The startup aims to effectively change the way gift cards are perceived and utilized in Brazil, rendering them effective marketing tools for retailers and appealing gift options for consumers. Giver encourages businesses to use gift cards to retain customers, reward employees and run incentive campaigns. Its closed-loop gift cards can be purchased at physical stores, on websites, via Facebook or at mobile sales points throughout Brazil for use at specific stores or within set networks.
Launched in November 2011, Giver is the brainchild of Diego Sampaio, who observed the popularity and marketing power of gift cards in the United States and recognized an opportunity in Brazil’s enormous consumer market. He set up the company in Paraná, Santa Catarina and Goiânia in 2011, and in January 2012, he incorporated Giver in the United States as well. After a year in operation, 20 networks have adopted the Giver distribution platform and gift card management solutions.
Sampaio told us more about Giver and the growing gift card industry in Brazil.
Emily Stewart: What is the lay of the land of the gift card market in Brazil, and where does Giver fit in?
Diego Sampaio: There are few significant players in the gift card market in Brazil right now. Some competitors focus on the sale of open-loop gift cards (those that can be used at any store), and others focus on the online distribution of offline products and services.
What we do is to outsource all of the gift-card-related functions of a company, thus allowing them to use gift cards as a tool for marketing and customer relations. We work with closed-loop cards that can only be used at a specific network of stores, and we are responsible for the printing and the logistics of the cards as well as the technological development needed for their management on Facebook, the web, mobile devices and in physical channels. We also take care of customer service and manage the financial liabilities involved in the operations.
ES: What have the challenges been to get all of this to work? With the investment from and support of HFPX, how do you plan to proceed?
DS: It is important that we maintain a multidisciplinary team and a robust structure that allows us to serve our customers in a way that is always transparent and secure. HFPX’s investment and the financial and intellectual contributions of its partners on our administrative board will help us to expedite our expansion without losing strength and agility. Moreover, HFPX will help us to accelerate innovations in the sector.
ES: The gift card industry in the United States is huge in comparison to that of Latin America. What has held the region back so far? What barriers still need to be overcome?
DS: In 2012, the pre-paid card sector – of which gift cards form a part – had a turnover of US$20 billion in Latin America, versus US$200 billion in the United States alone. However, the market is expected to grow by 500% over the next 10 years, reaching US$110 billion in 2012, according to First Data Corporation numbers.
The first step towards popularizing gift cards is Brazil is to stimulate and facilitate the entry – and permanence – of big retailers and networks in the market. Managing gift card operations independently isn’t easy, mainly because of fiscal and logistical barriers. The second step is to adopt the practice of giving gift cards in our culture. While gift cards are seen as a practical way of giving in the United States, Brazilians see it as something “cold.” It has to become more personal, close and surprising.
Under the wing of HFPX and following the trajectory of the U.S. gift card market, Giver will work to expand operations and promote the culture of gift-card-giving throughout Brazil and Latin America.