China Milk Powder Industry Market Research and Investment Forecast Report, 2013-2017

China's milk powder industry has a bright prospect, and it's expected to maintain a high growth for a long period. According to consumer groups, baby formula takes up 60% of total amount of milk powder consumption. At present, there is 500,000 tons potential demand for baby formula per year in China. If calculate the total market volume based on a standard of 100 Yuan per kilogram, it will reach around 50 billion Yuan per year. The data showed that milk powder industry achieved sales revenue of 58.679 billion Yuan, up by 18.47% year-on-year.

China's milk powder industry has a bright prospect, and it's expected to maintain a high growth for a long period. According to consumer groups, baby formula takes up 60% of total amount of milk powder consumption. At present, there is 500,000 tons potential demand for baby formula per year in China. If calculate the total market volume based on a standard of 100 Yuan per kilogram, it will reach around 50 billion Yuan per year. The data showed that milk powder industry achieved sales revenue of 58.679 billion Yuan, up by 18.47% year-on-year.

After two booms of foreign bands milk powder price rising in 2011, many domestic dairy enterprises released news on rising prices of domestic brands milk powder in the year of 2012. It's reported that this price rising movement has been launched by domestic dairy enterprises since the late February. Many dairy enterprises has begun to implement new EXW price and they may have finished adjusting the supply price and retail price to distributors and terminal stores, with a price growth ranging from 3% to 10%. Analysts believe that on one hand, the price adjustment is partly due to the increased costs of raw materials, transport, labor resources, and marketing; on the other hand, price adjustment will contribute to ease capital pressure, and improve profit condition after foreign brands milk powder rise in price. Furthermore, it may have been a good marketing method.

From a view of competitive landscape, domestic high-end milk powder market has been mainly occupied by foreign brands milk powder. Since January 1, 2012, the import tariff of special formula milk powder has been reduced. For example, the import tariff of New Zealand milk powder has enjoyed zero tariff treatment. After the announcement of the tariff reduction policy, milk powder from New Zealand, Australia, Germany and etc. began to rush into Chinese market. According to incompletely statistics, imported milk powder of original brands increases by around 10% annually, namely, which is about 50 to 60 thousand tons. From the end of 2011 to February in 2012, there are more 20 foreign milk powder brands in Chinese market, while European brands takes up half percentages of them. With the involvement of foreign brands, great changes have taken place in competitive landscape of China's milk powder market.

The year sign of 2012 is dragon. In Chinese culture, dragon is a symbol of bringing success, luck and auspice, so dragon year can see a baby boom. Coupled with the rapid growth of marriage in 2011, it's predicted that newborn babies will increase by 10% year-on-year (the last population peak, namely, people born from the year of 1985 to 1987, up by 7% to 8%). With a growth of women of childbearing age, milk powder consumption is expected to accelerate, which will be more obvious in the year of dragon. It's predicted that the sales revenue of milk powder industry is expected to increase, up by 25% (volume and price will grow by 20% and 4% respectively).

Here, we would like to express our sincere gratitude to State Information Center, Bureau of Statistics of China, China Customs, International Information Research Institute, Chinese Academy of International Trade and Economic Cooperation, Tsinghua University Library, Development Research Center of the State Council and Beijing Essence Forward Research Center, for their great support when we conduct this report!

Notice: All the market data, especially corporations’ ranking data in the report, only for business reference. Please do not take the data for enterprise publicity. Thank you! Or Forward shall not take any responsibility for any consequences!

Qianzhan Business Information Co., Ltd. Industry Research Center
Research Team of Milk Powder Industry