Executive synopsis courtesy of the Association for Print Technologies
Editor’s Note: About This Study
In 2013, NPES/PRIMIR (now APTech/PRIMIR) published the “World-wide Market for Print: Identifying Global Opportunities for the Print Industry (WWMP)” study, providing a comprehensive view of the print market in 51 countries, detailing historical data from 2007 to 2011 and annual forecasts through 2017. In 2016, VDMA joined the research effort with the launch of a new two-phased study continuing the WWMP series to look first at the print packaging market in 26 countries and, in phase II, covering both publishing printing (books, magazines and newspapers) and marketing and commercial printing (brochures, catalogs, directories, inserts and direct mail).
This Executive Synopsis covers both phases for the latest two publications of the WWMP series, with forecasting from 2016 through 2021. The full study scope covered 26 countries representing 80% of global GDP and 70% of the world’s population. These countries were analyzed for potential growth opportunities. Combining a top-down and bottom-up approach, the study delivers five years of historical detail and five-year forecasts for each print product segment. Strategic analysis highlights change drivers, trends within segments, regional and country profiles, in-depth investigation of six key country markets and recommendations for NPES/PRIMIR members. Historical estimates, forecasts and key macroeconomic and demographic indicators also are included.
Print packaging, publishing printing, and marketing and commercial printing are the largest segments in the industry, accounting for the majority of the market. The three segments will total $421 billion in 2020. Print packaging is the largest print segment and will drive print expansion until 2020.
Global dynamics are constantly changing the print packaging landscape. Emerging markets in the Asia-Pacific region offer bright spots along with, to a lesser degree, the Middle East and Africa. The latter two offer high potential, but with a degree of risk as the study reveals opportunities and challenges for all countries studied. Rising incomes and education levels mean Asia-Pacific markets are growing in both publishing printing as well as marketing and commercial printing. However, developed markets in North America and Western Europe are facing challenges. Book printing will remain resilient in many markets, while brochures and catalogs are bright spots as printers and print buyers adapt to the shift to digital platforms.
The outlook for packaging
Print packaging revenues totaled $244 billion in 2016, and will grow to $286 billion in 2020, an average annual growth rate of 5.2%. The global print packaging market is concentrated, with the top five markets accounting for 80% of the total market. The US is the largest print packaging market in the world, at $78 billion in 2016. It is expected to grow steadily during an era of thinning profit margins and consolidation. The second largest market is China, at $69 billion. It will continue to grow strongly through 2020, narrowing the gap with the US. The fastest-growing print packaging market, India, gained three positions since 2011, from eighth to fifth largest in 2016. Indonesia, like India, is a high growth and high potential market, and the Mexican economy will grow at a healthy rate, despite being strongly tied to the US.
Trends in packaging
Economic growth underpins print packaging growth across all countries, with emerging markets facing a more positive economic growth outlook than developed markets. The rise of the middle class translates into more consumers and, therefore, growth for packaging. In addition, more robust urbanization is a key driver of growth in emerging markets.
Developed markets also offer opportunities based on product differentiation. Consumers are willing to pay a premium for differentiation. Packaging can change the perception of a product and act as a price driver. This trend demands innovation and design advances, and print packaging companies are in an ideal position to offer end-to-end solutions to clients. In addition to digital printing for those consumers demanding a diversified array of products, 3D printing offers opportunities during the development and conceptualizing phases. Smart packaging increasingly is being incorporated into product portfolios, along with the use of coding and marketing technology.
Recommendations for packaging
- Invest in key country markets. Top markets by percentage growth (CAGR 2016-2020) include India (12%), Nigeria (10.3%), Indonesia (10.1%) and Vietnam (9.7%). Emerging markets with potential high growth, but with correspondingly higher operation risks, include China, Chile, Saudi Arabia and Colombia.
- Keep up with trends and technologies. The next step for the industry is the further advancement and popularization of digital printing in other segments, such as flexible, folding carton and corrugated.
- Seek value along the supply chain. Add consulting to the list of products and services, lightweighting of packages to make them cheaper to ship and manufacture, developing machine-to-machine technologies and creating internal regulatory and quality assurance teams to monitor the product.
- Stay ahead on green packaging. Consumers are looking for more than recyclable packaging; they want a reduced footprint over its entire production. To this end, companies are creating ways to reduce package weights, redesigning packages with a strong focus on sustainability. Governments are expected to strengthen green packaging regulations.
