Asia Pacific Contract Packaging Market Size

APAC Contract Packaging Market Analysis

The Asia Pacific Contract Packaging Market is expected to grow at a CAGR of 12% over the forecast period. With the COVID-19 outbreak, the contract packaging market witnessed tremendous growth as e-commerce boomed due to lockdown and social distancing norms. In those days, most consumers prefer online shopping channels, and companies are outsourcing their packaging end-to-end or standalone services to meet the growing demand.

• Asia-Pacific contract packaging market growth is mainly influenced by the changing manufacturing firms' preferences, who usually outsource packaging activities to third-party players. It is because manufacturers are increasingly focusing on cost optimization and their core business.
• Contract packaging provides several advantages. Firstly, it reduces the operational costs of the manufacturers. The operating costs can be reduced by 7% to 9% by outsourcing packaging activities to contract packagers due to the reduced costs of machines and lowered labor costs.
• The customers in the market look for bonded zones for co-packaging in China. Some bonded zones include coastal zones such as Guandong, Zhejiang, Shanghai, and Futian. They have robust trade and port networks, no Customs Duty for products made out of China, No Export Licensing Issues, and No Supplier-Client Tracking. Some significant vendors operating in bonded sones are GPA Global, Asiapack, and Presence Asia Group.
• India is currently witnessing an increase in demand for contract packaging due to the sudden surge in medication consumption and increased vaccine production from various pharmaceutical industries. The Serum Institute of India (SII), one of the largest vaccine producers, manufactures AstraZeneca's Covishield and another formulation developed by US rival Novavax Inc. It increases opportunities for vendors in the market to introduce filling services to cater to the increased vaccine production during the second COVID-19 wave. There is also an impact of the Russia-Ukraine war on the overall packaging ecosystem.
• Australia is also witnessing robust growth for co-packaging services, with significant developments and investments made by various pharmaceutical industries worldwide. For instance, PCI Pharma Services (PCI) acquired Australia-based Pharmaceutical Packaging Professionals (PPP), one of the leading packaging, storage, distribution, and trial manufacturing providers. It caters to the need for commercial co-packing services in the region.
• In the current scenario, manufacturers require a variable cost structure based on volume. This volume might differ from a small quantity ranging from 100 l to a large one. However, packaging a minimum order might result in a loss for contract packagers, owing to its total costs, which could lead to manufacturers needing more time to outsource their projects.