The China Paper Packaging Market is expected to register a CAGR of 4.68 % during the forecast period (2022 - 2027). Paper packaging is a cost-efficient and versatile method to protect, preserve, and transport a broad range of products. Additionally, it can be customized to meet customers' needs or product-specific requirements.
- The Chinese paper packaging market is heavily influenced by variables such as rising per capita income, changing social atmosphere, demographics, and growing emphasis on sustainable products. As a result of this shift, new and innovative packaging materials, processes, and forms are required.
- Sustainability, specifically regulatory and public concerns about single-use packaging waste, are combined with other powerful trends to drive significant shifts in consumer packaging. Regulators are acting, and Fast-Moving Consumer Goods (FMCG) companies and retailers are taking crucial steps to improve the sustainable development of their packaging and fundamentally reconsider their packaging systems.
- Further, to meet consumer demands, food and beverage manufacturers are making efforts to provide sustainable materials and packaging, functional and convenient displays, and healthier food options. Paper bags are becoming increasingly popular in restaurants, hotels, and cafes, among other food establishments. Similarly, the growing popularity of on-the-go meals and online food delivery services has increased the demand for paper bags in food service.
- As one of China's most significant industrial sectors, the pulp and paper industry significantly impacts China's forests. According to the Global Forest Watch, 0.53 million hectares of annual tree cover are lost in China.
- As a result of the COVID-19 outbreak, Chines consumer behavior has changed substantially. Buyers are more concerned about products' hygiene, disability, and sustainability than ever before. The shoppers' evolving needs and a consumer-focused approach will remain crucial as this crisis continues. Consumer behavior will continue to change in the forecast period as the market simultaneously acclimates more to the current scenario. Thus, the post-COVID-19 future for paper packaging looks to increase in demand.
Key Market Trends
Food Expected to Hold Significant Market Share
- China is the most important market for food packaging, accounting for half of the regional market. The presence of significant manufacturers around China can be credited for this. Furthermore, a better lifestyle and increased consumer spending on packaged foods may boost regional product demand.
- Additionally, paper bags meet the consumer demand for secure, leak-proof, and recyclable packaging. Paper bags are gradually replacing plastic packaging solutions in areas where takeout and online food delivery are becoming popular. Paper packaging is expected to also cater to the increasing demand from the food and beverage sector.
- Furthermore, as the e-commerce industry has grown, so has the use of packaging materials. In contrast, the food and beverage industry has taken the lead, with an increasing number of companies revising their packaging strategies. Food and beverage companies are looking for environmentally friendly alternatives to traditional packaging materials.
- Because of their eco-friendliness, paper and paperboard-based material are one of the earliest and most widely used packaging forms for food products such as milk and milk-based products, beverages, dry powders, confectionery, and bakery products, among others. Paper and paperboard are commonly used for ice cream cups, microwave popcorn bags, baking paper, milk cartons, and fast food containers, such as pizza, beverage cups, and so on.
- According to China Green Food Development Center, the export value of organic food from China will be approximately USD 2.91 billion in 2021. The overall domestic sales value of organic food in China in the same year was yuan 521.86 billion.
Growth in E-commerce Sales in China Driving the Paper Packaging Market
- The increased raw material prices in recent years have encouraged recycling in China, particularly in the E-commerce business. China is one of the largest global e-commerce economies. With rising mobile and internet penetration in the country, the E-commerce industry is expected to outperform others in terms of paper packaging demand.
- SIG announced the completion of the second aseptic packaging production unit in China in August 2021. SIG's packaging plant is maintaining the LEED gold certification standards. The plant has printing, creasing, cutting, extrusion, and sealing capabilities, allowing customers to tailor their products.
- The e-commerce market in China is already established in a good place and has been witnessing further growth over the past few years. Over the projection period, the rise of e-commerce giants such as Alibaba Group and JD.com is expected to fuel the paper packaging market in China. In 2021, Alibaba and JD.com racked up around USD 139 billion of sales across their platforms on China's Singles Day shopping event, which lasted for ten days, setting a new record.
- The growing urban population, developing e-commerce package industry, dropping pulp prices, and improving population awareness about environmentally friendly packaging are expected to propel China's paper packaging market. Furthermore, the industry's key trends and developments are increased folding cartons consumption, capacity, and technological breakthroughs. However, some obstacles, such as tight rules and product quality, can stifle market expansion.
- Moreover, the demand for paper pulp is increasing in China, the fastest-growing paper per capita user. The increase in the paper packaging sector in China is further governed by the booming retail and e-commerce industry and a boost in demand for environmentally friendly packaging products in the region. Furthermore, Significant growth in the number of online shopping platforms and online shoppers, changing consumer attitudes regarding sustainable packaging, and implementing of favorable government policies have increased the demand for paper packaging products.
The China Paper Packaging Market is fragmented. It is a highly competitive market with a number of players in the market. The companies in China, such as Nine Dragons Paper (Holdings) Limited, Shandong, Chenming Paper Holdings Ltd, Shandong Sun Holding Group, SIG, and Shanghai Custom Packaging Co., Ltd, among other companies, keep on innovating, acquiring, investing, and entering into strategic partnerships in order to retain their market share.
- January 2022 - SIG acquired Pactiv Evergreen's carton packaging and filling machinery businesses in Korea, China, and Taiwan, known as Evergreen Asia, for USD 335 million. The company offers filling machines, cartons, closures, and after-sales services to the fresh segment, primarily for milk. SIG plans to launch more innovative and sustainable packaging formats in the fresh dairy market following the acquisition, leveraging its local research and development presence.
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