Businesses in Nigeria switched to gift cards from hampers during the 2022 festive season as prices of logistics and food doubled in the year.
Olaoluwa Samuel-Biyi, the co-founder of SureGroup, a digital retail voucher company, explained that hampers and other physical gifts are becoming more impractical with the rising costs of products and delivery logistics.
“Most people also now value the ability to get exactly what they need when they need them, and they now place a premium on flexible gifts like gift cards”, he said.
Samuel-Biyi said over N3 billion in sales, SureGifts serve the gifting needs of hundreds of large corporations in Nigeria.
“Many of them buy for employees and customers throughout the year for ongoing employee rewards, long service awards, and customer loyalty rewards among others. But the Christmas season has always been the biggest for us,” he said.
Although the gift card industry is not still popular among most Nigerians, the country’s accelerating inflation is tilting it towards popularity among businesses.
Nigeria’s inflation accelerated for 10 straight months in November 2022, hitting 21.47 percent and was mostly driven by soaring food prices and energy costs.
Gift-hampers, the leading holiday gifts which contain a variety of food items and provisions, were overtaken by gift cards, a form of payment, exchanged for a specified cash value of goods or services from retail stores, filling stations, restaurants, and other accepted businesses.
Jobestina Okoli, a business consultant told BusinessDay that during the recent festive season, she received two gift cards worth N90,000 from different corporate organisations which were unusual as they sent hampers in the past.
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“For Christmas and new year, I got N90,000 worth of gift cards to shop at popular retailing stores. This was a surprise to me because my elder brother also got gift cards worth N450,000. Normally we would have received hampers and other food items,” she said.
Okoli said that the shift from hampers is a result of the high-cost food items and logistics.
“In my brother’s company, they gave them gift cards worth the same amount of hampers they collected the previous year,” she said.
“The company would have spent more to get the value of the hampers for the same price this year, mainly because the price of provision has skyrocketed and logistics companies’ prices have also gone up with their prices depending on the size of the goods and their location for delivery,” she explained.
Also, Bimbo Martins, an HR personnel said that last year, her company picked gift cards over the popular hampers and bags of rice as Christmas gifts to their staff and well-wishers.
“We decided to go with gift cards first because it’s cheaper to deliver compared to the other options. We got outrageous prices from hamper contractors and lastly because we understand that things are hard and we just wanted to give people more buying power for the things they need,” Bimbo said.
Last year BusinessDay reported that diesel, petrol and food prices were part of the seven culprits behind Nigeria’s cost of living crisis.
It reported that diesel surged by 181 percent from about N288 per litre in January to over N809 in November, according to NBS data, while petrol scarcity, which started in the fourth quarter of last year, has seen the pump price increase to N230-N250 per litre from N170.
Food inflation also accelerated for the ninth straight month to 24.13 percent from 23.72 percent in the previous month.
For example, the price of a 70g noodle rose to N120 from N60 last year; the price of a 500g sliced bread rose to N800 from N400; a 500g Golden Penny now costs N500, up from N320; and an egg now costs N100 as against N70.
