The Middle East’s Paper and Stationery Sector Looks Bright as Covid Worries Subdue
The Covid pandemic has wreaked havoc on businesses all over the world. The worldwide markets were severely impacted, transforming our lives, our economies, and the fortunes of our businesses forever.
The same could be said for the paper, stationery, and office supplies sector. The extraordinary closure of offices and educational institutions exacerbated the impact of covid on stationery and office goods sectors and working from home became the new normal.
Given that some nations are still dealing with the pandemic, the impact can be estimated by looking at the industry’s size and sales in past years. Markets, in general, were primarily damaged due to cross-border supply chain disruptions, changes in industry and country risk factors, and excessive volatility in the capital markets.
Now that pandemic worries have faded and covid-induced restrictions have been lifted, markets are looking forward to a bright future, with the entire world edging back to normalcy.
Stationery and office supply market revenues in the Middle East for the commercial and educational sectors are expected to reach US$6.26 billion in 2022, up 3.3 percent from US$6.06 billion in 2021, according to management consulting firm 6Wresearch.
Impact of the pandemic on office and stationery supplies market
The UAE has a 27.2 percent stake in the total stationery and office products market in the Middle East, while Saudi Arabia has a 19.7 percent share. The strong market position is fuelled by a number of causes, including an expanding education sector, rising disposable income, a growing youth population, and better economic conditions.
The spread of the Covid-19 pandemic and the lockdown that followed has undoubtedly resulted in the slowdown of the overall economy leading to a decline in demand for stationery in the commercial sector during 2020.
Notably, the education sector contributes the most to the office and stationery market in the region. The UAE, over the years, has been witnessing a steady growth in the education sector fuelled by an increasing trend in student enrolments.
For instance, the total enrolment in the UAE education sector in the year 2017-2018 was 3,11,105 whereas in 2018-2019 it grew by 2.4 % to reach 3,18,582. In 2019-2020 the student intake hit a record 324,593 (1.89% growth) giving a better chance for the paper, stationery, and office supplies to prosper further.
However, the industry received a tremendous blow, with education institutions remaining closed for a month and offices largely switching to WFM mode, leaving the important firms floundering. The education sector accounts for 60.8 percent of the total office and stationery market, while commercial offices account for 34.0 percent. Other sectors contribute only 5.2 percent of the total.
What lies ahead for the industry
From US$218.8 billion in 2020, the worldwide office supplies market is predicted to reach US$254.9 billion by the end of 2026. According to a report by fastmr.com, factors such as the expanding e-commerce marketplace for office supplies, increased sales of the computer and printer segment, and an increase in the number of corporate offices are expected to boost the global office supplies market’s growth. Over the period 2021-2026, the global office supplies market is predicted to grow at a Compound Annual Growth Rate (CAGR) of 3.10 percent.
Meanwhile, in the Middle East, according to 6wresearch, the education sector will account for 61 percent of stationery revenues (US$3.8 billion) in 2022, while the two Gulf nations of the UAE (US$1.7 billion) and Saudi Arabia (US$1.2 billion) will account for nearly half of the Middle East stationery and office supplies market for both education and commercial offices that year.
The fact that governments in the Middle Eastern region are investing in the expansion of the non-oil sector has led to various multinational companies setting up offices in the region, which will further propel the demand for office supplies over the next five years, is also driving the projected growth of the office and stationery supplies industry.