Covid-19 gives $8.12 billion boost to e-commerce pack sales: Smithers

20 April 2021: Covid-19 pandemic has delivered a severe shock to the economy worldwide. The prospects of effective vaccination programmes and a return to a degree of normal business activity in H2 2021 remain positive.

The packaging industry has previously shown itself to be resilient to recessions, but still there will be a 6.0% drop in packaging demand in 2020, according to the latest data from Smithers. The segments affected worst have been transit and industrial, personal care and other consumer goods packaging.

Coronavirus restrictions on retail and travel have proved a boon for e-commerce sellers and are helping to make packaging used in this channel a more important component. Smithers study ‘The Future of E-commerce Packaging to 2025’ shows that consumption of e-commerce packs has risen by 42% in 2020 relative to 2019. Adding $8.12 billion to the revenues of packaging suppliers compared to its pre-Covid forecasts. In 2020 total value will reach $49.15 billion.

The surge in demand for e-commerce packaging will moderate slightly across the next five years, but will still be at an impressive 14.9% compound annual growth rate (CAGR). As e-commerce continues to grow as a sales channel it is posing both immediate and medium-term challenges for packaging suppliers. Product diversification“Prior to 2020, the e-commerce packaging market was dominated by clothing, fashion accessories and consumer electronics.

The largest beneficiaries of Covid-19 have been groceries, sports equipment and personal care – as many visits to physical retail stores have stopped. For groceries and cosmetics, more shoppers are now more comfortable with purchasing online. In the US for example the number of active online grocery shoppers rose from 16.1 million in August 2019 to 37.5 million 12 months later; during which time sales increased from $1.2 billion to $5.7 billion.