Market Trends of Nigeria Packaging Industry
The E-commerce Industry is Growing Rapidly
- The landscape of commerce in Nigeria has undergone a significant transformation in recent years, fueled by the rapid growth of digital technology. The emergence of the e-commerce industry has not only altered the way businesses operate but has also reshaped consumer behavior in Nigeria.
- The rise in e-commerce drives the demand for packaging solutions, specifically in the corrugated packaging industry, which requires sturdy and protective packaging. Improvements in printing technology make corrugated packaging more visually appealing when used for branding. The demand for affordable and environmentally sustainable corrugated solutions is increasing due to urbanization, population growth, and regulatory compliance.
- The rise in online shopping has resulted in an increasing need for packaging materials that are both long-lasting and capable of protecting delivery. Corrugated packing is the best option because it offers resistance and strength. Additionally, since corrugated materials are customizable, e-commerce companies can use packaging as a branding strategy to increase product visibility.
- Nigeria has not been left behind in the e-commerce revolution, as it has become one of the fastest-growing industries in the country. With the increase in internet penetration, e-commerce platforms have seen significant growth in recent years. According to the National Bureau of Statistics (NBS), e-commerce spending in Nigeria was estimated to be USD 13 billion in 2022 and is projected to rise to about USD 75 billion by 2025. This growth can be attributed to factors such as the mobile revolution, the rise of social media, and increasing consumer confidence.
- The burgeoning industry has seen the birth of homegrown e-commerce platforms such as Jumia (Nigeria). Nigeria is witnessing a boom in the e-commerce industry owing to growing urbanization and consumer spending, growth in internet users, and the emergence of several startups in the region. The growing e-commerce industry in the country is expected to increase the demand for packaging solutions, such as plastic packaging, carton boxes, and corrugated packaging.
- Furthermore, according to the country's e-commerce market outlook released by the National Bureau of Statistics (NBS), the number of online shoppers in Nigeria is expected to hit 122.5 million by 2025 from 76.7 million in 2021. Such investment by e-commerce companies, the government's plan to increase the investment in the e-commerce sector, and growth in the number of online buyers in the Nigerian market are likely to create a demand for different packaging solutions, especially paper and paperboard and plastic packaging solutions.
- The rising internet penetration and smartphone usage in Nigeria have resulted in unprecedented growth in the e-commerce industry, thus boosting the demand for packaging in the country.
Understand The Key Trends Shaping This Market
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Increasing Demand from the Food Industry
- The online food delivery industry in Nigeria has seen tremendous growth over the past few years. The increasing internet penetration and advancements in food delivery apps boost the market growth. Food delivery apps and websites are transforming how people order and access meals in major cities across the country. The rising popularity of food tech companies like Jumia Food, Glovo, and Bolt Food has introduced convenience and simplicity in ordering meals from the comfort of home or office.
- Nigeria is majorly driven by rapid urbanization and an increasingly tech-savvy population. In line with this, the rising adoption of digital services, including online food delivery, is catalyzing the market. The convenience offered by these platforms aligns with the busy lifestyles of urban residents, making it an attractive option for quick and hassle-free meal solutions. Moreover, the proliferation of smartphones and affordable internet connectivity has expanded the reach of online food delivery services, allowing a larger population to access and utilize these platforms.
- As these platforms continuously enhance their technology, optimize delivery logistics, and collaborate with an expanding network of restaurants, the market is poised for sustained growth, providing economic opportunities and convenience to consumers nationwide.
- The ease of online food ordering has made it accessible to a wider audience, thus driving market growth in the country. Also, the rising population in the country has increased the demand for convenient food ordering services.
- In recent years, the market has grown more sophisticated with the entry of on-demand delivery platforms like Glovo, Bolt Food, and Sendy. These companies maintain their fleet of delivery riders and have expanded food delivery options for consumers, enabling them to offer quick doorstep deliveries from a wider range of restaurants and food businesses.
- With rising investment, maturing business models, and rapid digitalization across Africa, the food delivery industry in Nigeria is estimated to grow exponentially in the coming years. Consolidation is also on the horizon, and major players could acquire smaller startups once the ecosystem matures. Overall, seamless online food delivery looks set to become an integral part of modern urban lifestyles in cities across Nigeria.
- An increase in the number of challenges for key brands and new market entrants that offer lower-priced products in key categories as consumers become increasingly price-conscious and more eager to experiment with new, lower-priced products. Thus, manufacturers are adopting the trend of smaller packs for the various product categories.
- Growing investment in Nigerian retail chains boosts the demand for food packaging. In January 2023, Africinvest, a private equity firm in Africa, invested in the Nigerian supermarket chain Justrite via its Africinvest Fund. Justrite will likely use this investment to expand its footprint in Nigeria.
- Further, when exporting fruits and vegetables, packaging is a critical aspect that cannot be overlooked. Not only does it ensure the produce reaches its destination in good condition, but it also determines the efficiency of the export process. In recent years, lightweight foldable export crates have gained popularity among exporters due to their numerous advantages over rigid crates and cartons.
- In April 2024, the AgroFood Trade Show in Lagos exhibited growth opportunities for Nigeria's agriculture packaging sectors. ADECO, a Nigerian processing and packaging company, exhibited its products at the exhibition.
- Packaging is a critical aspect of exporting fruits and vegetables, and exporters need to choose the right packaging option to ensure their produce reaches its destination in good condition. While cartons and rigid crates have been popular packaging options for a long time, lightweight foldable export crates offer several advantages that make them a better option for packaging.
- According to the latest data published by National Bureau Statistics, Cocoa beans, sesamum seeds, cashew, and seven others top the list of agricultural commodities Nigeria exported in the first quarter of 2023, generating NGN 279.64 billion in revenue. The growth of import and export business in the country for food products required proper packaging solutions, which boosts the packaging industry growth in Nigeria.
