Amazon aims to double the sales of gift cards this Diwali

The US headquartered e-commerce Company; Amazon India aims to double the value of the gift cards sold in India during the festival season. It aims to increase the sales as compared to previous year due to an increase in its footprint across corporates as well as a rise in the sales on Amazon marketplace. The company sells cards to about 2,000 corporates, which is an increase of 30% year on year. Amazon India has grown the enterprise segment as well as the small and medium scale business segment. SME as a segment has also grown quite aggressive for the company.

Amazon marketplace has seen huge response over the last month, which is an attractive proposition for the corporates because they know that their employees are going to shop on Amazon for Diwali. Amazon is an investor in the gift card firm, Qwikcilver solutions and had led a USD 10 million investment round in the company during 2014. The e-commerce giant offers gift cards in co-branding with the gift card provider Qwikcilver Solutions.

Amazon has claimed to be the largest marketplace in the industry, following the four day festive season sale in the month. The company said that over 50% of its categories doubled as compared to 2016. Categories like large appliances and smartphones saw a 4 times and 2.5 times increase, respectively. Ahead of the Diwali festival, the company had brought down the starting price of the gift cards from Rs.1,000 to Rs.500 in order to target a larger audience.

Currently, more than 70% of the sales of their gift card come from the corporate consumers while the remaining 30% comes from retail consumers. However, this pattern is slowly shifting owing to the increase in the engagement level of the consumers on the marketplace and the increasing penetration of e commerce across the country. The mix could shift in the next couple of years. A consumer initially makes a purchase on the marketplace and feels comfortable with the purchase, following which the consumer starts using gift cards to share the experience with someone else. Amazon had previously experimented with different form factors in order to attract customers. Corporates prefer gift cards over physical gifts for their employees.

During the festival, customers like to give physical boxes to their loved ones; hence, Amazon has created small traditional boxes which will have the gift cards. It is also offering extra offers for the gift card customers in categories like devices and fashion. While the customers can shop from across a range of devices on Amazon, there will be special offers for both the categories. The gift card business of Amazon claims to be working with more than 2,000 corporates across 50 industries which include financial services, energy, education and FMCG. More than 20% of the gift cards overall business for Amazon India come during the Diwali festival. The company also generates significant sales during the festival sale organized before Diwali.