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Infant Milk Formula - China - May 2018

“As more and more brands have passed formula registration, the IMF market will see a more stabilised situation. Seeking new solutions to enhance competitiveness on online channels becomes crucial. When considering premium products, practical benefits such as nutrition are always the major criteria.”
- Cheryl Ni, Research Analyst, Food & Drink

This Report looks at the following areas:

  • Opportunity of upgraded offerings on e-commerce platforms
  • Adjust nutrition content to avoid over-consuming
  • The positioning of liquid formula milk

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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
            • Volume sales may grow slowly due to lower than expected birth rate
              • Figure 2: Best-and worst-case value sales forecast of IMF market, China, 2012-22
            • More concentrated IMF market is normalising under regulation
              • Key players
                • A harvest year for domestic brands
                  • Figure 3: Leading companies value share in IMF market, China, 2016-17
                • Premium products help take more market share
                  • Leading players optimise product portfolio to enhance competitiveness
                    • Online platforms help brands communicate with consumers effectively
                      • The consumer
                        • Specialised mother and baby care store remains the top choice
                          • Figure 4: IMF purchase channels, China, Jan 2018
                        • One third of surveyed consumers choose Mead Johnson
                          • Figure 5: Brand(s) purchased in the past six months, China, Jan 2018
                        • Experienced peer parents’ advice has dominating impact
                          • Figure 6: Purchase influencers of IMF and baby supplementary food, China, 2017 and 2018
                        • Friso enjoys high brand loyalty and appeals to potential brand-switchers
                          • Figure 7: Premium IMF brands purchase intention, China, Jan 2018
                        • Practical product features are the main switching triggers
                          • Figure 8: Trigger of brand switch, China, Jan 2018
                        • Nutrition, absorption and milk source are the top three premium features
                          • Figure 9: Premiumisation opportunity, China, Jan 2018
                        • What we think
                        • Issues and Insights

                          • Opportunity of upgraded offerings on e-commerce platforms
                            • The facts
                              • The implications
                                • Figure 10: Zhuo Chun NAN, China, 2018
                              • Adjust nutrition content to avoid over-consuming
                                • The facts
                                  • The implications
                                    • Figure 11: Average protein content in IMF, China, France, Germany, South Korea, USA and UK, 2013-17
                                    • Figure 12: IMF products claiming well-balanced nutrition, Australia, South Korea & Vietnam, 2017-18
                                    • Figure 13: IMF products claiming to adjust nutrition, Switzerland, France and South Korea, 2018
                                  • The positioning of liquid formula milk
                                    • The facts
                                      • The implications
                                        • Figure 14: Growing up milk in regular milk bottle, Germany, 2018
                                        • Figure 15: Liquid formula milk/soya milk implying usage occasions, China, 2018
                                        • Figure 16: Wyeth’s imported liquid formula milk for kids aged three to seven, China, 2018
                                    • The Market – What You Need to Know

                                      • Volume sales of the IMF category will grow slower than value sales
                                        • Specialised mother and baby care stores and online channels contribute a lot to sales
                                        • Market Size and Forecast

                                          • Volume sales grow slowly due to lower birth rate in 2017
                                            • Premiumisation will drive more market value growth
                                              • Figure 17: Best-and worst-case volume sales forecast of IMF market, China, 2012-22
                                              • Figure 18: Best-and worst-case value sales forecast of IMF market, China, 2012-22
                                          • Market Factors

                                            • Second child policy won’t promise the rise of the market for long
                                              • Major brands have passed registration, mostly local ones
                                                • Milk powder for pregnant/lactating women is catching the trend
                                                  • Figure 19: Consumers who drank formula for pregnant women in the past five years, by tier, MHI and willingness of having more children, China, Jan 2018
                                                • The older generation has a say in raising new born babies
                                                  • Figure 20: Living situation, by kids’ age, China, Jan 2018
                                              • Key Players – What You Need to Know

                                                • Nestlé is still the leading brand
                                                  • Domestic brands are taking market share from foreign brands
                                                  • Market Share

                                                    • A harvest year for domestic brands
                                                      • Figure 21: Leading companies’ value share in IMF market, China, 2016-17
                                                    • Premium products help take more market share
                                                    • Competitive Strategies

                                                      • Update current offering with new type of milk source
                                                        • Figure 22: A2 IMF, China, 2016
                                                        • Figure 23: Introduction of Illuma Atwo, China, 2018
                                                      • Introduce brands that have been successful in other major markets
                                                        • Figure 24: Introduction of SMA Preshia on its Tmall official online store, China, 2018
                                                        • Figure 25: Nutramigen, USA, 2016
                                                      • Immediate packaging updating after registration
                                                        • Figure 26: New and old version of IMF packaging, China, 2018
                                                        • Figure 27: Eleva on JD Mall and official website, China, 2018
                                                    • Who’s Innovating?

