By Hiroyuki Kikumoto, General Manager, Mitsubishi Heavy Industries Europe, Corrugating and Printing Machinery Division
The age of the internet is a truly wonderful thing: one can pretty much buy whatever you want from wherever you are in the world and have it sent to you.
From books, food, fine wines and toys to car parts, clothes, make-up and wallpaper, the list of things you can have sent from the likes of Amazon, eBay, Alibaba and Rakuten is endless.
But one aspect of e-commerce we take for granted is the packaging. It’s a simple but profound thought when you let it sit in your mind for a minute.
Everything needs a box. Without the boxes, the whole system simply would not be able to function. And these boxes are made out of a specific material called “corrugated cardboard.” In fact, so important is this unsung hero to the development of the fourth industrial revolution that the global brown-box making industry is predicted to be worth $204 billion by 2023, up from $169 billion in 2017.
Mitsubishi Heavy Industries Group (MHI) has been making corrugated box-making machines since 1960 and has been at the forefront of the industry ever since. For example, MHI developed the first computer-controlled systems for box-making machines in the 1980s and manufactures one of the fastest box-making machines in the world. This works at a speed of 450 m/min. The largest box it can produce holds 215 litres, and the machine can make 400 box sheets per minute.
But continuing to develop corrugated cardboard-making technology, particularly to produce more it, at a faster rate, and in more flexible designs will be essential to keep pace with the trends we’re seeing in the e-commerce world, to which the corrugated cardboard industry has a deeply symbiotic relationship.
E-commerce is at an inflection point
According to a report in The Economic Times, the e-commerce industry is going through an inflection point which is largely driven by an increasing number of mobile (smartphone) shoppers. The ability to shop from our phones has caused explosive growth in the e-commerce industry. And not just in the developed world.
According to the International Telecommunications Union’s Facts and Figures for 2017smartphone penetration in the developing world hit 98.7 percent in 2017. The base of consumers with the potential to shop on impulse with a few taps and swipes of their fingers is now broad and deep.
Keep one eye on India
India’s e-commerce industry is racing to catch up to America’s growth forecast . India’s e-commerce growth forecast is projected to rise from $38.5 billion as of 2017 to $200 billion by 2026. Unsurprisingly, this rapid growth is being triggered by increasing internet and smartphone penetration.
In fact, by 2034 India is expected to surpass the U.S. as the second largest e-commerce market in the world (second only to global e-commerce juggernaut China).
And another eye on Latin America
Latin America’s flourishing e-commerce market heralds boom times ahead for the corrugated cardboard industry. Brazil, the largest market in the region, had retail e-commerce sales upwards of $16 billion in 2017. No one expects this number to go anywhere but up as digital payment options and wider credit card options become available to Brazilians.
The advertising industry sees vast potential in corrugated cardboard
One of the most appealing things about boxes to manufacturers and marketers is that they can carry printed messages, meaning branding can be easily placed in front of consumers.
The ability to add coloured dyes for bespoke orders, combined with the agility of modern box-making machinery to change the size and shape of boxes at high speed and for variable quantities, offers the potential of greater personalisation for the final consumers.
Then there is the potential for highly targeted ads on the boxes. Just like Google surfaces incredibly relevant ads for users because they have the prior information of what you searched for, advertisers will be able to select and tailor ads to consumers with the prior knowledge of the ad being physically next to an item the consumer has already purchased.
Environmentally friendly at the right time
In our increasingly environmentally conscious society, consumers are actively making choices based on environmental impact. The corrugated cardboard is benefiting from these culturally conscious consumers.
As well as being strong, light and easy to produce, corrugated boxes have strong environmental credentials. They are 97 per centrecyclable and can be produced from recycled materials. About 29 million tons of corrugated cardboard is generated annually in the US, and more than 89 per cent of this was recycled in 2014, according to the Environmental Protection Agency.
MHI are working furiously to improve the quality, reliability and quantity of its corrugated cardboard-making machines. Because, as we’ve seen, the world is going to need a lot more boxes.