Market Trends of Nigeria Packaging Industry
This section covers the major market trends shaping the Nigeria Packaging Market according to our research experts:
Rapidly Growing E-commerce Industry
- Nigeria is witnessing a boom in the e-commerce industry owing to growing urbanization and consumer spending, growth in internet users, and the emergence of several startups in the region. The growing e-commerce industry in the country is expected to increase the demand for packaging solutions, such as plastic packaging, carton boxes, corrugated packaging, and many more.
- Moreover, due to the COVID-19 pandemic, consumers increasingly resort to e-commerce to purchase essential daily items, such as groceries and medicines. These trends are expected to boost the demand for packaging solutions in the country. For instance, the e-commerce platform, Jumia, partnered with the manufacturer of essential goods, RB, to help consumers access hygienic products at the lowest price. Such initiatives are expected to boost the country's demand for sustainable packaging solutions.
- In October 2021, Sandbox announced that it had raised USD 1.8 million to help small businesses that are struggling to deliver products efficiently to their customers and fulfill their e-commerce needs using a mix of technology and offline methods.
- Nigeria needs to capitalize on the inherent opportunities in the e-commerce value chain, owing to insufficient investment, insufficient information on the sector's opportunities, and the government's inability to provide the necessary enabling environment. In response, to reduce the dependence on oil as a major foreign earning and tap the opportunities in e-commerce, the government announced plans to increase investment in e-commerce to hit a USD 75 billion revenue projection by 2025 which is expeced to positively impact the demand of packaging solutions.
- Furthermore, according to the country's e-commerce market outlook released by the ministry of industry, trade, and investment, the number of online shoppers in Nigeria is expected to hit 122.5 million by 2025 from 76.7 million in 2021. Such investment by e-commerce companies, the government's plan to increase the investment in the e-commerce sector, and growth in the number of online buyers in the Nigerian market is likely to create a demand for different packaging solutions, especially paper & paperboard, and plastic packaging solutions.
Understand The Key Trends Shaping This Market
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Growing Demand from Retail Industry
- With a growing population and a steady recovery from the pandemic, the retail industry in Nigeria has shown a growing demand for retail goods with a promising path of growth and expansion contributing a significant share to Nigeria's GDP.
- An increase in the number of challenges key brands and new market entrants offering lower-priced products in key categories as consumers become increasingly price-conscious and more eager to experiment with new, lower-priced products. Thus, the manufacturers are adopting the trend of smaller packs for the various product categories. Further, due to the pandemic, spending on food and essential goods increased considerably, positively impacting the packaging market in Nigeria.
- Moreover, According to the National Bureau of Statistics (NBS), in 2021, domestic merchandise exports from Nigeria amounted to over USD 43.8 Compared to 2020, which was around USD 28.1 billion. Most of the goods exported from Nigeria are produced locally.
- In August 2022, Tana Africa Capital and Sango Capital announced an investment in Sundry Markets, one of Nigeria's fastest-growing modern grocery retailers. The transaction marks a partial realization of the capital invested in the company by Sango Capital through its Fund I and a new investment by Sango through its Fund III and by Tana Africa Capital through its second Fund. Sango Fund I's investment began in partnership between Sango and Sundry Markets to spur the development of one of Nigeria's fastest-growing modern grocery retailers.
- As Sundry Markets operate a brand of supermarkets and convenience stores, providing a superior shopping experience to customers and a one-stop destination for prepared and packaged food, fresh baked goods, fruits and vegetables, butchery products and beverages, as well as personal and home care products across different store formats which is expected to create significant demand for packaging solutions.
