Social Gifting App Wrapp Hits 1 Million Users (Because People Like Free Stuff)

16 Jan, 2013

Social gifting startup Wrapp is today announcing that it has grown its user base to 1 million within 14 months – proof that people really do enjoy freebies, it seems. The company, which allows users to send both free and paid digital gifts and gift cards to friends, also had a busy holiday season, hitting 1 million gifts sent per week during the period. And it saw 100,000 gift redemptions per week by the end of December.

In total, there were 7.4 million gifts given to date, the company tells TechCrunch.

For what it’s worth, Wrapp’s 1 million users, over half of which are U.S.-based, isn’t the same as downloads, but rather means active users who have both downloaded the app and who have sent at least one gift through its service. Most users send more, and the average Wrapp user – the highly coveted female, age 20-35 – sends around five gifts per month.

In its announcement, the company compares its rise to 1 million users by positioning its climb against other well-known startups, which is interesting. Pinterest reached 1 million after 20 months, Twitter and Gilt Groupe after 24 months, and Kickstarter and Airbnb took 30 months, the company says. But these aren’t really apples-and-oranges comparisons, because Wrapp is about gifting layered on top of social, while Pinterest and Twitter are mainly about social. Meanwhile, Gilt is for shopping, Kickstarter is for fundraising, and Airbnb is for travel.

It would be more fair, perhaps, to compare Wrapp with other “gifting” startups, but its biggest competitor in the U.S. would have probably been Karma, which was acquired by Facebook just a month after Wrapp entered the U.S. market. (Wrapp was founded in Sweden, actually). Meanwhile, other competitors like San Francisco-based Giftly or Sincerely’s Sesame are a little bit too new on the scene to make for a worthwhile comparison, and semi-competitor Gyft is focused on physical (i.e plastic) gift cards, not “social gifting.”

And then, of course, there’s what became of Karma: Facebook Gifts, which has a potential market of some 170+ million (though likely only a fraction of that switched on). Plus, outside of iTunes digital gift cards, Facebook is mainly about shipping physical gifts, not virtual ones, like in Wrapp.

The problem here is that the other gifting startups aren’t sharing their user numbers publicly at this point, so these comparisons are hard to come by. (We’ve asked Distimo and App Annie for some numbers, but the companies haven’t yet come through. Will update if they do.)

So why is Wrapp so popular? I suppose that can be summed up in this App Store review: “it’s so easy and most importantly not a scam,” writes an unknown user. When you’re talking about a service that basically offers you free money, and allows you to send free trials, subscriptions, and gift card dollars to friends, you can see why people would be wary.

I mean, really, free money usually sounds like a scam.

But it’s not.

It’s the retailers themselves who are providing the funds for

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