Packaging

E-commerce packaging gets a boost

Covid-19 has broadened the consumer base using e-commerce

The global value for e-commerce packaging will reach $51.7 billion in 2020, as Covid-19 induced lockdown and shop closures have pushed more consumers online, a report by Smithers revealed.

This projection represents an increase of $14.0 billion compared to the $33.7 billion market of 2019, the report found.

An in-depth analysis in the new Smithers study – The Future of E-commerce Packaging to 2025 – shows consumption will be around 40  per cent higher in 2019. “As consumer habits change, business models adapt, and more retailers close physical stores; demand for e-commerce packaging will continue to boom through to 2025 at an accelerated compound annual growth rate (CAGR) of 17.0 per cent. In 2025 this market will reach a value of $113.5 billion, over 10 per cent of the total packaging market worldwide,” the report said. 

This makes e-commerce as one of the most important and exciting market opportunities for packaging converters and material suppliers. The market analysis sub-divided this segment by e-commerce packaging format (corrugated board; flexible paper, plastics, and foil packaging; mailers; protective components); end-use application, and geographic market.

“All e-commerce formats will see double digit CAGRs through to 2025. Corrugated is the most valuable segment of the e-commerce packaging market,” the report found. “Value will rise from $30 billion in 2019 to $41.6 billion in 2020 and is forecast to more than double again by 2025 as it witnesses the fastest growth of all e-commerce formats,” it added. 

The Smithers analysis also identified some key changes in the market that would define future profitability for packaging suppliers and converters in e-commerce. In 2019, clothing, fashion accessories, and consumer electronics were already well established in e-commerce channels. In 2020 the market expanded with high volumes of groceries, sports equipment, cosmetics and personal care items being shipped. This is prompting demand for new packaging solutions that can protect goods in shipment, and provide a connection to the at-home consumer.

“Covid-19 has broadened the consumer base using e-commerce, beyond millennials and digital natives to include older age groups. Many will continue to use this sales channel even when lockdown (shelter-in-place) orders are withdrawn, fundamentally reshaping the retail landscape,” the report said.

According to the report, a major value-adding service for packaging suppliers and converters are delivery formats that enhance consumer experience. This includes brand printed packaging; pre and post-ordering customised packs; and innovative designs that differentiate a product by giving it a unique ‘unboxing’ experience on delivery

“Sustainability is also an important, if secondary consumer concern. This is prompting the use of more bespoke designs that eliminate unnecessary protective packaging, and new material concepts, such as fully pulp-based, easy-to-recycle mailers,” the report stated.

It also found that reliability, speed of delivery and hassle-free returns are leading priorities in online shopping; and will shape the design of specific e-commerce and omni-channel packaging in the future

“Existing e-commerce trade is being supplemented by subscription platforms, more mobile-based sales, and even voice ordering via software like Alexa. This is forcing brands to reconsider packaging designs to appeal even when seen on a tablet or smartphone screen,” the Smithers report noted.