The outlook for publishing printing
The rise of digital media and decline in print advertising sales will create a difficult environment for publishing printing. Print growth will be dragged down by publishing printing, which will decline at an annual rate of 2% between 2017 and 2020.
India is the bright spot in the publishing printing market. Its large market will grow at 8.1% per year, adding $1.2 billion of revenue from 2017 to 2021. In fact, by 2020, India’s market will surpass those of France and the U.K. By 2021, Asia-Pacific will command 58.5% of the global market for publishing printing products, with Western Europe claiming only 18.6% and North America 15.2%.
In addition to India, the top four compound annual growth rates from 2017 to 2021 (in local currency) include Vietnam (6.1%), Indonesia (4.2%), Philippines (3.2%) and China (1.2%). Compare that to negative growth rates for countries such as the US (-5.4%), Germany (-6.2%) and Canada (-5.9%).
The outlook for marketing and commercial printing
In general, marketing and commercial printing has been performing better than publishing printing, with brochures and pamphlets leading the way. This category’s growth will fluctuate in the coming years as emerging markets pick up. In the US, marketing and commercial printing will decline from 2017 ($13.7 billion) to 2021 ($12.7 billion). By 2021, Western Europe (39.6%) will dominate this $62.6 billion market, followed by Asia-Pacific (30.9%) and North America (23.1%). The top three growth markets for marketing and commercial printing are concentrated in Asia-Pacific, notably Indonesia (8.2%), India (7.7%) and Vietnam (6.1%). Other top growth markets include Turkey (3.6%), Philippines (3.5%) and Colombia (3.0%).
There is much fluctuation within the marketing and commercial printing segments. This reflects changing strategies among brand owners and advertising agencies. Overall, brochures and pamphlets, along with catalogs, show favorable growth from 2017 to 2021. In addition, market potential during the same period is high. Overall market potential is a qualitative assessment of growth opportunity from 2017 to 2020.
Direct mail is predicted to show unfavorable growth from now until 2021. However, it remains a stable market for the foreseeable future. In addition, personalization and the opportunity to capitalize on multi-channel or omni-channel marketing approaches offer some, albeit low, overall market potential.
Trends in publishing printing and marketing/commercial printing
Access to telecommunications technology includes not only the internet, but the expansion of mobile network coverage. Even in emerging markets, 71% of the population has access to at least 4G networks, while 96% has at least 2G coverage. As a result, printed magazines and newspaper subscriptions and circulations are declining as content moves to online platforms. Printed books, however, still prevail over e-books. Overall, consumers will be reading less and watching more.
While advertising moves away from print, governments are introducing new regulations to protect data and privacy. While it is likely these regulations will not directly affect print, they still have effects on the industry. The EU’s General Data Protection Regulation (GDPR) became effective in May 2018; China’s similar data protections already were put into use in June 2017. Digital marketing will be most affected by these regulations, as consumer information is used to target digital advertising, as well as printed direct mail, catalogs and brochures.
As multi-channel advertising grows, printers are leveraging the internet and cloud technology to automate processes and grow print-on-demand services. Personalization of print marketing enables better consumer targeting, and web-to-print services give control of the production process directly to consumers.
Recommendations for publishing printing and marketing/commercial printing
- Invest in key country markets. India, Vietnam, Indonesia and Philippines lead the market in growth percentage and added value. India and Indonesia also lead the pack in terms of dollar growth, along with China and Germany. In addition, top emerging markets based on overall business environment include Chile, Mexico, Saudi Arabia and Brazil. Keep in mind that Saudi Arabia and Chile also are high in operational risk factors.
- Identify key opportunities. This may include incorporating digital technology to streamline printing services and allow customization. Since growth is mixed among printing segments, diversification into growing markets – while using or adapting the same equipment, process and distribution channels you have – is a sound approach. Digital marketing can provide brand owners with more consumer data, so adopt tracking technologies and engage customers throughout the buying experience.
- Seek value along the supply chain. First maximize your capabilities and efficiency. Then be sure you are providing valuable services to your customers. Consolidate content management for clients. Harness the power of data analytics by investing in human capital. It is a key component for success.
- Adapt to changing market dynamics. To effectively compete in the industry, printers, OEMs and brand owners need to keep up with trends and technologies as well as regulations that directly and indirectly affect the industry.
The Association for Print Technologies (APTech), formerly known as NPES, is a purpose-driven organization dedicated to supporting the entire commercial printing value chain. APTech helps members maximize alignment with their value chain partners to be more effective and competitive. Visit www.aptech.org for more information.