Rising input costs and consumer spending will continue to push up plastic bag prices over the three years to 2017; however, rising environmental concerns will encourage the use of reusable bags, thus hurting demand for plastic bags
Los Angeles, CA (PRWEB) December 11, 2014
Plastic bags have a buyer power score of 3.9 out of 5, indicating generally favorable negotiating conditions for buyers. Over the three years to 2014, buyers have gained greater negotiation power due to high fragmentation and competition in the market. “Despite low barriers to entry into the plastic bag market, the wide variety of product offerings and the diverse buying needs make it difficult for individual companies to capture a large market share,” according to IBISWorld business research analyst Anna Son. The plastic bag market comprises a number of small- and medium-size firms, with only a few large players, such as Hilex Poly, Advance Polybag and Superbag. As suppliers aggressively compete in terms of product quality and price to win business, buyers face minimal risks in the quality and functionality of procured plastic bags. Moreover, the commoditized nature of plastic bags makes it easier for buyers to switch suppliers.
Alternatively, the rising prices of plastic bags due to growing demand and input costs have undermined buyer power. “As the economy slowly gained traction and disposable income rose, consumers began to spend more. The increase in consumer spending had a ripple effect on a number of downstream buying industries, facilitating demand for plastic bags,” Son says. Meanwhile, the rising prices of raw materials, such as plastic resin raised production costs, forcing suppliers to boost prices on plastic bags. Although fluctuations in raw material prices add to product price volatility, rising market competition and import penetration help keep prices in check.
The trends that have shaped the plastic bag market over the past three years will continue during the three years to 2017, further bolstering buyer power. During the period, buyers are expected to benefit from intensifying price competition as imports of plastic bags increase. At the same time, rising environmental concerns and regulations regarding the harmful impact of plastic bags will encourage the use of reusable fabric bags and paper bags. Although the rising popularity of substitutes is hurting demand for plastic bags, it boosts buyer negotiation power by compelling suppliers to offer more competitive prices to win and retain business. For more information, visit IBISWorld’s Plastic Bags procurement category market research report page.
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IBISWorld Procurement Report Key Topics
This report is intended to assist buyers of plastic bags. Plastic bags include plastic shopping bags and plastic merchandise pouches. Suppliers of plastic bags also provide various packaging solutions, including customized product designs and packaging advising services. Buyers purchase plastic bags for different storing, packaging and transporting purposes.
Recent Price Trend
Product Life Cycle
Total Cost of Ownership
Supply Chain & Vendors
Supply Chain Dynamics
Supply Chain Risk
Market Share Concentration
Buying Lead Time
Key RFP Elements
Buyer Power Factors
About IBISWorld Inc.
IBISWorld is one of the world's leading publishers of business intelligence, specializing in Industry research and Procurement research. Since 1971, IBISWorld has provided thoroughly researched, accurate and current business information. With an extensive online portfolio, valued for its depth and scope, IBISWorld’s procurement research reports equip clients with the insight necessary to make better purchasing decisions, faster. Headquartered in Los Angeles, IBISWorld Procurement serves a range of business, professional service and government organizations through more than 10 locations worldwide. For more information, visit http://www.ibisworld.com or call 1-800-330-3772.