DropGifts comes to SA

DropGifts, described as a global leader in friend-to-friend gifting, is due to reach South Africa by the end of the first quarter of 2012. Already a market leader in the UK, France and Germany, the Berlin-based company revolves around the concept of social gifting, by enabling Facebook friends to send gift cards to each other from a range of top retailers.

"We're very excited about launching in South Africa. Most international companies don't see the benefit of launching here, but with the relatively high number of Facebook users, South Africa is a perfect market to launch," said Kevin Tucker, MD of DropGifts South Africa. "The gift card market is already a $100 billion market in the US alone and in South Africa it really is growing in maturity. We're seeing all kinds of gifts cards on sale and now we're bringing that to Facebook and smartphones, with the app."

There will be gift cards on offer from a variety of South Africa's favourite brands and retailers. Users will also have the unique ability to pool together as a group of friends and give a group gift card. Because the service uses Facebook to connect users, an added benefit is that it will be easy for South Africans living overseas to send rand-value gifts back home.

For merchants, the service offers a unique, performance-based marketing channel for their brand. The gift card system is a modern way to reach new customers at a considerably lower customer acquisition cost than traditional channels. Research in Germany has also shown that recipients of gift cards spend upwards of three times the gift card value, in-store or online.

Gift cards also provide a significant influx of cash for currently cash-strapped merchants. In contrast to food and beverage sales where 25%-40% of the product cost has been spent prior to sale, 100% of gift card value is available in cash to the merchant until redemption.

Tucker founded PriceCheck, South Africa's leading shopping comparison destination in 2006. MIH Internet Africa subsequently acquired it in 2010. While in the MIH environment, Tucker started up the very popular but short-lived daily deal site, Dealify.