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South Africa Protective Packaging Market - Growth, Trends, COVID-19 Impact, and Forecasts (2023-2028)

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  • 99 Pages
  • April 2023
  • Region: South Africa
  • Mordor Intelligence
  • ID: 5764853
The South African protective packaging market is anticipated to register a CAGR of 5.08% during the next five years. The industry is expected to grow due to the rising sustainability trend in the coming years. Further, the rapid expansion of the e-commerce sector is anticipated to fuel the growth of the market over the coming years.

Key Highlights

  • South Africa, one of the emerging countries in the African region, focuses on improving packaging solutions. The demand for and production and sale of protective packaging solutions have increased nationally due to the growing manufacturing activity across various sectors. Foam, plastic, and paper-based protective packaging solutions are in high demand from market participants to fulfill the needs of a broad range of products and extended supply chains.
  • Consumers' growing preference for online shopping in the country is causing changes to product design, packing, picking, fulfillment, and shipping. Because of this, one of the most critical challenges is product protection. The approach that most businesses select as the optimal solution is primarily changing due to the rapid expansion of e-commerce and the technical developments in material packaging possibilities. Performance, cost factors brought on by material advancements, packaging requirements, on-demand package creation methods, and sustainability are the primary factors taken into account.
  • The proper selection of protective packaging solutions is mainly determined by the type of product and industry in which it is used for packaging and may need anti-static packaging solutions. Making a choice may involve considering a product's nature, material, dimensional requirements, and other factors. Due to consumer demand, modern protective packaging materials have forced market vendors to focus on sustainability and create reusable and recyclable products to provide their end-users with a good experience. Additionally, keeping consumers benefits a company since it helps build trust with new and future clients.
  • The beauty products companies in the country are also paying closer attention to their shipping and packaging processes. Future development prospects are anticipated to result from product advancements, including downgauging and the advent of substitute raw materials. Additionally, to support enterprises with large volumes and high-value clients, the suppliers offer packaging equipment and raw materials for sectors with significant requirements for packaging materials.
  • The protective packaging market is driven by the rapid expansion of the e-commerce sector and the advancements made by the manufacturing sector. As the popularity of online shopping increases, the e-commerce sector expands, paving the opportunities for market expansion. Due to the utilization of recyclable materials, it is also anticipated that increased expenditures in R&D activities would help the market grow. Another aspect that contributes to the expansion of the market is the rise in the use of protective mailers by business owners to incorporate inflated air cushions and fill the space left by the emptiness with filler material.
  • However, the rise in raw material prices is anticipated to impede market expansion over the coming years. Environmental limitations on non-renewable fossil fuel feedstocks used in packaging are expected to limit industry expansion.
  • The COVID-19 outbreak impacted the protective packaging market in South Africa in terms of supply and demand. Lockdowns across the nation, issues with the supply chain, and fluctuating availability of raw materials caused firms to halt output, which unfortunately slowed market development. The limited and restricted trade activity among nations also influenced the sales of protective packaging solutions. However, it is anticipated that quick vaccination campaigns throughout the country would assist in reviving the market for protective packaging solutions. Further, Russia-Ukraine has an impact on the overall packaging ecosystem.

South Africa Protective Packaging Market Trends

Growing Demand for E-commerce-based Products

  • E-commerce is becoming more popular than conventional shopping due to the factors like speedy delivery, free shipping, and straightforward return policies. The demand for plastic protective packaging is rising due to the massive availability of numerous items, the growing desire for unique products, and the significant expansion of the entire e-commerce industry.
  • Moreover, online purchases in South Africa mostly come from local websites or marketplaces, although 27% come from the United States and 14% come from Europe. The third most popular e-commerce website in South Africa is the American counterpart of Amazon.com. The increasing e-commerce purchases may create more opportunities for local packaging vendors.
  • Most meal delivery services have seen growth from grocery stores and fast food/convenience stores. UberEATS is an option in South Africa and competes with Mr. Delivery, a regional platform. Price-conscious consumers like online sales and discounts. South Africans use social media more frequently to look for product suggestions and compare costs online.
  • Additionally, the fast growth in the use of smartphones and the inadequate fixed-line infrastructure make mobile e-commerce particularly appealing in South Africa. Mobile spending is expected to rise, which presents a vast potential for online businesses. For businesses to improve the online shopping experience, they can offer mobile optimization.
  • According to ITA, by 2025, Africa is expected to have more than half a billion e-commerce customers, representing a market with a sustained CAGR of 17%. Furthermore, by 2025, 40% of African consumers are expected to have used e-commerce. Being a prominent market in the area, South Africa may experience significant development in e-commerce, opening up opportunities for vendors of protective packaging.

