Market Trends of India Rigid Plastic Packaging Industry
This section covers the major market trends shaping the India Rigid Plastic Packaging Market according to our research experts:
Rising E-Commerce Sales is Expected to Drive the Packaging Market
- India has witnessed a rapid surge in e-commerce over the last 5-6 years. This growth is attributed to an increase in internet and smartphone penetration and the ongoing digital transformation in the country. Furthermore, social distancing during the COVID-19 pandemic also added to the significant growth of the market.
- This massive growth in e-commerce positively impacted the Indian packaging industry. According to the Indian Institute of Packaging (IIP), packaging consumption in India increased 200% in the past decade, from 4.3 kg per person per annum to 8.6 kilograms per person per annum.
- As per the types of packaging materials, more than 50% of the sector is dominated by plastic, followed by paper, paperboard, and glass. The food processing sector has become the largest consumer of packaging, followed by pharmaceutical and personal care products through e-commerce.
- The e-commerce market has experienced a tremendous demand for all sorts of healthcare packaging and related substrates, including rigid plastics and pumps. Similarly, demand for packaging for nutritional supplements like vitamins and other supplies required by customers in a pandemic situation has skyrocketed.
- According to IBEF, the sales of the e-commerce market in India were valued at around USD 61.56 billion in 2021 and were estimated to record about USD 74.8 billion by 2022. Further, it is anticipated to reach USD 350 billion by 2030. Such growing e-commerce sales may drive rigid plastic packaging manufacturers to adopt e-commerce services to witness significant growth rates.
- Further, future retail growth is quite likely to grow due to the e-commerce boom, which also fuels the development of the rigid plastic packaging sector. Customers now prefer e-commerce more than they did before, primarily due to technological advancements. The rigid plastic packaging industry is decreasing its supply by developing technologically and adapting to the different issues presented by e-commerce compared to traditional sales channels. Packaging companies' products must be durable enough to withstand the complex manual and automated supply networks required to deliver items to customers' doorsteps. Due to the expansion of e-commerce, the market for rigid plastic packaging has a sizable potential.
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Food Segment is Expected to Hold a Significant Market Share
- The food packaging industry in India is one of the major sectors. It is expanding due to the country's response to changing lifestyles and demographics, the accessibility of a cheap labor force, the unrestricted availability of raw materials, the expansion of export opportunities, and government initiatives to promote the growth of the food packaging industry. The pandemic, an increase in disposable income that increases appetites for discretionary purchases of branded goods, mainly processed food products, a revitalized retail sector, and state sponsorship contributed to the expansion of food packaging in the country.
- Packaged foods are becoming increasingly popular in India with the increased number of working women and a shift toward on-the-go consumption due to hectic schedules. As a result, the use of creative and environmentally friendly packaging in the food industry is predicted to rise, which may fuel market expansion for rigid plastic food containers over the coming years.
- In addition, factors including the nation's booming economy, favorable solid demographics, rising disposable income, growing consumer awareness, and increasing demand for processed foods are boosting the growth of the rigid plastic packaging market.
- Due to the hectic pace of life in metropolitan centers, an increase in income, and a higher standard of living, the industry is also benefiting from the growing trend of online meal delivery combined with packaged food. With rising acceptance and innovation of packaging, incumbents like Zomato, Swiggy, and Dunzo are exploring the online food delivery business.
- Zomato and Swiggy are a few of the prominent online food delivery apps with significant market shares in the Indian online food delivery market. Indian food delivery firms lose money on most orders due to high delivery costs and discounts. Hence packaging material is one of the critical aspects considered economically serving the purpose of packaging hot food. Therefore, the companies mainly offer the food in rigid plastic containers, which can serve their purpose of optimal costs and maintaining the freshness of the food.
- As per the company financials, in 2021, Zomato generated a revenue of INR 19.94 billion (USD 0.24 billion), while Swiggy generated INR 25.47 billion (USD 0.31 billion). The significant sales from prominent food delivery brands may create more opportunities for rigid plastic packaging companies, which serve the packaging purpose and enhances the aesthetics.
