A product simply cannot be shipped without appropriate packaging. With more and more consumers switching seamlessly between shopping channels, greater the need for packaging to be just as integrated.
90% global consumers believe packaging plays a very or somewhat important role in ensuring product safety.
The packaging industry is experiencing growth globally because of higher focus and preference of consumer towards hygiene and packaged products (which are further expected to increase post Covid-19 pandemic). Packaging sales in India are expected to continue to show strong momentum as both increased consumption and demand for consumer goods drives the need for more sophisticated packaging. The rising purchasing power, due to the growth in per-capita income of the Indian middle-class and concern for hygiene post COVID, will fuel the Indian packaging market in adopting better packaging methods, materials, and machinery, to ensure better quality. We feel that this rapid change can be disproportionately unkind towards a SME Manufacturers in current environment. However, if the same manufacturers are given capital resources and a platform to respond and scale, it can help them differentiate itself in a commoditized market.
The global packaging industry will very soon witness a major shift towards hygienic smart and intelligent packaging – packaging that can sense changes in its external environment and transmit the signals informing about the change.
Packaging is one of the fastest growing industries and stands at USD 900 billion globally. It has grown higher than GDP in most of the countries. In developing country like India, it grew at a CAGR of 18% in the last five years and touched USD 72 Billion in FY 20. The per capita packaging consumption in India is as low as 4.3 kg, compared to developed countries like Germany and Taiwan where it is 42 kg and 19 kg, respectively. However, in the coming years Indian packaging industry is expected to grow at 25% per annum.
Retail Industry is one of the most dynamic industries in India. It has experienced high growth over the past years, with a gradual shift towards modern retailing. Indian retail market has attracted and increased the presence of multinational companies and therefore boosted demand in sectors such as F&B, consumer products, pharma, personal care, and cosmetics. Rising income levels are also stimulating the growth of organized retail which therefore increases the demand for innovative and attracting packaging concepts.
The fact that e-commerce makes packaging redundant cannot be farther from the truth. With increasing digital penetration, consumers have the luxury of scrolling through multiple options before making their pick. While in-store, a brand competes with a product placed right next to it, online marketplaces make a product vie for attention alongside literally everything available in any part of the world. Therefore, packaging’s role in differentiating the brand is crucial and important to win in an online marketplace. While a lot of the focus of e-commerce packaging is on product ‘protection’, creating a fuss-free and memorable unboxing experience is equally important. Additionally, the channel must overcome shortcomings vis-à-vis traditional retail due to the absence of instant gratification through ‘touch & feel’ which makes product packaging even more important to influence purchase behavior. Whatsoever the channel, high quality packaging impacts the brand perception, and in turn the consumer’s decision to make a purchase (in some cases, repeatedly!)
As e-commerce continues to gain prominence in India – especially in the light of Covid-19 pandemic – it has become imperative for Indian Consumer brands to have an online strategy. The budding brands who want to occupy a niche for themselves will also need to have an integrated approach for packaging their products to create a distinct positioning for their brands.
Today, the current product packaging is designed for the ‘shelf’ and irrespective of the appropriateness, the same design is used for the online retail channel as well.
‘One-pack’ may not however fit all! With digital marketplaces becoming increasingly commonplace, the utility of traditional product packaging, and not just logistics packaging, also needs to transcend the barrier between physical and virtual. Bridging the divide between packaging for the two channels will need a deliberate focus by both consumer product companies as well as packaging manufacturers. We believe that today it is extremely difficult to bridge this gap given the fragmented nature of market as well as current technological challenges.
At the outset, the packaging design needs to be considered holistically, which can relay the marketing message but also be in a form that can be safely, efficiently and cost effectively transported over the last mile.
Packaging development, starting from brand story to artwork to integrated view of tertiary, secondary and primary packaging can help start-ups create a unique unboxing experience for their customers. This integrated approach can also help them optimize packages to help them save on logistics costs. Amongst a plethora of options available to consumers, packaging can act as a key differentiator to aid greater consumer recall and help the product stand out.