PALLET MARKET ANALYSIS

Market Challenges And Opportunities

Restraints:

High Cost of Wood and Risk of insects and fire:

Wood is the most common material used for manufacturing pallets. Market players prefer wood pallets, wood pallets are very easy to handle. However, wood pallets are more costly than plastic and metal pallets. Also wood has the risk of insect infections and risk of fire. According to the Fraunhofer Institute for Material Flow and Logistics IML wooden pallets are relatively heavy, the pallet can absorb water, cannot be easily cleaned, and requires maintenance, due to deformation, production of sawdust, and corrosion of screws, this will hamper the growth of the market. By reducing the high cost of wood and by recycling wood and by managing the risk of insects and fire can counter this factor of global pallet market.

Driver:

Increasing Number of Manufacturing Units and the Growing Housing and Construction

Increasing number of manufacturing units and the growing housing and construction sector are some major factors propelling the growth of the market. Moreover, the increasing import-export activities in the pharmaceuticals and food and beverage industry have fuelled demand for reliable and durable product storing materials, including pallets. Plastic pallets accounted for the fastest-growing material segment, as plastic pallets are preferred for the shipment of goods. This is owing to the materials' durability, lightweight, and low cost in terms of floor space and labor requirements. Moreover, various companies such as Amazon Inc. and Inditex S.A. are investing in R&D activities such as developing RFID(Radio Frequency Identification) tags for tracking pallets. Such R&D activities are expected to drive the growth of the global pallet market.

Rising Sales of Smartphone & E-commerce:

Increasing sales of smartphones, penetration of the internet, and e-commerce, the demand for logistic services increased this is strengthening the growth of the pallet market across the globe. According to India Brand Equity Foundation in 2022, in recent years India has experienced a boom in internet and smartphone penetration. The number of internet connections in 2021 increased significantly to 830 million, driven by the 'Digital India' program. Out of the total internet connections, 55% of connections were in urban areas, of which 97% of connections were wireless.