General situation of packaging industry
According to Vietnam Report Joint Stock Company, the organization’s latest survey of businesses in the packaging sector shows that the packaging industry will grow by the end of 2024 thanks to the recovery of domestic consumption, especially in the food, beverage and e-commerce sectors.
The growth of the packaging industry is driven by the stable development of the domestic economy, when GDP in the first 9 months of 2024 increased by 6.82%, opening up the prospect of completing the annual target with a growth rate of 6.5% to 7%.
Mordor Intelligence’s forecast shows that the size of the paper packaging market in Vietnam will reach 2.6 billion USD in 2024 and is likely to increase to 4.14 billion USD in 2029, with a compound annual growth rate (CAGR) of 9.73% in the period 2024 – 2029.
According to the Vietnam Packaging Association, there are currently about 14,000 enterprises in this field, of which 65% focus on plastic packaging production. In the plastics industry, the packaging segment is expected to dominate the market with an expected output of 15.09 million tons in 2028.
Recovery momentum
The economic recovery and stable macro indicators have stimulated increased consumption, creating conditions for packaging enterprises to bring production lines to potential output levels, increase resources for production expansion and technology improvement.
The two driving forces behind the impressive recovery of consumption are tax reduction policies and the recovery of industrial production.
In particular, the Government has continued to reduce VAT by 2% from July 1 to December 31, 2024, according to Decree 72/2024/ND-CP. Continuing to maintain tax reduction is necessary because the above policy has brought positive results in the previous period.
Thus, the Government has maintained VAT reduction to stimulate consumption for 3 consecutive years after COVID-19.
E-commerce Development in Packaging Industry
The boom of e-commerce has been changing the way of consumption, while creating a great demand for packaging suitable for transporting, preserving and distributing goods through online channels.
“Vietnam’s e-commerce has always maintained impressive growth momentum, maintaining a high growth rate and Vietnam is recognized as having the leading e-commerce development speed in Southeast Asia”, explained experts from Vietnam Report.
According to the Vietnam E-commerce Index Report 2024 of the Vietnam E-commerce Association, the estimated growth rate of Vietnam’s e-commerce in 2023 is over 25% to the previous year and reaches 25 billion USD, of which the scale of online retail sales reaches 17.3 billion USD.
Recently, e-commerce is showing a trend of selling through live streaming and affiliate marketing.
With e-commerce channels increasingly expanding, typically TikTok Shop, Shopee, Lazada…, this will be a boost for the retail market and packaging businesses will also benefit from this.
Development of Technology
The next important factor is the development of technology, which plays a key role in improving productivity and enhancing product quality in the packaging industry.
With the support of technology, packaging businesses can quickly adapt to changes in consumer demand, creating smarter, more convenient and environmentally friendly packaging products.
With increasingly stringent market standards, products using complex packaging are increasing. These are types of packaging with complex structures, made up of many layers of different materials to combine the properties of each type of material, environmentally friendly…
The use of recycled materials and energy-saving production processes not only helps reduce production costs but also meets the increasing demand for green consumption. This is also a mandatory trend in the packaging industry today.
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