The rapid growth of the market is primarily driven by fashion and apparel, consumer electronics, and personal care industries. Considerable investments in the consumer electronics, personal care, and fashion and clothing industries are creating a scope for the expansion of packaging opportunities. According to IBEF, in 2018, electronics were the most significant contributors to online retail sales in India, with a 48% share, followed closely by apparel at 29%.

- E-commerce has emerged to be a prominent choice for the consumer to purchase goods during the last decade or so. The rising internet penetration, growing access to the internet across the vast majority of the populations in developing economies, increasing smartphone penetration, advancements in technology, and rapid urbanization have created a massive opportunity for the e-commerce market. According to Spiralytics, digital online buyers are estimated to reach 2.1 billion in 2021, up from 1.66 billion in 2016.

- The e-commerce industry is exploiting the opportunities in the packaging landscape driven by young demographic profile, with increasing internet penetration and relatively better economic performance in the past few years. ​

- The rapid growth of the market is primarily driven by fashion and apparel, consumer electronics, and personal care industries. Considerable investments in the consumer electronics, personal care, and fashion and clothing industries are creating a scope for the expansion of packaging opportunities. According to IBEF, in 2018, electronics were the most significant contributors to online retail sales in India, with a 48% share, followed closely by apparel at 29%.

- Moreover, companies are adopting an omnichannel distribution strategy for their products, including online purchasing, which is fuelling the growth of the e-commerce packaging as a whole. The statistics by ReadyCloudSuite which suggest that 66% of the online shoppers rely on more than one channel for purchases, and 60% of shoppers begin product research on a mobile device before purchasing, validate the growth prospects.

- Further, bioplastic is taking a prominent role in e-commerce packaging material used as it has a wide range of applications. The most common source of bioplastic is fermented starch from corn and wheat, as it is highly durable and biodegradable. Also, to replace the ever-present plastic bag, plant fibers, such as jute and hemp, are widely used as containers.

- Due to COVID-19, with the increasing demand for medicine, food, and other essential goods at an all-time high, a lack of available packaging to ship them in, can cause significant interruption.

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Key Market Trends

Consumer Electronics and Media to Hold Significant Market Share

- According to the Consumer Technology Association, retail revenue from consumer electronics/technology sales in the United States, in 2019, was USD 406 million. The sales are expected to reach USD 422 million by the end of FY 2020. With the increasing demand for consumer electronics around the world, the demand for protective plastic packaging is expected to surge in the forecast period.

- Among the specialized plastic packaging systems for consumer electronics and media, shrink packaging, or commonly known as shrink wrapping, and stretch wrapping are very common and widely used. Compared to shrink film and bags, stretch wrapping affords large energy saving and does not require the availability of fuel. This simplifies the inventory.

- For instance, the Mavic Air 2 drone, which was launched in April 2020, is packaged with a smart controller and a smartphone display in carton boxes that come with protective plastic shrink-wrap, to avoid damage during shipping.

- When it comes to efficient packaging, plastics often enable manufacturers to ship more products with less packaging material. This process of light-weighting can play an essential role in boosting the environmental and economic efficiency of consumer product packaging. Also, blister packaging is ideal for small consumer electronic goods. This type of plastic packaging highlights electronic accessories and provides a degree of tamper resistance, while still being convenient and easy to open. These characteristics are helping drive the market growth.

- For instance, Kingston's HyperX Savage EXO, launched in 2019, comes packaged between layers of clear blister-pack inserted in the box. The plastic, screwless, and slate-graycase protects the drive's internals.

United States to Witness Significant Market Growth

- In the United States, e-commerce continues to grow at a dramatic pace, putting pressure on traditional retail. Consumers spent USD 601.75 billion online with US merchants in 2019, up by 14.9% from USD 523.64 billion the prior year, according to the US Department of Commerce quarterly e-commerce figures. That was a relatively higher growth rate than 2018 when online sales reported by the Commerce Department rose 13.6% Y-o-Y. Also, sales of consumer-packaged goods, long confined to traditional retail channels, are exploding online, with growth rates, in many cases, in excess of 50% Y-o-Y.

- However, many online retailers continue to underestimate how important having the correct packaging is to ensure sustainable business success. The requirements for packaging in online commerce are growing. From the highest possible efficiency and sustainability in the supply chain to increasingly popular logistics trends, such as bicycle couriers and delivery drones, through to "last mile" delivery and the all-important marketing purpose vis-Ã -vis the customer, all these are resulting in new demands.

- Online retailers like to use plastic film packaging for clothing. This is ideal for most items made from fabric, i.e., flexible content and has little need for protection. However, film packaging is not suitable for products with special protection requirements, e.g., those which must not be bent, broken, or deformed. Nevertheless, plastic bags and film packaging keep the packed product clean, are lightweight, take up very little space, and are cost-effective for the retailer.

- Furthermore, Plastic Air pillows can also be recycled at many retail stores along with plastic films, such as grocery and dry-cleaning bags, bath tissue wrap, and bread bags. In 2018 over 250 global companies, including Unilever, Nestle, and Coca-Cola, pledged to implement 100% recyclable, biodegradable, or compostable packaging by 2050.

- In January 2020, United States-based Sealed Air Corporation, which is the inventor of bubble wrap, launched a new version of Bubble Wrap brand packaging material that is made with at least 90 percent recycled content.

Competitive Landscape

The market studied is fragmented, with market incumbents, such as Amcor PLC, Berry Global Inc., and Sealed Air Corporation, operating in the market. Sustainable competitive advantage can be gained through innovation in design, technology, and application. Amcor opened two e-commerce testing laboratories in Manchester, Michigan, US, and in Ghent, Belgium. At both sites, the company’s packaging experts will test and certify packaging for customers from around the world. Recent developments in the market are -

- March 2020 - Pregis acquired So.Pr.Ad. SRL (Soprad), Italy, a provider of temporary protective films. Going forward, the company’s products will be marketed under the Pregis’ PolyMask brand. PolyMask’s products include temporary surface protection films and specialty films.

- March 2020 - Berry Global Group announced that, in order, to address the increasing demand from clients, it is investing approximately USD 30 million to increase the production capacity of ultra-high performance stretch films. The investment is allocated for new lines and upgrades to the existing assets in nine of the Company’s North American locations that currently manufacture stretch film.

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