The future development prospect of traditional paper packaging

The future development prospect of traditional paper packaging

Industry analysis:

1. Industry status analysis:

Paper packaging industry:

Paper packaging refers to the base paper as the main raw material, through printing and other processing procedures made for the protection and promotion of the packaging products, mainly including color boxes, cartons, manuals, self-adhesive stickers, buffer materials and many other varieties, paper packaging “has a wide range of raw materials, accounting for a low proportion of product cost, green environmental protection, easy logistics handling, easy storage and recycling and many other advantages. With the continuous improvement of production process and technical level, paper packaging products have been able to partially replace wood packaging, plastic packaging, glass packaging, aluminum packaging, steel packaging, iron packaging and other packaging forms, and the application range is more and more wide.

At present, China has formed the Pearl River Delta, the Yangtze River Delta and the Bohai Bay. Economic zone, Central Plains Economic Zone and the middle reaches of the Yangtze River Economic belt five paper packaging industry regions, these five paper packaging industry regions occupy more than 60% of the national paper packaging industry market scale. At the same time, with the development of the paper packaging industry, environmental protection laws and regulations are increasingly stringent, increasingly fierce market competition gradually compressed the profit space of enterprises, resulting in small and medium-sized enterprises are gradually eliminated, the number of enterprises in the industry is decreasing year by year, and the industrial layout is tending to be reasonable. Some popular holiday boxes, such as Valentine’s Day chocolate box, truffle chocolate box, Godiva heart-shaped chocolate box, strawberry chocolate box, wine and chocolate box,  date box, people are willing to pay a higher price to buy, but also tend to choose to buy more unique packaging. Cigarette box,hemp box, vape box, smoke grinder has also become one of the best-selling products in China.

Paper packaging category:

Paper packaging can be divided into disposable packaging and durable packaging according to the form of packaging. Disposable packaging refers to the packaging form that is in direct contact with the packaging, mainly used in the packaging of consumer goods such as medical devices, drugs, food, sterile liquids, and daily chemicals. Durable packaging usually refers to the packaging with protective outer layer, and durable packaging is mainly used to provide official space and better protection for internal packaging.

According to the packaging function, it is divided into general paper packaging, special purpose paper packaging, food paper packaging and printing paper packaging. General purpose paper packaging is mainly composed of base paper and cardboard, common forms are cartons, partitions, paper bags and cartons, etc. Special purpose paper packaging is mainly composed of oil-proof wrapping paper, moisture-proof wrapping paper, rust-proof paper, used for large machinery and equipment and metal products packaging, food paper packaging for food, beverage and other fields of packaging. Common forms are food parchment paper, candy packaging base paper, etc., printing paper packaging refers to the surface layer with filler and adhesive cardboard printed on the trademark made of cardboard boxes and other paper for packaging use, common forms have white board paper, white cardboard and so on.

2. Industry chain analysis:

China’s paper packaging industry chain from top to bottom can be divided into upstream raw material suppliers, midstream paper packaging manufacturers and downstream application industries.

Upstream:

The upstream of the paper printing and packaging industry mainly provides the paper industry with white board paper, double adhesive paper, coated paper, corrugated paper and other base paper products, as well as the chemical industry and packaging machinery and equipment manufacturing that provide printing auxiliary materials such as ink, ink and glue for the industry

Paper industry is an important upstream industry in the packaging industry, according to the different products in the paper printing and packaging industry, the cost of printing and packaging products paper raw materials ranging from 30% to 80%, so the upstream industry, especially the development of the paper industry and base paper prices will have a direct impact on the profit level of the paper packaging industry.

In terms of paper packaging machinery and equipment, the technical level of China’s carton packaging machinery is relatively behind Western developed countries, and it is also at a disadvantage in the competition of product development, performance, quality, reliability, service, etc., the specialization of paper packaging machinery and equipment is higher, and there are high technical barriers. The mainstream equipment in the world has been developing in the direction of digitalization, networking, high speed and low consumption, environmental protection and humanization. The machinery and equipment of China’s paper packaging industry are still mostly dependent on imports due to backward technology, so the bargaining power of upstream paper packaging machinery and equipment enterprises is higher.

Midstream:

In the midstream paper packaging industry, due to the low capital and technical threshold of the paper packaging industry, small paper packaging enterprises at the bottom of the industry chain due to the large number of products, low product grade, product homogenization is serious, fierce competition with each other, and the profit level and bargaining power are relatively low. Large enterprises in the industry due to scale advantages and stronger technical strength, so in the face of environmental policy tightening and rising raw material prices and other factors have a higher resilience, Yutong Technology, Hexing packaging, Donggang shares, and other head enterprises gradually stand out in the industry, market concentration further improved. These high-end paper packaging enterprises have a high level of profit and bargaining power in the industry due to their advantages of large scale, low raw material procurement cost, high technological level, high product demand and high added value.

