The Baby Food Market in China 2017
Market for baby food rose by 23% between 2010 and 2016 to reach 396,000 tons, but fell for the first time in recent years in 2016. Although the market is still underdeveloped, it has benefited from greater consumer spending power, the rising levels of urbanization, and increased numbers of working women. At just 21.8kg - of which 18.7kg consisted of milks in 2016 -per capita consumption remains low by international standards. Sales reached CNY82.1 Billion (US$12.4 Billion) in 2016, 78% up on the 2010 level but slightly down on 2015.
Consumption increased in all sectors except drinks, although in value terms baby milks made the greatest gains, rising by 79% between 2010 and 2016. Sales have been boosted by the swing towards premium and super-premium products, as well as by rising per capita consumption up to 2015. Baby milks continue to dominate the market, accounting for over 92% of value and 86% of volume sales. Much of the remainder is made up of cereals & dry meals, which account for 4-5% of value and 7% of volume. Wet meals claim 2-3% of value sales, with finger foods and drinks together taking less than 1% of value sales.
The majority of milks are now imported, due to strong consumer preference for imported products, but most cereals, meals, and other products are produced locally. Imports of milks and cereals have risen strongly in recent years. In 2016, imports reached 225,000 tons, almost four times the 2010 level, and were valued at US$3.1 Billion. Imports of baby meals are much lower, reflecting the smaller size of the market. The Netherlands, Ireland, and New Zealand are the largest importers of infant formula. Exports remain low at present.
Distribution channels for baby food have changed dramatically over the past few years. The largest single channel for baby food is now specialist mother & baby stores (46%), while online sales account for a further 33%. Bricks & mortar food and general retailers now take only 21%. Online sales consist of C2C and B2C channels. The latter is now expanding more rapidly as all the major manufacturers have their own online stores, often selling directly imported products, while C2C sales are declining. Regulatory changes have accelerated this trend.
China has the world's second largest baby population and low per capita consumption, meaning, in theory, the untapped potential remains vast. Despite the one-child policy ending, the high cost of child-rearing and the lower number of women of childbearing age will restrain increases in births. On the other hand, once regulatory changes have concluded, sales should be boosted by the expansion of distribution and by rising incomes.
The report The Baby Food Market in China 2017 provides extensive and highly detailed current and future market trends in the Chinese market.
In particular, this report provides the following analysis -
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