PaperBoard Protectors are Expected to Witness Significant Growth Rates

  • Protective packaging has emerged as one of the most crucial packaging solutions for the food industry and other industries. Innovations in protective packaging have been consistent with the companies’ strategies targeting to retain their business and identify new opportunities by broadening their product portfolio and creating new product demand. The market is mainly driven by B2B demand, making the economies of scale a significant factor for businesses to bargain. An increasing number of rigid paper packaging solution providers are spending significantly on R&D activities to develop technologically-advanced solution offerings.
  • Moreover, consumer electronics are packaged to provide the highest level of protection for delicate, large, heavy, or expensive commodities while in storage or transit. Multiple layers in consumer electronics packaging strengthen such items to make them more durable than standard cardboard. Corrugated paperboards also serve as the product's transportation cushion. Products made with corrugated packaging are 100% recyclable, economical, and may be used in place of other packaging materials.
  • Further, corrugated boxes, recyclable/renewable paper bags, and lightweight and thermal paper-based packaging are in high demand due to the shift from single-use plastic packaging and the expansion of online commerce and food delivery.
  • Moreover, according to PAMSA, in 2021, South Africa recycled 1.15 million tons of paper and paper packaging, with a paper recovery rate of 61.4%. Paper and paper packaging use grew by 17% annually. In 2021, the nation produced 2.1 million tons of paper and paper packaging, imported 760,000 tons, and exported 545,000 tons, which resulted in a 2.31 million tons apparent use of paper and paper packaging.
  • Furthermore, in 2021, the imports of paper packaging containers were valued at around USD 70.31 million, a 13.87% rise in imports from the previous year, 2020, which was valued at about USD 61.74 million. The demand for paper packaging containers in the country is growing due to increased e-commerce packaging, which may necessitate protective packaging for the safety of the product.

South Africa Protective Packaging Market Competitor Analysis

The South African protective packaging market is consolidated due to the presence of limited firms in the country, where few firms hold significant market shares. The market witnessed few acquisitions, whereas product innovations took place significantly. Some key market players include the Mondi Group, Sealed Air Corporation, Packman Industrial Packaging, VitaTex (Pty) Ltd, and Dura Pack (Pty) Ltd.
  • In September 2022, Sealed Air introduced a new line of protective packaging under the name BUBBLE WRAP. The Fill-Air Extreme Efficiency Recycled Material Films claim to include at least 50% recycled plastic, of which 30% is believed to have come from post-consumer trash and 20% from post-industrial recycled content. This ultra-thin, 12.7-micron film aims to minimize the material required to package breakable goods while maximizing air retention to ensure its protection.
  • In February 2022, Smurfit Kappa partnered with Mindful Chef, a prominent provider of recipe boxes, to improve the sustainability of the company's packaging and lower its carbon footprint. A 100% recyclable substitute that was better for the environment while still sustaining the requisite temperatures for lengthy periods was developed by experts at Smurfit Kappa's Experience Centre. The new approach uses compact, two-piece telescopic corrugated cardboard insulation packs with a 30% reduced carbon footprint than the old insulation.

Additional benefits of purchasing the report:

  • The market estimate (ME) sheet in Excel format
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Table of Contents

1.1 Study Assumptions and Market Definition
1.2 Scope of the Study
4.1 Market Overview
4.2 Industry Attractiveness - Porter's Five Forces Analysis
4.2.1 Bargaining Power of Suppliers
4.2.2 Bargaining Power of Consumers
4.2.3 Threat of New Entrants
4.2.4 Threat of Substitute Products
4.2.5 Intensity of Competitive Rivalry
4.3 Industry Value Chain Analysis
4.4 Assessment of COVID-19 Impact on the Industry
5.1 Market Drivers
5.1.1 Growing Demand for E-commerce-based Products
5.1.2 Demand for Flexible Protective Packaging Products
5.2 Market Restraints
5.2.1 Stringent Regulations Related to Degradability
5.2.2 Space Inefficiencies and Additional Costs may Restrain the Market Growth
5.3 Global Protective Packaging Market Overview
6.1 By Product
6.1.1 Rigid Corrugated Paperboard Protectors Molded Pulp Insulated Shipping Containers
6.1.2 Flexible Protective Mailers Bubble Wraps Air Pillows/Air Bags Paper Fill Other Flexible Products
6.1.3 Foam Molded Foam Foam in Place (FIP) Loose Fill Foam Rolls/Sheets Other Foam Products
6.2 By End-user Vertical
6.2.1 Food and Beverage
6.2.2 Industrial
6.2.3 Pharmaceuticals
6.2.4 Consumer Electronics
6.2.5 Beauty and Home Care
6.2.6 Other End-user Verticals
7.1 Company Profiles
7.1.1 Packman Industrial Packaging
7.1.2 Mondi Group
7.1.3 Sealed Air Corporation
7.1.4 Dura Pack (Pty) Ltd
7.1.5 VitaTex (Pty) Ltd
7.1.6 Danapack Packaging
7.1.7 Smurfit Kappa Group PLC
7.1.8 Air-Loc Protective Films
7.1.9 Wavepack Group
7.1.10 EndoPack Group

Companies Mentioned (Partial List)

A selection of companies mentioned in this report includes, but is not limited to:

  • Packman Industrial Packaging
  • Mondi Group
  • Sealed Air Corporation
  • Dura Pack (Pty) Ltd
  • VitaTex (Pty) Ltd
  • Danapack Packaging
  • Smurfit Kappa Group PLC
  • Air-Loc Protective Films
  • Wavepack Group
  • EndoPack Group