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Paper industry looks towards eCommerce for growth

06 November 2017

There is future for paper yet, and during Paperex 2017, exhibitors were of the opinion that eCommerce boom will help the paper industry enter a new phase of growth. With the increasing number of internet users and rising middle class with more disposable income has boosted the demand for paper packaging products in the shipment industry. According to Goldman Sachs estimates, the size of Indian eCommerce market will be USD 228 billion, which will be still below the size of the market today in China (USD 328 billion) and the US (USD 281 billion), but close to ten times as large as India’s market is today. There is a double digit growth in Indian eCommerce startups received in last two-three years.

img-6718 A session during the International Technical Conference

Industry leaders discussed the subject during the International Technical Conference held on the sidelines of Paperex 2017 at Pragati Maidan, New Delhi from 1 to 3 November 2017.   

RN Agarwal, MD of NR agarwal Industries said due to the ban of small packaging paper industries in China as a result of stringent pollution norms, world eCommerce player are looking at the Indian market to procure quality packaging paper and packaging solutions. There will be a strong growth in future as world consumers need quality products and growth in India. As per a recent study, if China cuts down production due to pollution and water discharge problems by eight million tonnes, the demand will be huge in India and nobody can fill the demand-supply gap.

MJP Narain, CEO, Century Paper, said the packaging demand is growing at the rate of 9.5% in recycle packaging board and around 15% in virgin packaging board. He expects that eCommerce growth trends will continue and the impact of the same will be much more in the coming years.

Speaking on the success of Paperex 2017, Sanjeev Batra, director, ITE India, said the per capita consumption usage in India is just 12.5 kg as compared to 57 kg in US. In developed economies, paper is extensively used due to recycle feature and due to the environment norms. In India trends are changing. Big brands are using new high quality printing and paper for packaging solutions which are environmental-friendly. For every rise of 1 kg on per capita basis, we need 1 lakh tonne of capacity. The Indian paper industry is likely to get the full benefit of investments in capacity expansions as Swach Bharat Abhiyan, Beti Padao Beti Bachao programmes and CSR initiatives by private companies in the field of literacy in rural India are in full swing. 

For paper and pulp manufacturing units, eCommerce is also changing the ways of doing business. The idea of always selling the traditional way of manufacturing to retail only is dying, and businesses need to embrace the idea of working in a multi- or omni-channel environment, to include eCommerce, in order to achieve a positive growth and return on investment. Consumers are growing more powerful through social media and the internet, and manufacturers must be ready and willing to adapt to their demands in 2016. Failure to do so would be a futile in a world where a dead smart phone is tantamount to a wasted day.  

Benefits of eCommerce application in manufacturing and industrial distribution

eCommerce is a way for manufacturers to experiment with new products without risking a significant investment. Instead of setting up brick-and-mortar stores, or keeping inventory on hand, you can start offering this new product on your new store. The benefits include:

Direct access to customers: Besides having higher profit margins, you will interact with customers, letting you learn from them and fine-tune products.

More prospects: A larger arena yields more sales possibilities, although you have to be cognisant of your existing distributors. Potential problems can often be sidestepped by offering your products to a different market, so you are not competing with your current network.

Opportunities to innovate: Finding customers outside your existing relationships also frees you from the specs you have to adhere to now. If you have an idea for a better product, you can act on it, allowing for product analysis and iteration over time based on what your customers wants.

Scalability: An effective application of eCommerce in manufacturing will enable your organisation to grow and scale easily to meet market demand and customer needs by opening new sales channels and continuously reaching new market segments.

Improved efficiencies: Through integration to the enterprise resource planning (ERP) and other back-end business systems, ecommerce provides marked efficiencies for manufacturers. Customers are able to order online whenever and wherever suits them, customer service can focus on actual customer service functions – such as transparent freight shipping costs and timely shipping – rather than simply being order takers, and the need to rekey data in independent systems is eliminated, thereby eliminating the possibility of errors and improving shipping processes and increasing order throughput.

Improved brand awareness: Just as eCommerce can help manufacturers and industrial distributors find new customers, so can it help improve brand awareness in the market place. Developing pages that can be indexed by search engine crawlers is the fastest way to improve your site’s search engine optimisation and improve the likelihood that your target audience will know who you are.

Analytics: The application of eCommerce in manufacturing provides the perfect platform for an organisation to launch a comprehensive analytics campaign. Through eCommerce, manufacturers and distributors can measure and evaluate marketing campaigns, sales effectiveness, product mix, inventory turns, customer sales effectiveness, and customer engagement like never before. When combined with a freight shipping application in the shopping cart which is bolted onto a transportation management system, you truly can use data to make better and better business decisions that impact the bottom line.

Manufacturing is rapidly moving toward a multi-channel commerce model that integrates several channels (online, print catalogues and sales teams) into a single, unified ecosystem. Those manufacturers who achieve effective application of eCommerce in manufacturing stand to have a competitive advantage above those manufacturers stuck in a brick-and-mortar only world. Looking ahead, leading manufacturers will take the multi-channel concept a step further and prioritise the implementation of omni-channel commerce platforms — technologies that deliver seamless shopping and fulfilment experiences across all possible connection channels.

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