Market Trends of GCC Corrugated Box Packaging Industry
Increased Demand from the E-commerce Sector for Lightweight Packaging Materials
- The spread of e-commerce has dramatically changed the retail market. However, this megatrend that has changed the dynamics of consumer behavior and retail business models is witnessing growth in the GCC and offers significant potential for industry players. The GCC's main drivers of e-commerce growth are high per capita income spending potential, well-developed transportation and logistics networks, increased internet penetration, and technology.
- The corrugated packaging industry's primary product trends and innovations are lightweight containerboards with less essential weight. It significantly helped in the reduction of freight costs. Additionally, innovative design, which provides superior printing and cost savings through effective volume utilization, has also driven the industry.
- The industry in GCC is characterized by its strong use in the food industry. Consumers tend to look for cost-effective, sustainable, lightweight, reusability, recyclability, and convenient products, which helps drive demand for corrugated packaging in food products. The rising demand for packaging foods in portable and convenient formats has helped drive the use of packaging products across various industries. Recyclability and decomposability make corrugated packaging more sustainable than other materials.
- Saudi Arabia's start-up online grocery store Nana Direct raised USD 18 million to fund ambitious plans to capitalize on this quick change in shopping culture. The regional market has responded quickly to this demand, with new platforms, like Dubai Store in the UAE, emerging and existing retailers expanding to meet consumer needs. Food ordering apps are aggressively marketing more restaurants and cafés and advanced secondary packaging solutions for convenient and safe online delivery.
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Saudi Arabia to Occupy Significant Market Share
- The growing demand for customer-friendly packages and heightened product protection is expected to boost corrugated packaging as a viable and cost-effective solution in Saudi Arabia.
- Saudi Arabia is one of the GCC region's leading markets in the packaging industry. The country has a consumer base and a wide range of industrial activities (apart from the oil and gas sector), adding to the rapid growth in the demand for paper and paperboard packaging. For instance, in February 2022, Eastern Pak Limited joined a multinational logistics company and a leading courier and package delivery service player to work toward their eco-friendly and sustainability goals with innovatively customized corrugated bins while ensuring all organization and safety standards.
- According to recent data from the Saudi Industrial Fund (SIDF), a significant shift in the development of the industrial sector is indicated by the massive change in the country's sectoral composition.
- Moreover, according to SDIF, there were around 791 food manufacturing facilities, 173 beverage manufacturing facilities, 94 textile manufacturing facilities, 102 apparel manufacturing facilities, and 45 pharmaceutical manufacturing facilities in the country, which account for 16% of the total industrial manufacturing establishments in Saudi Arabia. All these industries significantly contribute to the increasing demand for corrugated packaging products.
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