Market Trends of India Paper Packaging Industry
Corrugated Boxes to Dominate the Market
- The expanding e-commerce sector primarily drives the Indian market for corrugated boxes. In addition, the widespread use of fast-moving consumer goods (FMCG), such as household goods, beverages, medications, and toiletries, further accelerates market expansion. In addition, the leading manufacturers have designed corrugated boxes in various sizes and shapes in response to consumers' growing preference for lightweight and innovative packaging materials.
- E-commerce, which rapidly transforms the retail sector, directly impacts India's demand for corrugated boxes and containerboard. According to IBEF, the Indian e-commerce market is anticipated to surpass the United States and become the world's second-largest by 2034. It is accepted that India's online business market is expected to reach USD 350 billion by 2030. Additionally, investment in e-commerce companies has increased due to the recent rise in digital literacy, providing new opportunities for new players looking to establish a base.
- Moreover, on November 11, 2021, the government launched the production-linked incentive (PLI) scheme to incentivize businesses in 10 industries to boost domestic manufacturing and exports to control the disruption in the supply chain scenario. Atmanirbhar and structural changes are other factors that should improve India's packaging industry's growth potential. Additionally, the market for corrugated boxes in India needs to raise prices by 35% to offset increases in the cost of kraft paper and conversion to survive the current circumstances, according to the Western India Corrugated Box Manufacturers Association.
- Direct-to-consumer (D2C) brands in food, cosmetics, fashion, and consumer electronics have also contributed to this rise in demand. By using a D2C approach and interfacing clearly with the expanding number of digital shoppers, these new-age digital-first brands are now challenging established brands. Such instances are expected to drive market growth in India.
- Corrugated boxes are one of the most commonly used types of packaging for shipping and storage, and demand for these boxes has increased in recent years due to the expansion of e-commerce and online shopping. Startups are investing in corrugated boxes, which can assist in meeting demand and fuel the expansion of the paper packaging business. For instance, in March 2023, Rewynd, a packaging e-commerce studio, was introduced by Agarwal Enterprises. Rewind, a startup based in Mumbai, has introduced a low MOQ custom packaging solution studio. A large variety of labels, stickers, corrugated boxes, rigid boxes, and other products that are crucial for startups are available from Rewind, an online packaging studio. Rewynd's debut may contribute to expanding the corrugated box industry in India by addressing startups' special requirements, offering customization opportunities, and expediting the packaging procedure.
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Food Industry Holds Major Market Share
- Paper and paperboard are among the most common materials for packaging food. Paper is an eco-friendly option for packaging, making it an ideal choice for food. It is predominantly used for packaging in direct contact with food and for transporting and storing primary packages. Also, paper and paperboard are used in making microwave popcorn bags, baking paper, and fast-food containers. All this is expected to promote growth in paper packaging in India. India's market growth in paper packaging is anticipated to be driven by high consumer awareness of packaged food and exceptionally packaged food delivery.
- Most consumers lead on-the-go lifestyles. As a result, they are continuously seeking simpler foods to pick up, handle, eat, or carry. Brands are working harder to make food packaging portable to address this need. Packaging manufacturers depend on paper packaging for food products because it is extremely lightweight and easy to carry. Moreover, Indian food packaging has become more environmentally friendly in recent years. Big firms have abandoned single-use plastics in favor of biodegradable, recyclable, or reusable packaging due to their desire for eco-friendly solutions.
- The robust export activities of the country also created a need for storing processed items, leading to a demand for metal food cans. For instance, according to the Ministry of Commerce and Industry of India, the country's export of consumer food products that are ready to eat, such as Ready to Serve (RTS), Ready to Eat (RTE), and Ready to Cook (RTC), registered significant growth in the last decade. This export increased by over 23% to USD 1,011 million from April to October (2021-22), compared to USD 823 million reported from April to October (2020-21).
- Owing to the strict reforms by the Indian government, coupled with consumers' increased concern about health and safety and the robust sale of food products from the online platform, this has collectively contributed to the demand for paper packaging of food products, and this trend is expected to move positively in the forecast period as well.
