China Daily Global Edition (USA)
Consumer confidence grows in domestic formula
Infant formula and milk powder producer China Feihe International has seen sales of its highend infant milk formula products grow 200 percent in the first half of 2017 over the same period last year, an indicator that Chinese consumers have gradually recovered their confidence in domestic baby formula milk brands.
China Feihe has also seen total revenue growth of more than 45 percent in the same period, according to the company. Its total sales reached 6.8 million yuan ($980 million) in 2016.
The brand’s market surge, industry experts say, reflects a rising number of local consumers’ willingness to shift their purchasing from international baby products to domestic brands.
Wang Linjiao, a consultant of market research provider Euromonitor International, said at a news conference this month that Feihe has grown into the No 1 Asia brand.
Of the top 10 milk formula brands in China, Danone’s Nutricia takes up 10.6 percent market shares in 2017, followed by Nestle’s Illuma at 9.1 percent and Royal FrieslandCampina’s Friso at 7.4 percent. Feihe International’s Firmus ranks No 4 with a market share of 6.7 percent, according to Euromonitor International.
The sales of Yili’s highend baby and infant milk ProKido— imported from New Zealand — gained 24 percent growth in the first three quarters of this year compared to the same period of 2016. Yili’s brand ranks No 6 at 5.3 percent in the market.
Wang said Feihe’s branding message — “A baby formula designed to fit Chinese babies” — has contributed to the growth. Euromonitor’s data show that in 2016, the satisfaction level regarding domestic baby formula brands grew 12 percent compared to that of 2014.
Wang said the public’s focus on Chinese baby milk powder has shifted from concerns about food safety to product quality and price. In addition, the wide access to baby raising information and knowledge has enabled more Chinese parents to be aware of the science behind baby feeding.
“Chinese parents have cared more about the origin of the milk and the research and development capacity, or whether the formula fits the Chinese baby’s physical constitution and digestion systems,” she said.
The annual comprehensive growth rate of domestic milk powder brands in the past five years has reached 27 percent, 11 percentage point higher than their foreign peers.