If the past year is anything to go by, packaging is growing exponentially. According to Smithers’ 2023 report, The Future of Global Packaging to 2028, the global packaging market is expected to grow from USD 1.17-trillion to USD 1.42-trillion by 2028, with a compound annual growth rate of 3.9%.

Packaging: The silent force behind purchase decisions
Gen Z (born between 1997 and 2012) are digital natives — the first to have grown up around the Internet.

They use eCommerce and quick commerce extensively and are more used to instant gratification than other generations. This generation is also more worried about the effects of climate change and the need for sustainability.

As the latest generation to enter the workforce, its purchasing power is under the microscope. According to a report compiled by Snap and the Boston Consulting Group (BCG), Gen Z’s collective spending power is expected to reach USD 2-trillion in India by 2035. Their direct spending will amount to USD 250-billion next year when every second Gen Z will be part of the organised workforce.

 

When purchasing something, what does Gen Z consider?
Invariably, the thing that affected whether the respondents purchased a product was the price. All of the respondents cited this as their first consideration. A close second was whether they were getting bang for their buck in quantity (30.22% overall) for that price. 

 

There is an array of options for Gen Z to purchase their products, ranging from humble kirana stores to the new animal, quick commerce. Unsurprisingly, 49.5% of this cohort, leans heavily toward quick commerce. This shift can be attributed to the accessibility, instant gratification, and convenience of the vertical. Meta recently studied 2,500 netizens from ages 16 to 64. It identified quick commerce platforms as favoured for purchasing daily essentials — 85% of the respondents chose it for food and grocery.

 

According to a report by Statista, “By 2028, it is anticipated that the number of users in the quick commerce market in India will reach 56.4-million users.” The growth is all the more evident with Amazon India’s decision to launch its quick commerce delivery service, Tez, by the end of this month or early in 2025.

Consumer focus: Examining the product 
 

Green is the new black
Gen Z is often referred to as the “eco-conscious” generation. But, according to our survey and other sources, we may be a long way from any meaningful effort toward the lofty goal of sustainability.

In terms of consumer education, only 16% of the respondents admitted to being able to distinguish between the types of plastic that are used in packaging. Just 37.5% of them said they could distinguish between the recyclability criteria for different types of packaging materials like plastics and corrugated boards. This shows a gap in how educated the general public is about sustainability. 

 

According to McKinsey & Company, something sets Gen Z in the Asia Pacific region apart from the rest of the world. A report by the company says, “They want to be seen as environmentally conscious, but they often don’t want to pay for this.”

 

It also points to the problems with waste collection systems in our country, whether at the micro or macro level — a concern that has taken the stage at various conferences this year. Experts across the packaging industry emphasised the need for a watertight waste collection system, which would be the first step in successfully following the 3 R's.

Whether the onus of this knowledge is on Gen Z is debatable. The question is whether this generation differs from its predecessors in this context. Ernst & Young’s Generational Sustainability Survey 2023 said, “50% of all the respondents, across generations, pointed to the cost of achieving a sustainable lifestyle as the primary barrier for increased sustainability. They also said the lack of tangible sustainability knowledge is the next biggest barrier.”According to this report, social media has emerged as the primary source of information on all things sustainability.

Perhaps government or CSR efforts in this direction would be far more beneficial, both in the way in which we segregate waste at home and how it is repurposed and disposed of.

Smart packaging, more purchase
The report by Snap and BCG also said, “Gen Z buys as many times as millennials (born between 1981 and 1996) and is 1.5 times more likely to research their purchases.” To that end, what does this generation do when they encounter a badly packaged product? How does it impact their decision to buy it? 

A respondent said, “If some packaging is puffed, I tend not to buy it. I view packaging as an indicator of the quality of the product it holds within. Bad packaging is an instant red flag for me, particularly if the product is puffed or squished.”

Another respondent said, “I am more likely to purchase a different product with better packaging. However, if I have to purchase a badly packaged product, I will only buy the product again if I like the quality and price.”
The sustainability question struck again when we asked Gen Z what they did with the packaging after unboxing the product. By and large, Gen Z discards the packaging, especially when it is heavy on branding. A respondent said, “I do preserve the packaging if the product is a substantial purchase like a smartphone. Otherwise, straight into the trash.”

Another respondent said that she may choose to reuse packaging depending on the type of material. “I might reuse a sturdy box, like a TV box, for storage or shipping purposes, although this isn’t something I do regularly. Items like plain paper bags are easy to reuse, but I avoid using those with logos. I typically don’t reuse phone boxes. As part of my recycling efforts, I often sell plastic bags and other boxes to a scrap dealer.”

The way ahead
The takeaways are these. Quick commerce has seen exponential growth in the past year. According to Statista, the Indian quick commerce market has generated USD 3,349-million in revenue this year. It is expected to display a CAGR of 27.42% (USD 8,828-million) by 2028.

One of the biggest hurdles in the path to sustainability is a robust recycling and waste management system. This means that waste cannot just be segregated in homes and end up together in landfills. This needs to change.

According to a report by Innovate UK, “India’s consumption of plastic is increasing due to population growth, urbanisation, and industrialisation. In 2025, new regulations will require consumer brands to use at least 30% recycled plastic content in their packaging.”

An opportunity here is Gen Z’s purchasing power. Earlier this year, the Boston Consulting Group said, “Already, Gen Zers are contributing to about 46% of consumer spending, amounting to a staggering USD 860-billion. In a decade’s time, every second rupee spent on consumer categories will come from a Gen Zer’s wallet.”

Something of note among the responses to this WhatPackaging? survey was how Gen Z preferred packaging that had minimal branding. Paper bags and cardboard boxes find more reusability with Gen Z when they have less design. One respondent said, “I usually discard packaging. Good paper bags stay with me, that depends on how much branding they have on. Glass bottles are almost always reserved by my mum.”

Of course, while Gen Z is shaping the trends now, Gen Alpha (born between 2010 and 2024) will be coming in strong in the next five years. According to Gen Alpha’s spending power will reach USD 5.5-trillion by 2029. There are two things to remember about Gen Alpha. 

One, they’re independent. Mintel’s report says, “They are growing up amid a parenting and mental health revolution, where their opinions are valued and their influence on household decisions is significant.” 

The second is that Gen Alpha is growing up in a more socially and environmentally conscious world than any generation before it. According to Mintel, this has manifested itself in the form of strong ethical consciousness, “They will be discerning consumers who prioritise food brands with genuine social and environmental values. As they mature, this awareness is likely to intensify.”

As the way forward is mapped, it is important to include Gen Alpha’s behaviour as consumers in considerations surrounding sustainability. 

Data Collection: Jiya Somaiya and Anhata Rooprai