Wrapp, Karma and Social Gifting: The Future of E-Commerce?

This is Part 8 of my continuing series on the most important digital advances and most interesting emerging companies This report focuses on the growing social gifting business led by Wrapp Facebook39s Karma and other companies described below Prior reports focused on the Cloud Google Glasses Crowdfunding Retargeting Airtime Facebook video chat credit card linked offers Linkable Networks trending social companies Wendr ShopSocially and Karma Next week39s report will feature more trending companies To read the full series visit httpwwwjackmyerscommediabusinessreportSocial GiftingIf you haven39t heard of social gifting yet you will soon It is the next biggest thing in ecommerce since Groupon Living Social and several clones While sites like Groupon offer discounts on behalf of retailers social gifting is about offering free gift cards or gift cards to purchase and gift to friends and family via Facebook and other social media sites According to Reuters social gifting is the new buzzword in ecommerce becoming an Internet phenomenon very quickly Most recently social gifting sites like Wrapp are becoming the hottest trends in the social media circuit Social gifting allows friends and family to use their social media outlets for giving virtual gifts ones that actually have some worth Social gifting sites and mobile phone apps provide egift cards for major retailers some of which are free and some purchasedSocial gifting has been a relief for retailers and consumers who are looking beyond discount and deal sites such as Groupon since consumers can actually purchase items they want with their social gift cards The apps currently catching buzz are available on Facebook which users can access through the website or more commonly the mobile app Egift cards are purchased or sent to friends by individuals as well as groups through social gifting apps Merchants like social gifting because it lets them appeal directly to the consumer instead of paying for expensive marketing campaigns or hefty print and TV ads Merchants also see value in using the social gifts cards as a promotional toolAmong the social gifting sites the leaders are Wrapp and KarmaWrappAs the leading social gifting site on the market the newly launched Wrapp is quickly gaining a solid following Wrapp was founded in 2011 in Sweden by a team of entrepreneurs who have helped to found additional popular sites including Groupon Spotify and LinkedIn Wrapp is wellfunded with 105 million in capital from technology firm Atomico and GreylockWrapp is available on Android and iPhone operating systems and allows friends to exchange free and purchased egift cards through Facebook as well as through their mobile phones It39s currently available to consumers in the United States United Kingdom Norway Sweden Finland and the Netherlands with more locations like Canada Japan France and Brazil coming soon According to Reuters Wrapp has distributed over 15 million free gift cards from almost 180000 people Wrapp39s major retailers includeamp183 Brooklyn Industries designer clothesamp183 Bjorn Borg designer underwearamp183 GANT American sportswear with a European flairamp183 Gap casual American clothesamp183 Fab design inspirationsamp183 HampampM affordable quality family fashionsamp183 Happy Socks online designer socksamp183 Sephora makeup haircare skincare and moreamp183 Spa Finder massage yoga spa fitness finderamp183 Rovio Entertainment Angry Birds creatoramp183 Warby Parker eyewearamp183 Threadless graphic teesamp183 The Wall Street Journal leading business publicationamp183 Wayfair cookware lighting and furnitureamp183 WeSC clothing and accessoriesKarma Facebook acquired Karma shortly after they became a publicly traded company in May 2012 Karma which was founded in 2011 allows users to send a gift card to their friends who will be notified through Facebook text instant messenger or email The receiver of the gift can either accept the gift or exchange it for another gift or choose the option to donate the gift to charityOthersWrapp and Karma aren39t the only ones playing in the social gifting sandbox though Social Gift Drop Gifts Groupcard Apps and CashStar are also hoping to be early birds in a growing and trending internet sector For instance CashStar has an association with over 200 retailers reports Reuters Groupon and Living Social are indirectly in the social gifting market by enabling consumers to purchase daily deals for others as gifts So far though there39s no hard evidence that Google is an early adopter of the social gifting crazeCaveats of Social GiftingWhile social gifting is quickly becoming the next Internet trend it also has its detractors For retailers the draw to giving out free egift cards for social gifting purposes is that it can increase their sales primarily because they can expect consumers to spend more than the value of the gift card However many times consumers will spend only what is on the gift card and not a dollar more This makes it difficult for some retailers to find the advantage in the short term For large retailers this may not be an issue but smaller businesses participating in social gifting can have a problem turning a profitIt39s also wise to keep the optimism for social gifting in check When Groupon was a private company it was on the list of one of the fastestgrowing companies in history and launched one of the largest IPOs in the past decade However its shares have decreased by about 40 percent since its debut amid concerns of its sustainabilityIf you are receiving this report you are a registered subscriber to Jack Myers Media Business Report or are receiving it as part of a registered corporate subscription As a subscriber Jack responds personally to your emails requests and comments He is available to speak at your company events In addition to Jack Myers Media Business Reports your subscription underwrites MediaBizBloggerscom Women in Media Mentoring Initiative Jack Myers Wall St Report Jack Myers Video Media Report plus our exclusive industry economic forecasts trend forecasts and corporate performance research Redistribution in any form except among approved individuals within your company is prohibited As a subscriber you have full access to all archives and reports at wwwjackmyerscom If you require your ID and password contact maryannjackmyerscom

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