E-Commerce Pulls in $20B for Corrugated Packaging
Thursday, March 28, 2019
Posted by: Alyce Ryan
E-commerce is becoming a significant and high-growth opportunity for the corrugated packaging market to 2023, cites The Future of Corrugated Packaging to 2023 report by Smithers Pira.
Despite the economic slowdown over the past few years that has had a negative impact e-commerce packaging/ on retail sales in general, e-commerce retail sales have continued to show growth, and present a considerable opportunity for corrugated packaging suppliers.
The nature of e-commerce packaging favors the use of corrugated board as a major medium and it is now estimated that upwards of $20 billion worth of corrugated materials are used in this sector as a whole.
And there is room for major growth in this market too. According to eMarketer, e-commerce will grow to nearly 15 percent by 2020.
Smithers Pira forecasts that the overall market for e-commerce packaging will grow rapidly in the coming years, expanding at a compound annual growth rate of 14.3 percent from 2017 to 2022. The growth will see e-commerce packaging — including corrugated packaging, as well as flexible packaging, and protective and transit packaging — reaching almost $55 billion in 2022.
Addressing this fast-changing market will require corrugated packaging suppliers, and the overall packaging supply chain, to meet new (and in some cases, still developing) requirements.
With an increasingly complex logistics chain, e-commerce packages are expected to be handled up to 20 times or more during a standard delivery. Added to the scale of the necessary warehousing and delivery systems for e-commerce, there is therefore considerable demand for robust, cost-effective packaging solutions in this sector.
Additional demands from brand owners are now being felt by the converting industry, as many brands now require the secondary pack to carry their image into the home, not just the retail outlet. This this increases the need for converters to produce high-quality graphic designs on the shippers themselves.
Meanwhile the advent of e-commerce, especially in the grocery sector, is likely to have a slight negative impact on retail-ready packaging (RRP) usage, as e-sales do not require any RRP systems. As well, innovation in e-commerce systems, such as subscription box services and meal kits that offer direct-to-consumer delivery of specialist food using a weekly or monthly subscription model, will have an additional, though slight, impact on the RRP market.
Furthermore, all the sustainability issues facing the corrugated market as a whole come into play even more emphatically in the e-commerce sector, with consumers demanding ease of recycling and returns for their e-commerce purchases.
With e-commerce becoming an increasingly important element of retail, corrugated packaging stands to benefit substantially. As the supply and distribution chain for packaged goods changes, new requirements will emerge for corrugated packaging products.
Published on packagingstrategies.com