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Infant Milk Formula - China - March 2019

Covered in this report

For the purposes of this report, Mintel has used the following definitions:

IMF comprises packaged dry and liquid products designed specifically for babies/infants. The market includes both baby formula (designed for babies up to one-year-old) and growing-up milks (designed for babies/infants aged 1-7).

“In the post registration era, leading players are gaining bigger market share with unqualified players being squeezed out. Big SKU strategies have also helped established brands strengthen winning positions by concentrating resources on research and marketing.
Although a declining birth rate sounds alarm bells for IMF demand, willingness to trade up to more premium products is strong, especially when parents are keen on selecting IMF that best fits their babies’ physical condition and are still demanding a longer list of fortified nutrition. Premium sectors like organic, goat as well as special formula are expected to witness promising growth. ”

- Cici Wu, Senior Research Analyst

This report will look at the following areas:

  • Strategy pivot in response to decreasing birth rate
  • Special formula serving rising number of babies diagnosed with allergies
  • Solid control of upstream resources can help win the premium sectors



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Table of contents

  1. Overview

    • What you need to know
      • Products covered in this report
        • Definitions
          • Figure 1: Mintel’s definition of different income groups, China
      • Executive Summary

          • The market
            • Value growth slowing down amid shrinking demand
              • Figure 2: Best-and worst-case volume sales forecast of IMF market, China, 2013-23
              • Figure 3: Best-and worst-case value sales forecast of IMF market, China, 2013-23
            • Build technology strength to cope with ingredient shortage
              • Lucrative yet challenging market for international players
                • Companies and brands
                  • Leading brands gaining bigger share
                    • Expanded categories and distribution to grow business
                      • Innovation centres around additional health benefits
                        • The consumer
                          • Brand preference exists in different regions and generations
                            • Figure 4: Infant milk formula brand bought, December 2018
                          • Demand for more fortified nutrition
                            • Figure 5: Attitudes towards fortified nutrition, December 2018
                          • Finding the best fit is of top priority
                            • Figure 6: Purchase factors ranking, December 2018
                          • Premium and special formula IMF receive high interest
                            • Figure 7: Usage and interest in specific infant milk formula, December 2018
                          • Experience and authority win more trust
                            • Figure 8: Most trustworthy information source, December 2018
                          • Parents have yet to realize benefits of breast feeding
                            • Figure 9: Attitudes towards breastfeeding, December 2018
                          • What we think
                          • Issues and Insights

                            • Strategy pivot in response to decreasing birth rate
                              • The facts
                                • The implications
                                  • Figure 10: NPD of infant milk formula in China, by sub-category, 2016-18
                                  • Figure 11: Mengniu’s Doraler goat infant milk powder for bigger babies and young children
                                • Special formula serving rising number of babies diagnosed with allergies
                                  • The facts
                                    • The implications
                                        • Figure 12: Enfamil Nutramigen ready-to-use hypoallergenic infant formula, USA
                                      • Solid control of upstream resources can help win the premium sectors
                                        • The facts
                                          • The implications
                                          • The Market – What You Need to Know

                                            • Stagnant value growth despite shrinking volume demand
                                              • Control over ingredient helps increase competitiveness
                                                • Market regulation brings pros and cons
                                                • Market Size and Forecast

                                                  • Plummeting birth rate further brings down volume demand
                                                    • Figure 13: Best-and worst-case volume sales forecast of IMF market, China, 2013-23
                                                  • Market value expected to remain stable
                                                    • Figure 14: Best-and worst-case value sales forecast of IMF market, China, 2013-23
                                                • Market Factors

                                                  • Fewer newborns to be fed
                                                    • Ingredient shortages highlight need for manufacturing upgrade
                                                      • IMF market continues to face strict regulations
                                                        • Changing market dynamic for IMF imports
                                                        • Key Players – What You Need to Know

                                                          • Game of big players
                                                            • Competitiveness through expansion or concentration
                                                              • Rising claims on digestive and eye health
                                                              • Market Share

                                                                • More centralised market
                                                                  • Figure 15: Leading companies’ value share in IMF market, China, 2017-18
                                                                • Leading players win with big sale items
                                                                  • Brands perform well on ecommerce platforms
                                                                    • Figure 16: Top 10 IMF brands on domestic ecommerce platforms* (based on value sales), China, 2018
                                                                    • Figure 17: Top 10 IMF brands on cross-border ecommerce platforms* (based on value sales), China, 2018
                                                                • Competitive Strategies

                                                                  • Branching out to other categories
                                                                    • 100% goat becomes selling point
                                                                      • Figure 18: Goat IMF products claiming to use goat whey only
                                                                    • Distribution channel focusing on expansion
                                                                    • Who’s Innovating?

