Social gifting is the new buzz

A handful of Web-based avenues including Facebook have been working hard over the last several months to build and leverage a new form of business now popularly called social gifting. The social media giant saw enough scope that it decided to snap up Karma, a startup, and enhanced it further into Facebook Gifts. It now serves as a way for its billion-plus users to send across a gift to a friend, whether it’s an iTunes gift card, any item of clothing or a bottle of wine.

Square, a couple of months ago, added gift cards to Square Wallet so as to help its keen battle with PayPal. In the meanwhile, another startup backed by Google ventures, Gyft, has created a mobile system that allows you to manage, purchase and redeem your gift cards. However, the emerging giant clearly in the realm of social gifting is a venture called Wrapp. This Stockholm-based entity counts Reid Hoffman, the Silicon Valley superstar, both as a board member and an investor.

The company has an entirely novel and arguably cleverer business model than others including Facebook Gifts is on a tear. Hjalmar Winbladh, its CEO and co-founder, reveals in an interview that people are sending Wrapp gift cards to Facebook friends at a mind-boggling rate of no less than 1m a week, thanks to an impressive jump in business owing to the holiday season. Of those, people are opting to redeem roughly 100,000 Wrapp gift cards every week – thus making it, one of the most widely used digital wallets in the world according to Winbladh.

Wrapp has already reached the milestone of 1m users, and the start-up has done so within mere 14 months. The company describes this as ‘an immense achievement’ in the domain of online gifting thanks to all of its users who have been sending gifts through it to their friends. The platform is expanding to many more exciting markets, with a goal of boosting sales for the retailers who are increasingly becoming a part of it.

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