China Corrugated Packaging Market Trends

Market Trends of China Corrugated Packaging Industry

Strong Demand from the E-commerce Sector

• The e-commerce sector in China has grown at an above-average rate in recent years. According to the Ministry of Commerce, China, the gross items purchased online in 2021 stood at CNY 13.1 trillion (~USD 1.87 trillion) compared to CNY 10.8 trillion (~USD 1.55 trillion) worth of physical goods. Earlier, CNNIC had estimated that by 2021, China would have more than 800 million internet buyers. Such numbers are expected to boost market growth in the forecast timeframe.
• Also, according to NetEase, the anticipated range for the worldwide digital buyer penetration rate in 2021 was 65.2%. In contrast, 81.6 % of Chinese consumers were active online. In 2021, there were more than 842 million internet buyers in China.
• Additionally, Chinese e-retail Tmall (a division of Alibaba) and JD.com held the highest market shares. Although the yearly growth rate of B2C e-commerce sales slowed, it still expanded by approximately 10% in 2021. As of the first quarter of 2022, Suning, JD, and Tmall were some of the top B2C e-commerce merchants in China, according to Sohu.
• Despite the global coronavirus pandemic, China witnessed a 14.8 % increase in retail e-commerce sales year-on-year. Online shopping is widely available in China due to the country's fast internet usage. This suggests that Chinese internet users are increasingly buying smartphones or tablets in addition to the growing use and availability of mobile devices. The coronavirus pandemic that began in early 2020 changed the face of e-retailing in China. New online-to-offline retail enterprises, including fresh e-commerce, online food delivery, and community group-buying services, flourished due to social restrictions and lockdown measures. This boosted the e-commerce market and fueled China's demand for corrugated packaging.

Household Segment Expected to Hold Significant Market Share

• China's household appliance market has expanded to become a multi-billion dollar sector. The market volume for Chinese electrical household appliances reached over 4 billion between January-October 2021. Chinese enterprises that manufacture household electronics are becoming more significant players in the global market as the home appliance market in China grows. Also, with a projected total sales value of USD 50.6 billion in 2022, the Chinese business Midea Group has been the most significant global household appliance manufacturer worldwide since 2014. Other notable companies include Gree Electric Appliances and Electrolux Group, with total sales values of USD 27.88 billion and USD 14.63 billion, respectively.
• Additionally, China's per capita spending on private families' purchases of consumer goods and appliances has surged from CNY 110 (~USD 23.74) in 1990 to CNY 1,820 (~USD 271) in 2021. Rising individual income levels and expanding urbanization are the key drivers of market expansion for Chinese household appliances, eventually boosting the demand for corrugated packaging in China.
• The development of smart appliances due to technological improvements is anticipated to fuel China's domestic appliance market expansion. In the majority of household appliances, smartness has become a USP. As Wi-Fi-capable gadgets become more prevalent, smart appliances are transitioning from standalone goods to established settings with interconnected products. Appliances like refrigerators, dishwashers, and washing machines are expanding quickly. This will boost the growth of corrugated packaging in the estimated timeframe.
• Moreover, the growing demand for smart electrical home appliances is expected to boost the demand for corrugated packaging. These electrical items are delicate and prone to damage if exposed to moisture. According to Eastmoney.com, China's smart electrical home appliances in the year 2021, amounted to approximately CNY 576 billion (~USD 82.39 billion) compared to CNY 224 billion (~USD 32.04 billion) in 2016.