Development Opportunities and Challenges Facing the Label Printing Industry

Current Development Status of the Label Printing Market

1. Output Value Overview

During the "13th Five-Year Plan" period, the total output value of the global label printing market grew steadily at a compound annual growth rate of about 5%, reaching USD 43.25 billion in 2020. It is expected that during the "14th Five-Year Plan" period, the global label market will continue to grow at a compound annual growth rate of about 4%-6%, and the total output value is expected to reach USD 49.9 billion by 2024.

As the world's largest label producer and consumer, China has seen rapid market growth over the past five years, with the total output value of the label printing industry rising from 39.27 billion yuan at the beginning of the "13th Five-Year Plan" period to 54 billion yuan in 2020 (as shown in Figure 1), a compound annual growth rate of 8%-10%. It is expected to increase to 60 billion yuan by the end of 2021, making it one of the fastest-growing label markets in the world.

In the classification and composition of the label printing market, as shown in Figure 2, the total output value of flexographic printing was USD 13.3 billion, ranking first with a market share of 32.4%. Its annual output growth rate during the "13th Five-Year Plan" period was 4.4%, and its growth rate is being overtaken by digital printing. The vigorous development of digital printing has gradually deprived traditional label printing processes, such as letterpress printing, of their advantages, and their share in the key global pressure-sensitive label market is also shrinking.

Among digital printing processes, inkjet printing is expected to become mainstream. During the "13th Five-Year Plan" period, although inkjet printing grew very rapidly, electrophotographic printing still held a relatively large share of digital printing processes. With the continued high growth rate of inkjet printing applications, its market share is expected to surpass that of electrophotographic printing before 2024.

1. Regional Overview

During the "13th Five-Year Plan" period, Asia always occupied a dominant position in the label printing market, with an annual growth rate of 7% since 2015. The next two largest markets are Europe and North America. These three regions together account for 90% of the global label market share.

China is far ahead in its development in the global label market, and India's label demand has also been gradually growing in recent years. During the "13th Five-Year Plan" period, India's label market grew at 7%, noticeably faster than other regions, and this situation is expected to continue until 2024. Africa's label demand grew the fastest, at 8%, but since its base is not large, this is relatively easy to achieve. The shares of major global label markets during the "13th Five-Year Plan" period are shown in Figure 3.

Development Opportunities for Label Printing

1. Rising Demand for Personalized Label Products

As one of the most intuitive tools for reflecting the core value of a product, personalized brand crossover and personalized marketing achieved through personalization can not only meet the unique needs of consumers, but also greatly enhance brand influence. These advantages provide new ideas and directions for label printing companies.

1. The Convergence Trend of Flexible Packaging Printing and Traditional Label Printing Is Further Strengthened

With the increase in demand for short runs and personalized flexible packaging, together with the impact of national environmental protection policies on flexible packaging production, the phenomenon of flexible packaging and labels merging with each other has further strengthened, and some flexible packaging printing companies have begun to take on some supporting label products.

1. Broad Prospects for RFID Smart Labels

During the "13th Five-Year Plan" period, the overall growth rate of the traditional label printing business began to slow down, while RFID smart labels always maintained an average annual growth rate of 20%. It is expected that by 2024, global sales of UHF RFID smart labels will increase to 41.2 billion units. It can be seen from this that the trend of traditional label printing companies transforming toward RFID smart labels is already very obvious, and laying out RFID smart labels will bring new opportunities to enterprises.

Problems and Challenges Facing Label Printing

Although label printing develops relatively quickly within the entire printing industry and is at the forefront of the industry, the world economy is still in the midst of great development and great change. Many issues cannot be ignored and need to be faced and tackled by us.

At present, most label printing companies generally face the problem of difficulty in attracting talent. The main reasons are as follows: employees' awareness of protecting their own rights has gradually increased, and their requirements for compensation, working hours and working environment are getting higher and higher, which has led to declining employee loyalty and increasing mobility; the labor structure is unbalanced. The key to an enterprise's foothold is having technology, but at the present stage, workers with mature skills are harder to find than advanced equipment. Especially in regions with developed manufacturing, the shortage of skilled workers is particularly serious. Even with continuously rising salaries, there is still a shortage of manpower, and the needs of enterprises cannot be eased in a short time.

For label printing companies, the business environment is becoming increasingly harsh and operations are difficult, which has greatly hindered the further development of label printing. Under the impact of the overall economic environment, corporate profits have declined, while various expenses, such as labor costs, enterprise and product certification and evaluation fees, and environmental treatment fees, have been increasing year by year. In recent years, the state has vigorously advocated green environmental protection and zero-pollution emissions, and the high-pressure policies of relevant departments have sharply increased the pressure on many enterprises. To this end, while improving quality and reducing costs, many enterprises must also continuously increase their investment in labor and in energy conservation and consumption reduction.

Advanced technology and equipment are necessary conditions for supporting the development of label printing companies. In order to reduce labor costs and reduce dependence on labor, enterprises need to carry out intelligent transformation of production technology and introduce advanced digital printing equipment. However, the performance of domestic equipment currently varies greatly, and selecting equipment requires doing sufficient homework in advance and having an extremely clear purpose, and only expert-type talent who truly understands the needs can accomplish and do this work well. In addition, due to the nature of label printing itself, equipment production capacity is insufficient and all-in-one machines are lacking, and this requires the entire industry to tackle key problems in the label printing industry chain.

In early 2020, the sudden COVID-19 pandemic swept the world, and the world economy and the livelihoods of people in various countries were all seriously affected. As the pandemic gradually became normalized, China's economy showed a trend of gradual improvement and steady recovery, fully demonstrating the strong resilience and vigorous vitality of the Chinese economy. We are pleased to find that in the post-pandemic era, the application of digital printing equipment in the label printing field has become more extensive and widespread. Many enterprises have "boarded the ship" one after another, closely following industry development trends and introducing digital printing equipment, which has further accelerated the digitalization process of label printing and further expanded the scale of the label printing market.

Facing a slowdown in future economic growth as well as the impact of multiple factors such as continuously rising labor costs and increasingly stringent environmental requirements, label printing companies should actively face the new situation, meet new challenges with technological innovation, and strive to achieve new development.

The article is excerpted from:

"Development Opportunities and Challenges of the Label Printing Industry" by Zhang Zheng, Manager of the Marketing Planning Department of the Marketing Department, Lucky Huaguang Graphics Co., Ltd.

——This article is reprinted from China Packaging Network (pack.cn). Original link: http://news.pack.cn/show-378592.html