I. The industry market is vast with low market concentration

The packaging industry has a long history of development and has formed a mature and complete industrial chain. The upstream includes paper for packaging, general plastics, wood, glass, special equipment, and other sub-sectors. The midstream mainly refers to the production process, with products covering paper packaging, plastic packaging, metal packaging, wooden packaging, and glass packaging products, which are applied to many markets such as pharmaceuticals, food, tobacco, home appliances, cosmetics, consumer electronics, etc. The downstream distribution is extremely broad, and the entire industry chain shows the characteristics of a relatively narrow upstream and a dense downstream industry.

The market size of China's packaging printing industry is huge. According to the data from Tanji Big Data, the market size exceeded 15 trillion yuan in 2023, with an extremely broad market space. In addition, thanks to the development of China's economy, the rise of online shopping, and the continuous improvement of e-commerce penetration rates, the overall market size of China's packaging industry has shown a growth trend. The growth trend was more obvious between 2020 and 2023. In 2020, the market size of China's packaging industry was 10.065 trillion yuan, 12.042 trillion yuan in 2021, 12.293 trillion yuan in 2022, and reached 15.020 trillion yuan in 2023, with an annual compound growth rate of 14.3%. In recent years, the Chinese packaging market has accelerated its expansion.

The barriers to entry in the packaging printing industry are weak, and companies can start production by purchasing paperboard and equipment. In 2023, the number of packaging printing enterprises above designated size in China reached 10,441, and the growth rate of enterprises in the industry has increased year by year from 2019 to 2024. The growth rate in 2023 was as high as 12.5%, and the industry track is very crowded. In addition, the market share of leading enterprises in the industry is low. In 2022, the industry CR3 was about 3.8%, and CR10 was about 9.7%, far lower than that of developed countries in Europe and America. The characteristics of the large packaging printing industry and small companies in China are particularly obvious. With the changes in downstream demand, the tightening of environmental policies, and the acceleration of the industry's digitalization process, these factors will promote the integration and reshaping of the industry chain, and the industry concentration may gradually increase in the future.

II. The wave of environmental protection and digitalization accelerates industry differentiation, and the opportunities in the sub-tracks are eye-catching

China's environmental protection policies have been introduced in a dense manner, proposing higher requirements for the reusability and degradability of packaging. Under this background, the use of plastic packaging has been strictly restricted. For example, in the "Action Plan for Deeply Promoting the Green Transformation of Express Packaging" jointly issued by the National Development and Reform Commission and other departments, it is clearly proposed to promote the green transformation of express packaging, reduce the use of disposable plastic products, and promote recyclable and degradable packaging materials. The restrictions on plastic packaging products have significantly catalyzed the market demand for alternatives. Paper instead of plastic, degradable, and recyclable have become the consensus and trend of industry development.

The trend of stricter green environmental protection policies and the gradual popularization of green consumption concepts have driven the global green packaging market to expand rapidly. The global green packaging market size has grown from $242.5 billion in 2021 to $313 billion in 2024. It is expected to continue to grow at a rate of about 5% from 2023 to 2030, with a broad market space. The green transformation of the packaging industry driven by policy has not only brought new development opportunities to the industry but also accelerated the control and management of energy consumption, leading to the elimination of backward production capacity and optimization of the industry structure.

III. Customer demand upgrades promote the digital transformation of enterprises

With the gradual differentiation of downstream customer demands, small-batch supply, meeting personalized needs, and conforming to environmental protection requirements have gradually become mainstream demands. The upgrade of customer demands has promoted the digital transformation of packaging and printing enterprises, relying on technologies such as cloud computing, the Internet, and the Internet of Things to empower the design and production of products. Digital printing has gotten rid of the restrictions of the plate-making process and can quickly generate different design schemes according to customer needs. It meets the customized and diversified needs of customers, not only improving printing efficiency, reducing printing costs, but also reducing waste and environmental pollution in the production process.

In addition, customers' demands for traceability, anti-counterfeiting, and brand promotion functions of packaging products are increasing. Label printing can carry rich information and achieve brand promotion effects based on this, meeting the needs of customers' personalized marketing and conforming to future market development trends. Printing labels also have unique advantages in anti-counterfeiting, such as printing labels combined with QR code anti-counterfeiting, laser holographic anti-counterfeiting, RFID, and other anti-counterfeiting technologies, which have high anti-counterfeiting and recognizability and can effectively prevent the circulation of counterfeit and substandard products. Printing labels also have significant advantages in information traceability. Combined with IoT technology, they can achieve mobile traceability of logistics and can be widely used in logistics transportation and product information management scenarios, empowering enterprise inventory management and cargo delivery links.Investment Advice

It is recommended to pay attention to industry leaders that cover core high-end fields such as consumer electronics, alcohol, personal care, food, healthcare, and tobacco: Yutong Technology; as well as leading metal packaging companies that provide customers with comprehensive packaging one-stop solutions: Aoruijin.