Infant Formula Industry Analysis
Chinese milk powder market has developed rapidly in recent years. This benefits not only from the development of China’s economy, but also from the inevitable result of people’s pursuit of a higher quality of life. Among the milk powder market, infant formula milk powder dominates the Chinese milk powder market. The market for infant formula in China consists of all kinds of brands. Not only does it have many domestic brands, it is also filled with a wide range of foreign products. Many young mothers are more likely to purchase foreign milk powder when they choose infant formula milk powder, which also indicates that foreign products have great potential in the Chinese market.
With the opening of the second-child policy, the number of new-born babies in China will increase to a large extent. In 2016, the number of newborn babies in China has reached 175.6 million, and this number will continue to increase. This means that the demand for infant formula in the future will remain at a very high level for a long period of time.
The chart below shows the proportion of infant formula milk powder of various brands in the Chinese market. It can be seen that domestic brands still have certain local advantages, but foreign milk brands (international brands and oversea brands can be listed as foreign brands) occupy a larger market as a whole.
In recent years, sales of infant formula milk powder in China have maintained a high level of consumption. Although there was a slight decline in 2015 and 2016, with the recovery of the Chinese economy and the opening of the second-child policy, the infant formula market started to show a good growth trend since 2017.
The chart below shows the sales ratio of imported milk powder and domestic milk powder in the infant formula milk powder online market in 2017. It can be clearly seen that the market share of imported infant formula milk powder is greater, and it is still increasing.
In the infant formula milk powder online market, Tianmao and Jingdong are the two giants, occupying the vast majority of the market.
In the imported infant formula milk powder online market, Tiianmao and Jingdong hold 53.2% and 34.1% of the market, respectively.
In the domestic infant formula milk powder online market, Tianmao and Jingdong hold 39.6% and 44.1% of the market, respectively.
There is also a big difference in the imports of infant formula milk powder in all provinces of China. The data from January to September of 2016 show that the import volume of Guangdong and Shanghai far exceeds that of other provinces, reaching 55,449 tons and 52,282 tons respectively.
The following graph shows that the Netherlands accounted for the largest share. Australia is ranked seventh, but from the proportions of 2015 and 2016, Australia is the fastest growing country with a growth rate of 43.6%.
The prospect for the infant formula milk powder market in China is bright, not only because of China’s economic development and parents willing to invest more on children’s growth, but also because the opening of the second-child policy has brought a lot of demand for infant formula milk powder. Imported milk powder has an advantage in quality, while as other conditions improve, there will be no disadvantage in terms of price. In a word, imported infant formula powder still has great potential to be explored in the Chinese market.