What Are the Prospects for the Tobacco Packaging Industry? Market Size Set to Expand Further

The tobacco packaging industry is an important part of the national economy. With economic development and rising living standards, market demand in the tobacco packaging industry remains relatively large. Tobacco packaging refers to the packaging of tobacco products. Tobacco packaging materials mainly include cigarette inner liner paper, label paper, seal paper, cigarette packaging film, tear tape, and so on.

I. Market Survey and Analysis of the Tobacco Products Industry

From the perspective of the industrial chain structure of the tobacco industry, its upstream is mainly tobacco cultivation; the midstream and downstream are the production, circulation and sales of tobacco. Because China's tobacco industry operates under the management system of "unified leadership, vertical management, and monopoly operation", the entire tobacco industrial chain in China is led by China Tobacco Industrial Companies and the Tobacco Monopoly Bureau. The Monopoly Bureau is responsible for tobacco purchasing, tobacco production is handled by local tobacco factories, and the finished cigarettes produced by the tobacco factories can only be sold to the Monopoly Bureau, which then sells them to wholesalers, thus forming a huge production and sales system.

In the Notice on Adjusting the Consumption Tax Policy on Tobacco Products issued by the Ministry of Finance and the State Taxation Administration, cigarettes priced at 100 yuan/carton and above (excluding value-added tax) are classified as Class I; 70-100 yuan/carton (excluding value-added tax) as Class II; 30-70 yuan/carton (excluding value-added tax) as Class III; 16.5-30 yuan/carton (excluding value-added tax) as Class IV; and below 16.5 yuan/carton (excluding value-added tax) as Class V. High-grade cigarettes are distributed in Class I and Class II; mid-grade cigarettes are mainly concentrated in Class III; and low-grade cigarettes refer to Class IV and Class V.

The tobacco products industry is widely planted across provinces and autonomous regions in both northern and southern China. At present, a total of 24 provinces and autonomous regions in China carry out the cultivation and production of tobacco leaves, and 6 major tobacco production regions have been formed. Among them, Yunnan is China's largest tobacco leaf producing province, and tobacco is also an important part of Yunnan's agricultural industry, occupying a very important position in the economic development of Yunnan Province. The annual output of the tobacco products industry was 835,400 tonnes, accounting for as much as 38.79% of the national total tobacco leaf production scale of 2,153,400 tonnes.

Given the externalities of the tobacco products industry, especially the harm that tobacco products cause to public health, the government is adopting scientific systems to regulate the production, circulation and consumption of the tobacco industry, so as to achieve the goal of healthy and sustainable development of the tobacco industry while safeguarding the health of smokers as much as possible.

China has nearly 140 million small and micro business owners, accounting for more than 95% of all types of market entities in the country, among which there are more than 5 million small shops engaged in the tobacco industry. They are the capillaries of social retail, a solid guarantee for people's livelihood needs, and an indispensable link in the economic ecosystem.

II. Analysis of the Market Size of the Tobacco Packaging Industry

In 1890, cigarettes began to enter China's commodity market, and factory manufacturing started in 1893. Cigarette production and sales increased year by year, and the market size of China's cigarette industry continued to expand, developing in a direction conducive to market growth. In 2022, China's cigarette output grew from 2,352.576 billion cigarettes in 2016 to 2,432.150 billion cigarettes, and from January to April 2023, China's cigarette output was 1,008.490 billion cigarettes.

China Tobacco is the world's largest tobacco producer, and its influence in the international market has attracted much attention. Since the reform and opening up, the packaging of Chinese tobacco has achieved rapid development, and packaging upgrades and replacements have been dazzling. As far as paper cigarette packet packaging is concerned, from soft packs to ordinary white cardboard hard packs, to glass card, to the aluminum foil gold and silver card paper that has been popular in recent years, and then to the introduction of high-grade frosted technology using PET laminated card paper, tobacco packaging has always been at the forefront of the national packaging industry, forming a new fashion of "for paper packaging, look at cigarette packs".

After entering the 21st century, the tobacco sector in central and western China took the lead domestically in launching laser rainbow card paper hard cigarette packets, and drove other cigarette factories to adopt laser rainbow card paper (holographic card paper). In 2020, the market size of China's tobacco packaging was 4.315 billion US dollars; it is expected that by 2023 the market size of China's tobacco packaging will reach 4.517 billion US dollars.

The tobacco packaging industry is an important part of the tobacco industry and an important component of the tobacco industry. At present, China's tobacco packaging industry presents the following characteristics:

1. Large market demand. Tobacco packaging is an indispensable part of the tobacco industry. With the continuous development of the tobacco industry, the market demand of the tobacco packaging industry is also growing continuously.
2. Fierce market competition. There are numerous enterprises in the tobacco packaging industry, and market competition is very fierce.
3. A wide variety of products. There is a wide variety of tobacco packaging products, including both traditional materials such as paper, plastic, and aluminum foil, and new materials such as degradable materials.

III. Major Competitors in the Tobacco Packaging Industry

There are numerous enterprises in the tobacco packaging industry, and the main competitors include the following:

1. China Tobacco Packaging General Company (hereinafter referred to as "China Tobacco Packaging"): China Tobacco Packaging is the largest enterprise in China's tobacco packaging industry, with relatively strong technical strength and brand influence.
2. Shanghai Tobacco Packaging Printing Co., Ltd. (hereinafter referred to as "Shanghai Tobacco Packaging"): Shanghai Tobacco Packaging is one of the well-known enterprises in China's tobacco packaging industry, with advanced technology and equipment.
3. Yunnan Baiyao Group Co., Ltd. (hereinafter referred to as "Yunnan Baiyao"): Yunnan Baiyao is an enterprise with relatively strong strength and brand influence, and its tobacco packaging products have a certain competitiveness in the market.

IV. Market Prospects of the Tobacco Packaging Industry

1. The trend of consumption upgrading is obvious. With the improvement of people's living standards and changes in consumption concepts, consumers are placing higher and higher requirements on tobacco packaging. In the next few years, the tobacco packaging industry will develop in the direction of high quality, personalization, and environmental sustainability.
2. Technological innovation will become the core of competition. Market competition in the tobacco packaging industry will become increasingly fierce, and technological innovation will become the core of enterprise competition. In the next few years, tobacco packaging enterprises will strengthen technological research and development and launch more advanced, high-quality products.
3. Environmental sustainability has become an important direction for industry development. With the improvement of environmental awareness and policy support, the tobacco packaging industry will also develop in the direction of environmental sustainability. In the next few years, tobacco packaging enterprises will strengthen the research and application of new materials such as degradable materials, and launch a series of environmentally sustainable products.

In summary, the tobacco packaging industry is an important part of the tobacco industry. With the continuous development of the tobacco industry, the market demand of the tobacco packaging industry is also growing continuously. In the next few years, consumption upgrading, technological innovation, and environmental sustainability will become important directions for the development of the tobacco packaging industry. Tobacco packaging enterprises will strengthen technological research and development and product innovation, launch more advanced, high-quality, and environmentally sustainable products, and at the same time strengthen corporate management and brand building to improve their core competitiveness.

——This article is reprinted from China Packaging Network (pack.cn). Original link: http://news.pack.cn/show-379403.html