Market Trends of Packaging Industry In The UAE
The Food Segment is Expected to Witness Significant Growth
- The adoption of sustainable packaging is one of the critical trends in the United Arab Emirates that may positively impact the packaging market in the country. Another factor contributing to the country's growth is the consumers' increasing need for convenience. According to the Government of Canada, the country's per capita expenditure on food and beverage products in 2024 is expected to be USD 16,442.7 and is projected to reach USD 17,046.3 in 2025. Increasing expenditure on food products would leverage the studied market.
- The use of food packaging materials in the United Arab Emirates is regulated by the Emirates Authority for Standardization and Metrology (ESMA) to protect consumers and maintain product quality. ESMA regulates the suitability of food packaging materials. It is important to note that food packaging materials should not present any health hazards or contaminate food. Food packaging materials directly in contact with food (plastics, glass, or metals) must meet specific safety requirements.
- The growth of the food service sector across the country drives opportunities in the market. The food service is emerging as a rapidly growing industry owing to a flourishing economy, rising tourism, etc. According to the managing director of HotpackGlobal, the food packaging industry in the United Arab Emirates is expected to be valued at AED 14 billion (USD 3.81 billion) by 2025.
- The highly anticipated Fast Food and Cafe Convention (FFCC), organized by Oddbox, returned to Dubai on November 22, 2023, for its third edition. This annual event has cemented itself as the exclusive platform for the QSR, fast casual, café, and cloud kitchen segments, providing a unique opportunity for networking, collaboration, and innovation.
- Therefore, there is a growing need for innovative and sustainable packaging solutions in quick and full-service restaurants in the United Arab Emirates. Manufacturers can explore opportunities to provide customized packaging designs and create unique and unique brand experiences and solutions that align with the specific branding strategies of different QSRs in the country.
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Growing E-commerce Sector to Significantly Boost the Market's Growth
- One of the major factors boosting the rapid expansion of mobile e-commerce transactions is the accessibility of apps, which has increased pricing transparency. Also, the rising popularity of loyalty reward programs provided by online retailers in the Emirates has increased demand for online shopping.
- The United Arab Emirates has become one of the fastest-growing online markets in the Middle East, led by a tech-savvy population and an ambitious government determined to foster a digital economy. The infrastructure, efficient logistics capabilities, business-friendly legislation, and the potential of Dubai as a leading center for the Middle East e-commerce expansion further enhance its potential. Due to increasing online commerce activities in the entire value chain, Dubai is becoming the preferred destination for e-commerce startups and global businesses to set up their companies.
- Furthermore, to attract more foreign direct investments to the e-commerce sector, the Government in Dubai set EZDubai as a dedicated e-commerce zone in the city's south logistics district, next to the airport's cargo terminals, to save time on the journey to the customer. The zone is connected to Jebel Ali port via a bonded logistics corridor, allowing cost-effective inbound movements through sea freight. This facilitates cost-effective inbound and time-effective outbound and provides customized, tailor-made services to meet companies' specific and individual business requirements.
- According to PPRO Financial Ltd, the leading e-commerce segments include toys, DIY, and hobbies, with 29% of the share taking the top position. Fashion and electronics took the second and third positions with 27% and 18%, respectively. Rising online shopping is expected to promote the market for the packaging industry in the country.
- Global e-commerce companies are also spreading their presence in the region and collaborating with different domestic manufacturers and delivery partners, which boosts the need for packaging in various end-user segments. Ras Al Khaimah Economic Zone and Amazon United Arab Emirates entered a strategic collaboration on October 2023 to ensure domestic businesses established within the hub can sell their products on Amazon.ae, which will serve millions of customers throughout the region.
- The initiative aims to support SMEs by allowing them to use Amazon's expertise to manage a digital economy and grow their online businesses. Moreover, by 2026, Amazon is projected to have 100,000 firms listed on its website in the United Arab Emirates, including local small and medium enterprises that drive the market for different packaging needs. The constant need for products through online modes pushes the sales of end-user sectors, which drives the demand for different types of packaging solutions.
