Market Trends of South Korea Paper Packaging Industry
This section covers the major market trends shaping the South Korea Paper Packaging Market according to our research experts:
E-Commerce to Drive the Market Growth
- In South Korea, e-commerce is a significant part of the entire consumer market, which is continually rising. Korea is a technologically advanced country, with about 99.5 % of Korean households having internet connections through a computer, mobile phone, or another device. According to ITA, domestic internet sales in 2021 increased by 24.72% from the previous year, 2020. High smartphone penetration is the key driver of industry growth.
- Over the last few years, the popularity of online purchasing through various e-commerce channels has steadily increased. It was notably true in the recent year as a result of COVID-19's effects, as the growth of the South Korean e-commerce market unexpectedly increased despite a falling trend since 2017.
- Online shopping is possible on various platforms, including tablets, laptops, and smartphones. As the number of smartphone users in South Korea grows, so does the popularity of mobile shopping. The increasing e-commerce factors drive the market to adopt paper packaging products due to sustainable, eco-friendly benefits.
- E-commerce has been driving the expansion of the Korean retail market. Traditional retailing channels need help as e-commerce expands quickly. Consumers browse conventional retailers' merchandise to obtain the optimum prices before purchasing. The anticipated e-commerce growth in the country may create opportunities for several packaging companies where paper packaging is primarily used.
- According to Statistics Korea, the annual sales of the e-commerce market in the country were valued at about USD 128 billion, a 16.9% rise from the previous year, 2020, which generated around USD 109.5. In 2021, the organization estimated that e-commerce would account for 28.7% of all retail sales. Paper packaging vendors in the country may benefit significantly from such large shares.
Understand The Key Trends Shaping This Market
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Food and Beverage Industry to Hold Significant Market Share
- Consumer goods, such as food and beverages, are among the most popular online shopping categories. Online grocery shopping has become more popular as more transactions are switched to online interactions rather than purchasing from physical stores, resulting in many consumers using mobile grocery shopping apps.
- According to ITA, Online purchases of food delivery services increased by 48.2% year over year to KRW 25.7 trillion (USD 19 billion), while purchases of food and beverages increased by 26.32% to KRW 24.9 trillion (USD 18 billion). The significant shares of food and beverages in e-commerce sales may increase the demand for paper packaging in the country.
- Moreover, due to the impact of the COVID-19 outbreak, South Korea's internet food business grew at a breakneck pace. According to Statistics Korea, South Korea's online grocery and food sales only exceeded KRW 2.2 trillion (USD 1.8 billion) in December 2021, an increase of 11.2 percent from the previous year.
- According to the British Chamber of Commerce in Korea, South Korea's F&B business is defined by hypermarket dominance and expanding sales through e-commerce platforms. The F&B market in South Korea is expected to reach GBP 76.1 billion (USD 89.98 billion) by 2024.
- Further, the government initiatives for sustainable packaging are mandating the adoption of paper packaging products. For instance, as part of South Korea's 2050 carbon neutrality goal, the South Korean Ministry of Environment has announced that disposable cups from chain cafes and fast-food restaurants will require a 300 KRW (USD 0.25) deposit starting on June 10, 2022. This regulation applies to chains with more than 100 branches and 38,000 stores.
- Because of its mobility and ease of use, paper and board packaging are widely employed. The paper & board pack format's disposability and recyclable nature also contribute to its rising popularity. Due to the ease of on-the-go consumption, it offers to busy consumers; the packaging is primarily employed in the juice segment. Eco-friendly features mostly drive paper and board packaging in the nation.
