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Challenges and Opportunities in Packaging Industry in China
Datetime: 2016/8/22 16:30:11  Hits:

STABLE VOLUME GROWTH BACKED BY RIGID MARKET DEMAND

Total packaging in China experienced steady volume growth in 2014. This was driven by stronger market demand for healthier food and beverages, such as RTD tea and yoghurt, usually packaged in rigid plastic and liquid cartons, as well as trendier products, such as beer packaged in metal packaging, especially beverage cans, rather than glass bottles. Overall, flexible packaging, in spite of its large base, recorded modest volume growth, thanks to its wide application in varied industries in the review period.

THE PREMIUMISATION TREND CONTINUES

The rising household income and consciousness of personal wellbeing have translated into consumers’ continuous pursuit for quality products with a more premium market positioning. Metal bottles in beer emerged in China with soaring demand in 2014, partially because of the 2014 FIFA World Cup, with many beer brewers launching their special edition beers in metal bottles. High-end skin care, particularly facial care, registered stellar volume growth in glass bottles and glass jars, which are perceived among locals as high-end packaging.

BREAKTHROUGH NEW PACKAGING IN PERSONAL AND HOME CARE DESIGNED TO WOO CONSUMERS

Unlike toothpaste usually packaged in squeezable plastic tubes, Perioe Pumping Toothpaste launched by Beijing LG Household Chemical in April 2014, was packaged in PET bottles with lotion pumps as closures. This is not only convenient in dispensing toothpaste but is also more hygienic. Another new product by Guangzhou Liby Enterprise, Kispa liquid home laundry detergents, making a hand wash laundry debut in 2014, was also packed in PET bottles with lotion pumps as closures, instead of the mainstay HDPE bottles with plastic screw closures. These new products may not have had a far-reaching impact on the overall market in 2014, but may encourage other manufacturers to introduce more new products with convenience-orientated packaging in the forecast period.

INTERNET RETAILING ENHANCES SALES OF LARGE PACK SIZES

The explosive growth in internet retailing positively affected the packaging market in terms of the rising volume sales distributed via this emerging channel as well as robust sales of products in larger pack sizes, such as dry dog and cat food in 10,000g, 12,000g and 15,000g sizes. Manufacturers, on the other hand, also introduced internet-exclusive pack sizes to take advantage of the convenient home delivery service offered by internet retailers, such as 1,500ml Safeguard shower gel from Procter & Gamble, distributed via the company’s official online store, whereas the normal pack sizes in store-based retailing are 1,000ml and 720ml.

FORECAST PERIOD PERFORMANCE SET TO BE UPBEAT FOR PACKAGING

The overall performance of the packaging market in the forecast period is set to be healthy, driven by the steady growth in the consumer goods market, including packaged food, beverages, home care and beauty and personal care, alongside the steadily rising household income and pursuit of a better lifestyle. The forecast volume CAGR of total packaging, however, is likely to be outperformed by the volume CAGR in the review period, owing to an already large base. Nevertheless, the forecast volume CAGRs of ready meal trays and aluminium trays are likely to outpace their performances in the review period, thanks to the possible take-off of the ready meals market thanks to the faster life pace in China and increasing purchase of wet dog and cat food, respectively.

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