China Corrugated Packaging Market - Growth, Trends, COVID-19 Impact, and Forecasts (2023-2028)

The Chinese corrugated packaging market is expected to register a CAGR of 4.1% over the forecast period. In China, mobile devices accounted for around 69% of all e-commerce transactions as of 2021; by 2025, the percentage is projected to reach 75%. Smartphones are becoming the go-to device for many Chinese customers when they make online purchases.

Key Highlights

• Corrugated boxes are becoming the material of preference for online-based delivery channels due to the rising need for sustainability. The global corrugated packaging market is expanding due to the increasing demand. According to the National Bureau of Statistics of China, in the following years, the corrugated packaging market will experience considerable expansion due to the expanding use of corrugated boxes in numerous industries, including food and beverages, consumer electronics, pharmaceutical, and homecare goods sectors. In 2021, online commerce transactions in China reached CNY 13.09 trillion (~USD 1.8 trillion), representing 11.3 % year-on-year growth. The e-commerce market in China has maintained steady growth in recent years.
• Amazon uses corrugated board boxes as its primary packaging material, making the e-commerce sector a key participant in recent years. As Thailand's worries about packaging waste grow, the government will likely be forced to enact legislation encouraging individuals to use environment-friendly packaging solutions, such as corrugated boxes or folding cartons. This will boost the market growth.
• Over the past several years, developed regions have seen a surge in their use of gadgets and appliances, and China has been a significant exporter of electronics worldwide. Owing to their high level of sensitivity, these appliances need to be shielded from external harm and shock. Such requirements present profitable prospects for suppliers of corrugated packaging in the country. Despite the encouraging growth trajectory, the availability of substitutes like bioplastics might, in some instances, provide barriers to the expansion of the business. In addition, according to the National Bureau of Statistics of China, the per capita expenditure of private urban households in China on household items and services in 2021 was CYN 1,820 (~USD 285.61), up from CNY 1,640 (~USD 257.36) in 2020.
• However, increasing sustainability issues, growing environmental concerns, and rising raw material prices might hinder market growth in the long run. Also, the availability of another packaging alternative might affect the market growth.
• The rise in demand for packaged food and the escalating need for corrugated packages in expanding e-commerce shipments were some crucial COVID-19 outbreak-related market drivers. During the pandemic, the demand for supermarket packaging, healthcare items, and e-commerce shipping grew significantly. At the same time, demands for luxury, industrial, and B2B transport packaging decreased. The Russia-Ukraine war has also impacted the overall packaging ecosystem.

China Corrugated Packaging Market Trends

Strong Demand from the E-commerce Sector

• The e-commerce sector in China has grown at an above-average rate in recent years. According to the Ministry of Commerce, China, the gross items purchased online in 2021 stood at CNY 13.1 trillion (~USD 1.87 trillion) compared to CNY 10.8 trillion (~USD 1.55 trillion) worth of physical goods. Earlier, CNNIC had estimated that by 2021, China would have more than 800 million internet buyers. Such numbers are expected to boost market growth in the forecast timeframe.
• Also, according to NetEase, the anticipated range for the worldwide digital buyer penetration rate in 2021 was 65.2%. In contrast, 81.6 % of Chinese consumers were active online. In 2021, there were more than 842 million internet buyers in China.
• Additionally, Chinese e-retail Tmall (a division of Alibaba) and JD.com held the highest market shares. Although the yearly growth rate of B2C e-commerce sales slowed, it still expanded by approximately 10% in 2021. As of the first quarter of 2022, Suning, JD, and Tmall were some of the top B2C e-commerce merchants in China, according to Sohu.
• Despite the global coronavirus pandemic, China witnessed a 14.8 % increase in retail e-commerce sales year-on-year. Online shopping is widely available in China due to the country's fast internet usage. This suggests that Chinese internet users are increasingly buying smartphones or tablets in addition to the growing use and availability of mobile devices. The coronavirus pandemic that began in early 2020 changed the face of e-retailing in China. New online-to-offline retail enterprises, including fresh e-commerce, online food delivery, and community group-buying services, flourished due to social restrictions and lockdown measures. This boosted the e-commerce market and fueled China's demand for corrugated packaging.

Household Segment Expected to Hold Significant Market Share

• China's household appliance market has expanded to become a multi-billion dollar sector. The market volume for Chinese electrical household appliances reached over 4 billion between January-October 2021. Chinese enterprises that manufacture household electronics are becoming more significant players in the global market as the home appliance market in China grows. Also, with a projected total sales value of USD 50.6 billion in 2022, the Chinese business Midea Group has been the most significant global household appliance manufacturer worldwide since 2014. Other notable companies include Gree Electric Appliances and Electrolux Group, with total sales values of USD 27.88 billion and USD 14.63 billion, respectively.
• Additionally, China's per capita spending on private families' purchases of consumer goods and appliances has surged from CNY 110 (~USD 23.74) in 1990 to CNY 1,820 (~USD 271) in 2021. Rising individual income levels and expanding urbanization are the key drivers of market expansion for Chinese household appliances, eventually boosting the demand for corrugated packaging in China.
• The development of smart appliances due to technological improvements is anticipated to fuel China's domestic appliance market expansion. In the majority of household appliances, smartness has become a USP. As Wi-Fi-capable gadgets become more prevalent, smart appliances are transitioning from standalone goods to established settings with interconnected products. Appliances like refrigerators, dishwashers, and washing machines are expanding quickly. This will boost the growth of corrugated packaging in the estimated timeframe.
• Moreover, the growing demand for smart electrical home appliances is expected to boost the demand for corrugated packaging. These electrical items are delicate and prone to damage if exposed to moisture. According to Eastmoney.com, China's smart electrical home appliances in the year 2021, amounted to approximately CNY 576 billion (~USD 82.39 billion) compared to CNY 224 billion (~USD 32.04 billion) in 2016.

China Corrugated Packaging Market Competitor Analysis

The China Corrugated Packaging Market is fragmented due to numerous local and global vendors in the market. To accelerate the development of corrugated packaging in China, market players are incorporating various strategies, such as vertical and horizontal integration and product expansions. Some of the prominent domestic vendors operating in the market are Shanying Paper Co. Limited, Hung Hing Printing Group Limited, Nine Dragons Paper Holdings Limited, Belpax, and Shanghai DE Printed Box, among others.

In November 2022, recycled packaging board producer, Nine Dragons, announced its plans to expand board production rapidly in 2023. The company plans to start 4.77 million tonnes of new capacity by 2023, along with launching virgin carton-board production.

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