Malaysia’s market size for the gifting industry is estimated to be at US$1 trillion to US$3 trillion (RM4.1 trillion to RM12.4 trillion), which is one-third of the market size in Japan. That’s according to Ryo Okubo, COO of Giftee Malaysia, a subsidiary of giftee Inc from Japan.
This demand for gifting is largely driven by the many festivities celebrated in our culturally diverse landscape, from Hari Raya to Chinese New Year and Christmas. It consequently presents a large opportunity for e-gifting, further accelerated by the pandemic as more Malaysians are welcoming digital transactions as the norm, from e-commerce to e-wallets.
“We noticed that until now, digital gifting is not widely adopted in Malaysia. However, there is a lot of potential for Giftee Malaysia to enter the market with a first-mover’s advantage,” said Ryo.
So to make their presence known, they’ve already partnered with 16 well-loved F&B brands in Malaysia including Secret Recipe, Starbucks, Tealive, and llaollao.
A digital gift card
Currently, Giftee Malaysia has launched 2 out of their 4 available solutions in Japan: eGift System (eGift), and giftee for Business.
eGift is reminiscent of the physical experience of buying a Starbucks gift card for a friend who can then head to a physical Starbucks branch to claim their drink costing however much the card is worth.
Giftee Malaysia essentially digitalises this transaction. On their site, gifters can purchase an eGift and personalise a digital card with a message. Once checked out, the gifter sends over a unique link to the receiver of the gift, who can claim their frappuccino in-store, for example.
However, recipients themselves do not need to by physically present at the store for the redemption, which means someone else can do it on their behalf.
Ryo also added, “They have the option of having the gift delivered if these brands are available on a third party delivery platform such as GrabFood or foodpanda, or their own delivery service. “
With virtual gift cards, businesses can eliminate printing out physical vouchers and gift cards. This also makes it easier to track and manage their inventory of the number of freebies or prepaid products that have already been claimed.
Meanwhile, giftee for Business works for the B2B market by enabling companies to send eGifts to clients as campaign gifts, or rewards for completing a survey. Think those free Subway cookies you’d get from doing a survey via the link on your sandwich’s receipt.
The team noted that this system is currently being used by over 100 companies from the banking, consumer electronics, insurance, and internet industries. Some names include Maybank, Prudential, Samsung, and Lazada, who use these e-vouchers to help with their marketing and promotion activities.
Helping brands in their digitalisation journey
As the country embarks on its Malaysian Digital Economy Blueprint journey to transform Malaysia into a digitally-driven, high-income nation, local businesses are also evolving. To meet changing consumer needs in the pandemic, Giftee Malaysia believes they have a significant role to play.
In the case of Secret Recipe who supplies their cakes to consumers for birthday celebrations and the like, sending a loved one an eGift with an e-card can recreate the experience. It may be an experience families have missed out on due to the MCO’s restrictions.
Although Giftee Malaysia is predominantly working with the F&B industry for eGifts, they aren’t closing an eye to other potential industries out there. F&B was a starting point since it’s an easier market to penetrate with the right strategies.
Once Giftee Malaysia’s platform gains more confidence from both consumers and businesses, Ryo is hoping to expand their offerings in the form of experiences. For instance, spa treatments as wedding gifts, or scuba diving trips for friends who enjoy the outdoors.
You could say eGift is somewhat like the defunct Groupon, minus having to print out your voucher as proof of purchase.
“For our giftee for Business solution, this is industry-agnostic as companies across a wide range of industries would generally embark on marketing and promotional activities and can leverage on our e-gifts as a way to enhance participation in their campaigns or show their appreciation to their own customers and clients in a fuss-free way,” added Ryo.
In Japan, giftee Inc began by onboarding F&B businesses, but has now penetrated the retail industry and works with a total of 157 brands currently. “So we believe the same trend of development would happen in Malaysia,” Ryo said.
More than just word of mouth marketing
Back in its home country of Japan, the team told Vulcan Post that giftee Inc has hit a quarterly record high as of Q1 2021, with its distribution volume totaling ¥4 billion (about RM150 million with a 76.2% YoY increase), and net sales of ¥1,093 million (about RM41 million with a 141.9% YoY increase).
Granted, these numbers were facilitated by companies shifting business activities from offline to online, something that the team itself acknowledged. But this phenomenon presents further opportunities for the company to replicate these results in Malaysia too.
“With eGift, the brands can utilise a C2C (consumer-to-consumer) platform to sell their products as eGifts. As a customer sends an eGift to a first-time user, this enables the brands to reach new customers and potentially expand the market and generate more revenue,” added Ryo.
Additionally, giftee for Business works as a platform for B2B transactions, where brands can market their products to other companies as eGifts in incentive campaigns. “This would generate new distribution channels to increase revenue significantly,” he explained.
For brands that already have physical gift cards—such as the Starbucks example above—eGift allows these cards to be more visible and accessible since they’re online, and can become a more substantial revenue stream for them.
Featured Image Credit: Ryo Okubo, Chief Operating Officer of Giftee Malaysia