                                                                      • Additional benefits and fortified nutrition as highlighted claims
                                                                        • Figure 19: Select claims of IMF products, China, 2016-18
                                                                        • Figure 20: New IMF products with fortified nutrition or additional benefits, global, 2019
                                                                        • Figure 21: Junlebao’s Lebo K2 growing-up milk formula for children
                                                                      • Product innovation to watch
                                                                        • Figure 22: Banner Dairy IMF stage 1 with milking date shown at can bottom
                                                                        • Figure 23: Wyeth illuma’s HA partially hydrolysed whey formula
                                                                        • Figure 24: Treasure of Plateau yak milk infant formula, China
                                                                    • The Consumer – What You Need to Know

                                                                      • High interest in more fortified nutrition
                                                                        • Quality and suitability high priorities
                                                                          • Yearning for special formula and premium sectors
                                                                          • Brand Purchased

                                                                            • International brands enjoy competitive edge in South and East regions
                                                                              • Figure 25: Infant milk formula brand bought, December 2018
                                                                              • Figure 26: Infant milk formula brand bought, by region, December 2018
                                                                            • Domestic brands are winning younger parents
                                                                              • Figure 27: Infant milk formula brand bought, by age, December 2018
                                                                            • Danone gains the most loyalty
                                                                              • Figure 28: Number of brands consumed by users of different brands, December 2018
                                                                              • Figure 29: Tips on changing IMF brands
                                                                          • Attitudes towards Fortified Nutrition

                                                                            • Longer list of fortified nutrition is preferred
                                                                              • Figure 30: Attitudes towards fortified nutrition, December 2018
                                                                            • More education and income further drives demand
                                                                              • Figure 31: Percentage with “the more, the better” attitude, by education, December 2018
                                                                            • HMO and casein have potential to prevail
                                                                            • Purchase Factors Ranking

                                                                              • Calling for more targeted formula
                                                                                • Figure 32: Purchase factors ranking, December 2018
                                                                              • Post-1980s still obsessed with milk source
                                                                                • Figure 33: First priority of choosing infant milk formula, by generation, December 2018
                                                                            • Interest in Specific Infant Milk Formula

                                                                              • Premium IMF highly coveted
                                                                                • Figure 34: Usage and interest in specific infant milk formula, December 2018
                                                                              • Opportunity in formula transition to win over special-formula buyers
                                                                                • Figure 35: Number of brands consumed, by users of special formula, December 2018
                                                                              • Education on special formula required for older parents and lower tier markets
                                                                                • Figure 36: Percentage of unaware of certain special formula, by age, December 2018
                                                                                • Figure 37: Percentage of consumers having bought or interested in buying certain special formula, by city tier, December 2018
                                                                            • Most Trustworthy Information Source

                                                                              • Value experience and authority
                                                                                • Figure 38: Most trustworthy information source, December 2018
                                                                                • Figure 39: Most trustworthy information source, by household income, December 2018
                                                                              • Polarised opinions on celebrity endorsements
                                                                              • Attitudes towards Infant Milk Formula

                                                                                • Breast feeding undervalued
                                                                                  • Figure 40: Attitudes towards breastfeeding, December 2018
                                                                                • Local versions and official sales channels gain popularity
                                                                                  • Figure 41: Attitudes towards imported infant milk formula, December 2018
                                                                                  • Figure 42: Attitudes towards channels, by attitudes towards imported IMF, December 2018
                                                                              • Meet the Mintropolitans

                                                                                • Not necessarily pioneers of latest baby feeding concepts
                                                                                  • More interested in special formula, liquid and capsule IMF
                                                                                    • Figure 43: Percentage of haven't bought but have interest to buy, by consumer classification, December 2018
                                                                                  • Authority earns more credit
                                                                                    • Figure 44: Most trustworthy information source, by consumer classification, December 2018
                                                                                • Appendix – Market Size and Forecast

                                                                                    • Figure 45: Total market volume of IMF, China, 2013-23
                                                                                    • Figure 46: Total market value of IMF, China, 2013-23
                                                                                • Appendix – Methodology and Abbreviations

                                                                                  • Methodology
                                                                                    • Fan chart forecast
                                                                                      • Abbreviations

                                                                                      Infant Milk Formula - China - March 2019

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