China's packaging market is the largest in the world and is predicted to grow to €75 bln pa by 2012, according to Edge, the packaging consultancy arm of STFI-Packforsk. The report estimates that by 2012 the packaged foods market will total 119.6 mln tons. The report predicts stable growth for the packaging industry of at least 10% pa over the next five years, with some applications exceeding 20% annual growth. Demand for flexible plastics, folding cartons and corrugated cases is expected to be highest.
However, as per the report, the country's market dynamics are not easily understood by western companies,as the large western retail groups have underestimated the significance of the differences between Western and Eastern markets. In the two markets, not only does consumer purchasing behaviour differ, but supply chain infrastructure poses different logistics challenges to those in the West. Simply transferring business models from the West to the East is unlikely to work at this stage in China's development.
Vertical integration and market concentration characterize the Chinese food industry. For example, the top three instant noodle manufacturers accounted for 69.8% of sales by value in 2006, up from 66.7% the previous year.
24-Jun-08 
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