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The coronavirus (COVID-19) outbreak is incredibly fast-moving, uncertain, and complex, with potentially profound and long-term socio-economic impacts on a global, cross-industry scale. Organizations are faced with tough choices on how to successfully steer their business through these challenges.

The global slowdown in consumer packaged goods will see a net loss of market value of US$579bn. Asia – which accounts for the largest regional share of value in consumer goods - will be the hardest hit in terms of absolute market value loss, given an accelerated rate of decline compared to the global average. 

Recovery will be slow in all major economies in Asia. China will experience the greatest absolute loss in consumer goods values, owing to its size as a nation and center for manufacturing. The next largest markets in the region – Japan, India, Indonesia, Philippines, and Thailand, are all set for a slow recovery, with consumer goods values predicted to decline further in 2021. The poorest economies in the region, particularly central Asian nations such as Turkmenistan, Uzbekistan, and Kyrgyzstan, will see negligible drops in consumer goods values.

While, when it comes to Pacific region, both Australia and New Zealand are forecast to have a slow recovery from the impact of COVID-19 in consumer goods terms, with 2021 set to decline even further year-on-year compared to 2020. 

Impact of Covid-19 on APAC Packaging sector

COVID-19 and its impacts on the packaging industry have forced theconsumers in the Asia-Pacific (APAC)region to be more mindful of their safety and wellbeing. They are likely to change their views about packaging in response to the spread of COVID-19 to protect them fromgetting infected bythe virus. 

Some of the key trends and developing insights impacting the packaging industry in the APAC amid COVID-19 are:

Health and protection over sustainability

Just before the COVID-19 outbreak, sustainable packaging was one of the key challenges on every fast moving consumer goods (FMCG) company’s agenda. However, consumers’ sentiment is now significantly shifting to ‘health and protection first’, and this will potentially change consumers’ views on packaging to be more hygiene-focused rather than sustainability.

Bulk Packaging

In the light of the current COVID-19 pandemic, many manufacturers temporarily switched their production and quickly adapted to new market conditions. If the lockdown continues for longer, it may require more permanent solutions, including introduction of new bulk packaging formats to categories that did not necessarily use them before. 

If this happens, manufacturers may think about a set of design enhancements or functional changes that not only make consumers' lives easier or safer (such as handles or more hygienic dispensers) but also make bulk packaging look nicer. This could help them to stand out from competition but also avoid bulk packaging being perceived by many consumers as "unattractive.

Some of the key points that manufacturers need to look at are:

1. Improve consumer's convenience of bulk packaging with easy-to-carry features, even for less obvious packaging formats such as flexibles.

2. Think about large packaging facilitating efficient storage so the product could take less storage space and remain fresh for longer.

3. Consider enhancing design of your bulk packaging formats so they look modern and functional at a glance, or could be efficient when sharing.

4. Introduce unusual shapes or features that raise presentation level to attract the consumer's attention.

5. Consider introducing closures that facilitate hygienic dispensing, minimize hand contact and are easy to use.

Packaging in foodservice

As the virus can spread from touch, consumers have been reconsidering their preference for recycled and sustainable packaging; many foodservice chains have already stopped using personal and reusable packaging.

According to Covid-19 Week 3 Consumer Survey, 39% Indians and 34% Chinese have been ordering food deliveries (from restaurants) take-away more often than before. Given the current situation, building up capabilities in this area, right from packaging know-how to online ordering and delivery (or using third parties), will  provide the building blocks for the  future growth.Even after the pandemic, consumers will continue to look for the positive food delivery experience they encountered while stuck at home. Hence, operatorsshould look to focus on buildingbetter facilities in this area.

Trust & Safety

Issues around eco-friendliness and recycling are coming to the fore. After the initial effects of the pandemic, packaging companies are urging governments to ensure that rubbish collections and recycling are maintained.Due to COVID-19, traditional packaging formats and single-use plastics are receiving a short-term revivified status to ensure the safe and sanitary distribution of vital products. 

GlobalData Covid-19 week-4 consumer survey shows that almost 76% Indians, 54% Chinese, and 43% Australians agree that they are concerned about the safety of the packaging of the products they purchase.

Moreover, consumers are seeking long- term solutions that also meet the sustainability agenda.Tamper-proof packaging is likely to be extremely popular in the near future as consumers will seek more trustworthy brands that can guarantee the safety of the product. 

Technology-Enabled Packaging

The product packaging is crucial for various reasons; customer knowledge is one of its most important factors. With the growing number of Covid-19 positive cases, smart packaging continues to gain traction, as it gives greater transparency. Technology can now be incorporated directly into the product to provide better protection and knowledge to the user. Block-chain technology, QR codes and smart labels are implemented into the packaging sector and can be scanned by smartphone for further product details. 

Such systems may also be used not only to ensure product protection and quality, but also to minimize waste and increase productivity in the supply chain. Manufacturers must engage in technologically enabled packaging to gain consumer loyalty. 

Sterile and antiviral packaging

GlobalData’s Covid-19 week 3 consumer survey reveals that 70% Indians and 63% Chinese are influenced by how the product impacts their health and wellbeing. Anxiety to avoid germs and other contaminants leads to increased demand for better packaging. Immediate consequences would be the fear of consumers about the ability of the virus to live on the packaging surface and this would increase the market for sterile and antiviral packaging. 

Research is underway into the antibacterial and antiviral polymers and biopolymers packaging– materials that are enhanced with effective, active drug elements and display low toxicity. Demand for these materials in everyday consumer products may rise dramatically after Covid-19. 

Editor Notes

• Quotes provided by ShagunSachdeva, Consumer Insights Analyst at GlobalData

• This press release was written using data and information sourced from proprietary databases, primary and secondary research, and in-house analysis conducted by GlobalData’s team of industry experts

• Covid-19 Week 3 survey has been conducted from 7-13th April and Week 4 from 14-19th April. GlobalData weekly survey is carried out in the 11 countries globally, with a target sample size of 500 respondents per country, per week.

About GlobalData

4,000 of the world’s largest companies, including over 70% of FTSE 100 and 60% of Fortune 100 companies, make more timely and better business decisions thanks to GlobalData’s unique data, expert analysis and innovative solutions, all in one platform. GlobalData’s mission is to help our clients decode the future to be more successful and innovative across a range of industries, including the healthcare, consumer, retail, financial, technology and professional services sectors.

 

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