                                                      • Less well-known ingredients become common ones
                                                        • Figure 28: Select nutrients used in IMF, China, 2015-17
                                                        • Figure 29: Products with linoleic acid, lutein and lactoferrin, China, 2018
                                                      • New tech assisting quality assurance
                                                        • Figure 30: Mead Johnson’s AR tracking function through QQ, China, 2018
                                                      • Strengthen the bond with mums with the help of influencers
                                                      • The Consumer – What You Need to Know

                                                        • Specialised mother and baby care stores are still the most popular channel
                                                          • Mead Johnson, Wyeth, Abbott and Beingmate are the most embraced
                                                            • Experienced peer parents have undoubted major influence
                                                              • Premium features lie more on the end benefits of IMF
                                                              • Purchase Channel

                                                                • Specialised mother and baby care stores remain the top choice
                                                                  • Figure 31: IMF purchase channels, China, Jan 2018
                                                                  • Figure 32: Ranking of preferred IMF purchase channels, China, 2015 and 2018
                                                                • Tier one consumers are moving away from traditional channels
                                                                  • Figure 33: Select IMF purchase channels, by tier, China, 2015 and 2018
                                                                • Shanghai is leading in online channels
                                                                  • Figure 34: IMF purchase channels, by city, China, Jan 2018
                                                                • Post 70s stick to traditional channels
                                                                  • Figure 35: IMF purchase channels, by generation, China, Jan 2018
                                                              • Brand Penetration

                                                                • One third of surveyed consumers choose Mead Johnson
                                                                  • Figure 36: Brand(s) purchased in the past six months, China, Jan 2018
                                                                  • Figure 37: Ranking of IMF brand purchased in the past six months, China, 2017 & 2018
                                                                • Top foreign brands gain more fans in Guangzhou and Shanghai
                                                                  • Figure 38: Brand(s) purchased in the past six months, by city, China, Jan 2018
                                                                • Danone’s IMF brands rely much on certain channels
                                                                  • Figure 39: IMF purchase channels, by brand(s) purchased in the past six months, China, Jan 2018
                                                              • Purchase Influencer

                                                                • Experienced peer parents’ advice has dominating impact
                                                                  • Figure 40: Purchase influencers of IMF and baby supplementary food, China, 2017 and 2018
                                                                • Post-70s look for more efficient approach
                                                                  • Figure 41: The top two purchase influencers, by generation, China, Jan 2018
                                                                • Correlation between information source and other factors
                                                                  • Purchase influencer vs purchase channel
                                                                    • Purchase influencer vs brand
                                                                      • Figure 42: IMF purchase influencer, by brand, China, Jan 2018
                                                                  • Premium Brand Purchase Intention

                                                                    • Friso enjoys high brand loyalty and appeals to potential brand-switchers
                                                                      • Figure 43: Premium IMF brands purchase intention, China, Jan 2018
                                                                    • Females’ loyalty of Illuma varies depending on their age
                                                                      • Figure 44: Premium IMF brands purchase intention, by gender and age, China, Jan 2018
                                                                    • Friso Prestige and Eleva appeal more to users of Stage 3 IMF
                                                                      • Figure 45: Premium IMF brands purchase intention, by baby’s age, China, Jan 2018
                                                                    • Most super-premium brands have similar performance across tiers
                                                                      • Figure 46: Premium IMF brands purchase intention, by city tier, China, Jan 2018
                                                                  • Trigger of Product Switch

                                                                    • Practical product features are the main switching triggers
                                                                      • Figure 47: Trigger of brand switch, China, Jan 2018
                                                                    • Young parents are more likely to change their minds for external reasons
                                                                      • Figure 48: Trigger of brand switch, China, Jan 2018
                                                                    • Tier one consumers have diverse needs for product switching
                                                                      • Figure 49: Trigger of brand switch, China, Jan 2018
                                                                  • Premium Product Factors

                                                                    • Nutrition, absorption and milk source are the top three premium features
                                                                      • Figure 50: Premiumisation opportunity, China, Jan 2018
                                                                    • Most premium features are more relevant to users of Stage 3 IMF
                                                                      • Figure 51: IMF purchase channels, China, Jan 2018
                                                                  • Meet the Mintropolitans

                                                                    • MinTs are more savvy online IMF buyers
                                                                      • Figure 52: IMF purchase channels, China, Jan 2018
                                                                    • Wyeth and Abbot have gained more fans among MinTs
                                                                      • Figure 53: Brand(s) purchased in the past six months, China, Jan 2018
                                                                    • Non-MinTs are slightly more loyal to most super-premium brands
                                                                      • Figure 54: Premium IMF brands purchase intention, by consumer classification, China, Jan 2018
                                                                  • Appendix – Market Size and Forecast

                                                                      • Figure 55: Total market volume of IMF, China, 2012-22
                                                                      • Figure 56: Total market value of IMF, China, 2012-22
                                                                  • Appendix – Methodology, Definition, and Abbreviations

                                                                    • Methodology
                                                                      • Fan chart forecast
                                                                        • Abbreviations

                                                                        Infant Milk Formula - China - May 2018

                                                                        US $4,460.00 (Excl.Tax)