Talking about the development opportunities and impact of the packaging industry after the new crown epidemic

For today's e-commerce giants, this is undoubtedly an important time point. With the national e-commerce and the explosive growth of online shopping, tens of billions of express packages have injected new vitality into China's packaging industry.


So, can the current new crown epidemic bring similar opportunities to packaging?

The first is social responsibility! Under the epidemic, the epidemic prevention and control material guarantee enterprises worked overtime to deliver equipment to the frontline medical staff. And the supporting packaging and printing enterprises are also stepping up their horsepower and contributing important forces to winning the battle against epidemic prevention and control.


Second, the early resumption of work is also beneficial to packaging companies themselves. Let us first review the specific difficulties that packaging companies will face due to the advent of the epidemic: cash turnover, rework of workers, increased costs, loss of customers, raw material channels, order delivery, epidemic prevention, etc. But the most important thing in the end is the order default and customer loss caused by the inability to resume work.


The packaging industry is a production and service industry. If it is too late for customers to use packaging for re-production, the production of packaging enterprises must be ahead of customers. Guaranteeing the delivery of orders to the greatest extent, reducing the risk of order default, and maintaining the trust of customers are more important than temporary gains.


On the premise of retaining customers, companies can also seize the delivery disruption period caused by the shutdown of other companies and develop new customers.

Seeking new customers, new opportunities


The new customers mentioned here not only include lost customers from other factories, but also due to the demand for express delivery, medical care and productive materials brought about by the epidemic, which will bring new business increments.


Let's first take a look at the current packaging demand pattern. Demands that have been negatively affected by the epidemic mainly focus on optional consumption, consumption scenarios in public places, offline purchase channels, and consumption that cannot be postponed. If divided by industry, we roughly divide the existing packaging needs into four categories:

  1. Food and beverage: The essential consumption attribute is strong, but the increase in C-side demand cannot make up for the decrease in B-side demand. Some institutions predict that the annual sales volume of the beer industry alone will have an impact of 1.5%-3%;


2. Electronic appliances: Consumer electronics have strong optional consumption attributes, with large short-term impact and medium-term recovery. The optional consumption attribute of home appliances continues to decline, with online channels exceeding 30%. It is expected that the reduced demand in Q1 will appear in Q2/3, and the demand for the whole year is expected to remain basically unchanged;


3. Clothing, shoes and hats: The epidemic is in the peak season of sales, and offline channels account for more than 80%, which has a great negative impact. Especially in terms of clothing, some pessimists believe that the revenue of brand clothing in 2020 will drop by 7.2% year-on-year;


4. Daily chemical products: The optional consumption attribute is weak, the proportion of online channels is high, and the negative impact is small.

Judging from the current situation, the demand side of packaging paper will inevitably shrink, but the shrinkage of demand is mainly due to the reduction of offline consumption. Express delivery for online consumption and the replenishment of medical and productive materials are creating new demand for paper packaging.

At a new point in time, when the explosive growth of online shopping after the epidemic is over, the packaging industry will also usher in good news.