Experience Gifting - A Boom in Gifting Industry

Published in Marketing & Strategy Articles category by MBA Skool Team , Published on February 20, 2015

The latest innovation in gifting industry is experience gifting. It started from United Kingdom in 1990s, when Red Letter Days came into existence. The company was founded by British entrepreneur, Rachel Elnaugh. The idea hit her when she wanted to gift her father tickets for an England team cricket match. Red Letter Days witnessed huge success in UK market. Following which other experience gifting companies were founded in different parts of the world. Some of these were RedBalloon in Australia, Great American Days, Cloud 9 Living and Xperience Days in United States.

Two biggest players in this industry are Smartbox.com and UniQgift.com, where the former is a UK based experiences selling company and the latter is a Singapore based experiences and product gifting company.

Many companies in India have also joined the race and established their name in experience gifting. Some of these are Giftxoxo, Exciting Lives, Wishpicker, Wittygift and Dhoombox. These online gifting portals provide users a gamut of choices among various categories like adventure, dining, health and beauty, tours, etc.

Till date, many experiments have been performed on the effect of experience gifts over material gifts. The parameters included happiness, value, memories and the effect that the gift leaves on the recipients. The results thus obtained are as follows:

1. Experiences lead to increased sense of satisfaction than possessions (Carter and Gilovich 2010).

2. Experiences ultimately are perceived to provide greater happiness (Van Boven and Gilovich 2003).

Experience Gifts over material Gifts:

• Unconventional and exciting:

Experience gifts are not boring and conventional like regular coffee mugs, watches, teapots, sunglasses, etc. Be it a friend’s wedding or parent’s anniversary, experience gifts are best suitable for every occasion.

• Memorable and special:

It is found from research that memories have a lasting effect on people. Where a positive memory enhances mood, a negative experience triggers pain and dejection. An experience can be one such memory which can be cherished by the recipient throughout his life.

• Easy to choose:

Experience gifts are easy to select. So they do not leave you perplexed over issues such as what would be the best suitable gift for him/her, would he/she like it or not, etc.

• Personal Touch is well appreciated:

Since memories make us happier they are also appreciated by one and all. Adding a personal touch by customization or personalization makes the gift even more unique. Gifting a biker a tour of the city on a Harley Davidson is the best gift he might receive and it will also be appreciated. Value addition can be done by adding refreshments, or a dinner in between the tour.

Porter’s Five Forces Model

The porter’s five forces model, which tells us where the power lies in a business, is as given below:

1. Threat of New Entry: High

 Not too expensive to enter the industry

 Previous experience not a factor as the industry is still evolving

 Low barriers to entry

2. Competitive Rivalry: Moderately High

 Number of small players

 Low customer loyalty

 Product replication is very easy

3. Bargaining power of the Suppliers: Low

 A very large number of suppliers- for different services, e.g. restaurants for dining experience, spas for beauty experiences, adventure and tours companies.

 Supplier bargaining depends on customer demand for a particular brand/supplier- which makes the bargaining power high in those cases

 In case, customer requirements are flexible, bargaining power of suppliers is low

4. Bargaining power of Buyers: High

 Large number of players offering experience gifts

 Moderately large orders from single buyer(in case of corporates) at one time

 Buyer has high bargaining power because they can source these experiences on their own

5. Threat of Substitution: High

 Many restaurants and spas are offering their own experience gift cards

 Moreover, the experiences are easy for the customers to source at their own level

Major Players Analysis


As the table above depicts, there are a few players in this arena as of now. Although the above table is not exhaustive, these players constitute the major part of the industry.

The Road Ahead

The current size of online gifting market is USD 100 million, as told by Vivek Mathur, Founder and CEO at Giftease.com. Out of this, experience gifting holds a considerable share and is bound to grow exponentially as the trend moves from physical to experiential gifting. What is amazing about this segment is, that it has on its own, the capacity to expand the overall gifting industry, instead of just growing under its ambit. So in the coming years, we should not be surprised to see the next round of biggest fundings to go to these companies; or even more exciting- acquisitions by the big giants like Amazon or Flipkart. Who knows, the next surprisingly high package at the leading colleges might come from this industry itself.

This article has been authored by Chitra Batra & Rishabh Mehta from IMI, New Delhi


1. Joseph Goodman (2013). Giving Happiness: Do Experiential Gifts Lead to More Happiness, Washington University, St. Louis.

2. http://www.iamwire.com/2014/01/online-gifting-market-india-usd-100-mn-industry-vivek-mathur-founder-ceo-giftease-com/24234

3. http://www.cdotsys.com/gifting-industry-market-analysis/

Views expressed in the article are personal. The articles are for educational & academic purpose only, and have been uploaded by the MBA Skool Team.

If you are interested in writing articles for us, Submit Here

Share this Page on:
Facebook ShareTweetShare on Linkedin