witnessed strong growth over the last few years. Adoption of the gift card has increased across retail and corporate segments with a range of use cases that go beyond “gifting”. One of the factors driving growth is the e-commerce market. Merchants are incentivizing customers for shopping online and offering gift cards to increase sales and drive customer loyalty. The vast majority of the population is working class, with smartphones and a high internet penetration rate. The retail landscape is well diversified from high-end to mass retail brands, with a large representation of international brands, together with locally-developed concepts. In 2020, the growth of digital gift cards was further expanded, with a shift to digital standing now at over 90% of the customers’ redemption in the B2B programmes. The COVID crisis accelerated further digitalisation by forcing merchants, programmes and customers to adapt to lockdown restrictions. Adoption of e-Gift cards have increased by over 250% in the first quarters of 2020, compared to the same period in 2019.

The strong growth in the e-commerce sector primarily supported the overall gift card industry during 2020, a trend expected to continue over the forecast period. Increasing smartphone penetration and consumers’ inclination towards online shopping have positively impacted the e-commerce sector. In Middle-East, the growth in the e-commerce market is one of the factors driving gift card market growth in the country. With growing online sales the spending on gift cards is also likely to increase in the country. Corporates and individual customers have both identified various ways to use Gift cards and Incentive cards over the last several months; from traditional incentives and rewards to sending Eidiya or just helping the ones in need during the pandemic.

Customers have adapted very quickly to the “new normal” by redeeming or purchasing gift cards. Due to the closure of restaurants and bars, customers spent heavily on groceries and other supermarket purchases; As work from home and online schooling became the new norm, people had to reorganize their houses in a short span of time; New devices, gaming, and streaming options were, of course, popular; fashion and lifestyle are still listed in the top categories with a clear shift on beauty products. Some categories were seriously impacted: travel, experiences, transportation, jewelry, and F&B. However, in the second part of the year, it can be seen that staycations and experiences are catching up again. The UAE’s ex-pat population immediately found the benefits of sending digital gift cards to their relatives in their country of origin with a click of a button and without any fees associated with it. In conclusion, customers were highly adaptive and willing to use gift cards across countries, currencies, and brands.

The Middle East Gift Card and Incentive Card Market are moderately consolidated in nature. Some of the major players operating currently dominate the market. However, with technological advancement and product innovation, mid-size to smaller companies are increasing their market presence by securing new contracts and by tapping new markets. Major players in the sector including Carrefour SA, Consumer Co-operative Union (CCU), Landmark Group, Damas International Ltd., and Sharaf DG LLC, among others are profiled in the report.

• The market estimate (ME) sheet in Excel format
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