Downstream:

The downstream of China’s paper packaging industry chain is mainly food, beverage, daily chemical, medicine, cultural supplies, electronic appliances and express delivery industries. Among them, the consumer electronics industry, food and tobacco and alcohol industries have relatively large demand for paper packaging. With the substantial improvement of Chinese people’s living standards, the demand structure of consumers is being transformed and upgraded, and the demand for packaging products has also been upgraded from the original simple packaging protection function to reflect the product quality and consumer grade needs. The downstream customers of large paper packaging enterprises are mostly large high-quality customers, such customers have high brand awareness and strong profitability. It has high requirements for the quality of paper packaging and supply stability, and the customer demand of the downstream application industry has an important development-oriented role for the midstream paper packaging enterprises, so it has a high bargaining power in the industrial chain.

3. Business model analysis

The business model of most smes in the industry is: sourcing raw materials from upstream suppliers, providing a single manufacturing service, serving customers within a limited service radius, and then making profits from it. This model has some problems: in terms of procurement, the upstream industry concentration is high, enterprises have a high right to speak, and the bargaining power of paper packaging enterprises is relatively low: in terms of product research and development, the industry technical threshold is low, and the technology development and innovation ability of small and medium-sized enterprises is poor; In terms of production and manufacturing, product homogenization is serious, product premium is low, profit space is meager, logistics and transportation, enterprise service radius is limited, which is not conducive to expanding customer coverage.

Packaging total solution business model

In addition to manufacturing packaging products for customers, we also provide a complete set of services such as packaging design, third-party procurement, logistics distribution, and inventory management. Packaging overall solution originated in the United States and widely used in Europe and the United States developed regions, has become the development trend of the global packaging industry. Packaging solutions shift the focus of packaging suppliers from the product itself to solving customers’ real problems, and sell the total solution covering packaging materials and packaging supply chain services to customers as a product. The packaging Total Solution business model transfers the management and control of the packaging supply chain to a single packaging supplier, effectively reducing the operating costs of downstream customers under the traditional business model of the printing and packaging industry.

4. Market space:

2023 paper packaging is expected to be nearly 540 billion market space. According to Kearney’s data, the overall size of the packaging industry in 2021 is $202.8 billion, of which the paper packaging scale is $75.7 billion, accounting for 37%, which is the largest proportion in the subdivision packaging track: According to the forecast 2021-2023, the scale of China’s paper packaging industry increased from $75.7 billion to $83.7 billion, with a CAGR of 5.2%. Its main driving factors are driven by paper plastic replacement, consumption upgrading and the growth of various downstream industry segments.

In January 2020, the National Development and Reform Commission and the Ministry of Ecology and Environment issued the “Opinions on Further Strengthening the control of plastic Pollution”. By the end of 2022, the consumption of disposable plastic products will be significantly reduced, and by 2025, plastic pollution will be effectively controlled. According to the data of China Business Information Network, the output value of plastic packaging industry is expected to reach 455.5 billion yuan in 2021, and the replacement space for paper packaging is huge.

5. As an important link in commodity circulation, the packaging industry has broad prospects for development. Here are a few key factors:

Increasing market demand: With the development of the economy and the improvement of people’s living standards, the market demand for high-quality packaging continues to increase. Whether it is a traditional physical retail or e-commerce platform, product packaging plays an important role. Consumers’ aesthetic and demand for packaging is also increasing, and they have higher requirements for quality and function.

The rapid development of the Internet in China has led to the rise of e-commerce, with more and more consumers choosing to shop online. This makes the demand for e-commerce packaging surge, and the packaging industry is facing greater market opportunities and challenges. Product packaging on e-commerce platforms not only needs to have the function of protecting goods and attracting consumers, but also adapt to the special needs of logistics and distribution.

Third, increasingly rich products, enhanced environmental awareness: with the promotion of science and technology and innovation, products from all walks of life continue to emerge, and market competition is becoming increasingly fierce. In this context, packaging has become an important means of differentiation of products, and unique design and functions have become the key to attracting consumers. At the same time, consumers’ concern for and demand for environmentally friendly packaging has also been increasing, promoting the development of environmentally friendly materials and sustainable packaging.

Fourth, technological upgrading and innovation: the packaging industry has made great progress in technology. Advanced equipment and process technology make packaging production more efficient and accurate, and the iteration of printing and structure technology also brings more possibilities for packaging design. The application of digital technology makes the packaging industry more intelligent and personalized, and improves the quality and image of packaging while meeting the individual needs of consumers.

In the increasingly competitive market environment, traditional packaging production and processing has been unable to meet the needs of product enterprises. Product companies need more comprehensive services and greater service value, not just simple packaging production. Therefore, the packaging industry needs to develop in a more integrated and one-stop direction. Integrate related service modules such as brand planning, product marketing and planning packaging to provide a full range of solutions for product enterprises to help products achieve the goal of selling well.

It is believed that in the future, more and more packaging companies will keep up with the changes in market demand, constantly innovate and improve service levels, provide customers with professional brand planning, product marketing and packaging design, and jointly promote the development of the packaging industry.

In the future, more environmentally friendly materials will be used, because the development of green, recyclable recycled materials is our common goal.Protecting the earth is always our mission.