White paper for Gallus

By AWA Alexander Watson Associates

 

Highlights of Developing Markets across the Globe

 

Prior to the global pandemic, according to the IMF, the global economy was projected to grow at 3.6% in the current year – a figure that AWA forecast would be higher than growth in the mature label markets of Europe and North America. However, it is not possible to make a serious growth estimation for the near future, so all existing forecasts are given with reservations.

AWA are actively studying the current situation in the label markets around the globe and will be appending special COVID-19 supplements to its 2020 label market studies. More activity was forecast in the world’s developing packaging and labeling markets – Asia, Africa and the Middle East, and South America. While these regions are all significantly different, they share in some measure the dynamism created by developing urban-based populations with increasing purchasing power and retail and online sales.

 

Both regional and global brand owners around the world are, as a result, investing in the expanding opportunities for consumer on-pack promotion and ‘smart’ labeling in these developing economies –especially across Asia. Transport and logistics label activity, and product authentication/security labeling are also benefitting. Increased levels of competition between label formats and alternative packaging styles are also noted, as the developing regions follow the fashion in the developed markets – particularly in terms of cans for beverages, and flexible packaging for foods.

 

The pan-Asian market

The pan-Asian market is currently the world’s largest label market, with a 45% share of global demand. It embraces a number of different countries and nationalities, from Australasia to India, Japan, Taiwan, and China itself. While growth has slowed from earlier levels, the region’s label market continues to broaden at a healthy rate – at 4.7% in 2019 – driven mainly by China, India, and South East Asia, reflecting the acceleration in industrial manufacturing, as well as in the retail economy.

 

China, Japan, Korea, Taiwan, and Malaysia are the leading global manufacturing sources for consumer durable products – especially electronics – and durable pressure-sensitive labels meeting such international standards as WEEE, RoHS, IMDS and UL are therefore also in high demand, and likely to be used increasingly.

While glue applied label formats have enjoyed modest growth, the current pan-regional focus on the use of pressure-sensitive primary product labels for foods and for transport and logistics is likely to broaden considerably. In China, India, and Japan, pharmaceuticals are now an emerging market for advanced pressure-sensitive formats such as security labels.

In terms of end-use label markets, beverage is once again the largest in Asia by far, representing 47% of the total, with food labeling in second place at 23%. Sleeve labels continue to provide the main source of competition to pressure-sensitive and glue applied labels in the food and beverage market segments, and to in-mold labeling (IML) formats in household chemicals.   In 2019, sleeve labels claimed a 28% overall share, as well as 33% of the primary product label market. The sleeve label technologies grew across the region by an estimated 5.5% in 2019, with the highest percentage increase evidenced by RFS/ROSO MD sleeve labels, although volumes for this format are low.

 

While mainland China’s label market is expected to continue to enjoy growth, it has been negatively affected by the ongoing trade wars with USA; recent domestic and US tariff increases; and the lockdown created by the major coronavirus outbreak, which is impacting both production and export sales to other regions.

 

Read next week: Africa and the Middle East