Market Trends of UAE Flexible Packaging Industry
This section covers the major market trends shaping the UAE Flexible Packaging Market according to our research experts:
Growth in E-commerce Industry
- The United Arab Emirates is experiencing substantial development due to the rapidly changing technological landscape, rising smartphone and social media usage, and modifications to the nation's conventional online purchasing through e-commerce. Setting up social media stores to trade and sell through social media platforms is a growing trend among small company owners and entrepreneurs.
- Due to the increasing demand, several companies are joining the market through various internet platforms. Food and beverage vendors use a technological strategy to stand out from the competition by launching different food apps for customers. For instance, Agthia Group PJSC, an Abu Dhabi-based food and beverage maker, is shifting to online sales and home deliveries to help offset the COVID-19 pandemic's impact on its business. The company has introduced its e-commerce channel, and sales through retailers' online platforms are growing.
- According to The Department of Economy & Tourism in Dubai, The United Arab Emirates (UAE) is projected to experience e-commerce revenues of around USD 27.08 billion in 2022. E-commerce sales value is estimated to grow by an average of 23 % per year between 2018 and 2022 in the UAE.
- The growing internet penetration rates majorly drive the rise of the e-commerce sector in the region. This has supported market expansion over the past two years, increasing income, high smartphone device ownership rate, the growing presence of international players, and improved supply chain solutions. For instance, according to Telecommunications Regulatory Authority (UAE), internet subscriptions in the United Arab Emirates were around 3.68 million in 2022. Compared to December 2020, this number reflects an increase of about 700 thousand subscriptions.
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Food Industry is Expected to Hold A Significant Share
- Flexible packaging is commonly used for food products, such as smoothies, snacks, dairy, and others. The packaged food market has been witnessing growth in UAE due to innovations in food processing techniques and changes in consumer lifestyles which is expected to fuel the product demand during the forecast period.
- The packaging is resistant to heat and moisture, is spill-proof, and provides excellent barrier properties, which are essential in any food packaging solution. A flexible packaging solution caters to all of this, adding to the extended shelf life compared to rigid packaging. The excellent barrier properties also keep the harmful toxins and UV rays away and provide a protective shield to the inner food product.
- Additionally, numerous companies are investing in the sector in response to the nation's demand for sustainable food packaging. In October 2021, Talabat, an online meal delivery service, announced a sustainable packaging initiative at its two branches in Qatar and the United Arab Emirates to cut carbon emissions and plastic waste. The program is a component of Berlin-based Delivery Hero, the parent business of Talabat, which intends to introduce it initially in eight different international regions.
- According to Network International, the top enabler of digital commerce in the Middle East and Africa, standalone restaurants in the UAE experienced a significant increase in online meal delivery spending as e-commerce payments soared in 2020 as a result of the coronavirus outbreak. Additionally, food delivery restaurants chose to invest in Zoondia, one of the leading app development companies in the UAE, to stay competitive and meet the constantly shifting needs of their customers. The expansion was made possible by the rising internet penetration and increasing sales value of the food service restaurant subsector in the United Arab Emirates.
- This is evident from the fact that, according to the Government of Canada, the fast food restaurants in the United Arab Emirates (UAE) are projected to generate the highest sales value in the restaurant subsector in 2022, which is estimated to reach USD 4.51 billion, compared to USD 3.66 billion in 2018, while full-service restaurants generate sales worth around USD 2.34 billion in 2022, compared to USD 1.94 billion in 2018.
