Market Trends of Middle East & Africa Paper Bags Industry
The Retail Segment is Expected to Address a Major Demand
- The retail industry is witnessing significant growth, with quick-service restaurants (QSRs) increasingly turning to disposable packaging, particularly paper bags, to mitigate environmental risks. Paper bags are favored for their biodegradability, reusability, and recyclability. Moreover, the rising trend of social gatherings during special occasions further fuels the demand for paper bags in the country.
- The recyclable nature of paper stands out as a pivotal factor propelling the market's expansion, enabling vendors to align with sustainability objectives. Additionally, the government's stringent regulations on plastic usage and the increasing consumer awareness regarding environmental conservation are further driving the adoption of paper bags. The market also benefits from technological advancements in paper bag manufacturing, which enhance durability and functionality, making them a viable alternative to plastic bags.
- The Abu Dhabi Environment Agency has also banned single-use plastic bags. At the same time, the Dubai government is set to introduce new charges aimed at curbing the use of single-use plastics in the Emirates. These bans and government initiatives are poised to expand the paper bag market in the region. Moreover, with a rising influx of tourists and developing economic activities in the retail sector, the demand for paper bags will surge in the coming years.
- The rise of e-commerce has profoundly reshaped the retail landscape. This transformative trend, altering consumer habits and retail frameworks, is gaining momentum, particularly in the Middle East. The sector holds immense promise for industry players, buoyed by robust per capita income, advanced logistics, expanding internet access, and tech-savvy consumers. Retail sales in Saudi Arabia have shown an upward trend from USD 126.10 billion in 2021. They are projected to reach USD 155.60 billion by 2024, creating an opportunity for the paper bag market with a focus on the ban on alternative packaging options.
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The United Arab Emirates is Expected to Hold Significant Share in the Market
- The United Arab Emirates (UAE) emerges as a frontrunner in the Middle East's online market, propelled by a tech-savvy populace and a proactive government keen on nurturing a digital economy. With robust infrastructure, streamlined logistics, and business-friendly laws, coupled with Dubai's rising prominence as a regional e-commerce hub, the UAE's e-commerce landscape is thriving. This surge in online commerce draws local startups and global enterprises to establish their presence, cementing Dubai's status as a premier e-commerce destination. This attracts global paper bag companies that are also spreading their presence in the region and collaborating with domestic manufacturers and delivery partners, which boosts the need for packaging in various end-user segments.
- Further, policy and compliance significantly influence the trajectory of the paper bag manufacturing industry. With tightening regulations on single-use plastics, manufacturers are compelled to adhere to the region's stringent environmental and waste management standards. Shifting consumer preferences and the surge in e-commerce and home deliveries fuel a rising appetite for paper bags. This trend reflects evolving consumer behavior and presents a lucrative avenue for businesses to explore. The increased demand for sustainable packaging solutions allows manufacturers to innovate and expand their product lines to meet market needs.
- Deliveroo UAE reports robust growth in its on-demand grocery segment, marked by a substantial surge in grocery orders nationwide. In 2023, the platform witnessed a twofold increase in on-demand grocery sites, with orders spiking by 62% in Dubai and 135% in Abu Dhabi, underscoring a dedicated response to shifting consumer demands. This growth reflects Deliveroo UAE's strategic expansion and creates opportunities for paper bag manufacturers in the region.
- Further, as per the USDA Foreign Agricultural Service, the retail value of food e-commerce in the United Arab Emirates grew in 2020; it was USD 421 million, which increased to USD 1,072 million. This has also created a market for the use of paper bags in food delivery.
- E-commerce companies have different innovations and collaborations to promote sustainability and create market opportunities. For instance, Deliveroo UAE, a prominent player in the online food delivery sector, has unveiled a new web-based packaging store, aligning with its Environmental, Social, and Governance (ESG) strategy. In collaboration with eco-conscious Sineo Packaging, a player in recyclable and biodegradable solutions, the initiative brings expertise to this partnership. Through the platform, Deliveroo's restaurant partners gain access to a selection of 20 eco-friendly items, ranging from paper bags and bottles to food containers, napkins, and cutlery.
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