Social gifting company Wrapp has opened offices in Sydney and begun working with local retailers to create a gift giving social networking experience.

Backed by Skype and LinkedIn founders Niklaus Zennstrom and Reid Hoffman, who are on the board after Wrapp received $10.5 million in Series A funding from Greylock Partners in Silicon Valley and Atomico in London, the venture launched in Sweden last year and has since opened offices in France, Germany, the Netherlands, Taiwan, Japan and the UK.

Wrapp allows users to give, receive and redeem gift cards using mobile devices or the web. Facebook friends can also contribute to presents.

Retailers can benefit from the program which can drive highly-targeted online sales.

“We think gift giving should be an everyday occasion,” says Tony Been, Wrapp’s newly appointed country manager for Australia. “Now, thanks to Wrapp, you can do it simply and instantly with friends and family around the world – and because the gift cards are stored in your phone they’re always with you when you want to buy something you really want.”

In the last four months 170,000 people have given their Facebook Friends more than 1.4 million free gift cards for redemption in about 60 European retailers who’ve reported each sale averages four to six times the value of the free gift card.

“Retailers have been struggling for the last couple of years to find a way to use the latest mobile and social technologies to their business advantage,’ says Hjalmar Winbladh, Wrapp’s CEO.

“Daily deals, they found, dilute their brands and more often than not drive unprofitable sales from consumers who don’t come back without a discount. We think it’s time for retailers worldwide to turn Facebook fans and loyal customers into their best sales force ever and only pay for the service when consumers make a purchase in-store.”