3 August 2012
Asian markets – Hotspots for social gifting
The increasing usage and penetration of smartphones, social networking sites, e-commerce and mobile payment technologies have led to the popularity of social gifting – a phenomenon that is sure to become hugely successful, especially in Asian markets. Leon Perera, Chief Executive Officer of Spire Research and Consulting, was invited to share his insights in an article published on ZDNet.
Perera opined that social gifting was sure to take off due to the ease of use factor. Now, a group of friends can pool their contributions online to buy a gift card or voucher from a particular retailer, then send it to the intended recipient online.
Social gifting allows individuals to buy and send gifts online via various social media networks. Though social media is extremely popular in the Western countries, the advent of mobile payment technologies, increased internet penetration and accessibility of smartphones have made this mode of gift-giving increasingly popular in Asia.
Perera added that this trend is likely to emerge very strongly in countries with high rates of Internet and social media penetration, and will also thrive in countries with large numbers of migrant workers abroad, such as China, India, Bangladesh, the Philippines and Myanmar. He elaborated that social gifting eliminates the cost and hassle of sending a physical gift across national borders.
As discussed in the SpirE-Journal Q2-2012, social gifting started out as a method to offer discounts and increase sales without diluting the brand image of retailers. This arose from retailers offering free social gifting coupons or points for gift-giving, to attract customers into their bricks-and-mortar stores where they might spend more.
To cash in on the trend, several social gifting companies have emerged, such as Wrapp, Cashstar, Socialgift, Groupcard Apps, and DropGifts – making social gifting a USD1 billion industry.
Perera added, “In particular, luxury brand retailers may stand to benefit greatly from the trend, as the cultural practice of gifting in countries like China and India is often used to signal the status of the giver.”
Though social gifting is in its nascence, Asian retailers and vendors have to consider entering this market, as late entry could make them lose the first mover advantage.
Spire Research and Consulting is the leading research consultancy in global emerging markets. Spire's competitive advantage lies in its ability to deliver actionable intelligence on the external business environment in support of its clients’ strategic decision-making in marketing and business development. Spire's clients include 50 Global Fortune 1000 companies and government agencies in 15 countries. For more information, please visit www.spireresearch.com.