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Infant Milk Formula - China - April 2016

Infant Milk Formula - China - April 2016

“Faced with upcoming tougher regulations and increasingly intense market competition, companies and brands need to find new approaches to communicate with consumers as well as drive sales. IMF (Infant Milk Formula) products which are easier to absorb and similar to breast milk are more likely to win in the China market. Besides, given that Chinese mums have limited knowledge about IMF ingredients, companies and brands need to invest more in market education.”

– Yujing Li, Senior Research Analyst

This report looks at the following areas:

Have IMF products been over-marketed in China?
How to promote organic IMF products to Chinese consumers?“Mimic breast milk” is a future trend for IMF products


OVERVIEW
What you need to know
Products/ themes covered in this Report
EXECUTIVE SUMMARY
The Market
Figure 1: Total China retail volume sales of infant milk formula, 2010-20
Figure 2: Total China retail value sales of infant milk formula, 2010-20
Companies and Brands
Figure 3: Value share of leading companies in infant milk formula market, 2013-15
The Consumer
Figure 4: Purchased brands, January 2016
Figure 5: Repertoire analysis of purchased brands, January 2016
Figure 6: Product preference, January 2016
Figure 7: Product switch, January 2016
Figure 8: Ingredient awareness, January 2016
Figure 9: Ingredient function, January 2016
Figure 10: Advantage of organic infant milk formula, January 2016
What we think
ISSUES & INSIGHTS
Have IMF products been over-marketed in China?
Figure 11: Selected product claims in the China IMF product launch, 2012-15
How to promote organic IMF products to Chinese consumers?
Figure 12: Organic infant milk formula launched by Plum, US, 2016
Figure 13: Organic infant milk formula launched by Modilac Bio, France, 2015
“Mimic breast milk” is a future trend for IMF products
Figure 14: Baby personal care product and infant milk formula which use “ingredients found in breast milk” as selling point,
Thailand and US, 2013-16
Figure 15: IMF product which emphasises OPO’s benefits on its packaging, China, 2015
THE MARKET
What you need to know
The value growth rate of IMF market keeps slowing down
The pending regulations may reshuffle the IMF industry
Market size and forecast
Market growth rate keeps slowing down
Figure 16: Total China retail market value of infant milk formula, 2010-15
Flat growth rate in the next five years
Figure 17: Total China retail volume sales of infant milk formula, 2010-20
Figure 18: Total China retail value sales of infant milk formula, 2010-20
Market factors
The relaxation of the one-child policy and urbanisation save IMF market
Online retailing offers more choices for mums living in low tier cities
Negative news of IMF products destroys consumers’ confidence
New import tax sets barrier for imported IMF products
The upcoming regulations will reshuffle the IMF industry
KEY PLAYERS
What you need to know
International companies still lead the market
More players enter super-premium segment
OPO ingredient is ready to take off
Market share
International companies still lead the market
Figure 19: Value share of leading companies in infant milk formula market, 2013-15
Competitive strategies
Danone stops selling IMF products under Karicare brand in China
More players tap into super-premium segment
Figure 20: Super-premium product introduced by Yashili and Arla, 2016
Who’s innovating?
OPO ingredient is rising
Figure 21: Newly launched infant milk formula with the OPO ingredient, China, 2011-15
Nestlé promotes its BabyNes machine in China
New technologies may bring a revolution for IMF industry
THE CONSUMER
What you need to know
34% of mums only buy one IMF brand
Mums like IMF products which are easier to absorb and similar to breast milk
Quality-related reasons are key drivers for consumers’ product switch behaviour
Consumers have limited knowledge about IMF ingredients
Health benefits and nutritional values are perceived as most attractive factors of organic IMF products
Purchased brands
International brands tend to attract more consumers
Figure 22: Purchased brands, January 2016
A third of mums only buy one IMF brand
Figure 23: Repertoire analysis of purchased brands, January 2016
Mums with higher income and education background are more likely to purchase different brands
Product preference
Mums show strong preference for products which are easier to absorb and similar to breast milk
Figure 24: Product preference, January 2016
International certifications win more trust
Appealing product features for high earners
Figure 25: Product preference, by household income, January 2016
Product switch
Quality-related reasons are top drivers for product switch behaviour
Figure 26: Product switch, January 2016
Word of mouth matters
Figure 27: Product switch, by repertoire of purchased brands, January 2016
Price has limited influence for consumers’ product switch behaviour
Leverage free tasting to enter growing up milk segment
Figure 28: Product switch, by age of youngest baby, January 2016
Ingredient awareness
Significant differences exist regarding ingredient knowledge
Figure 29: Ingredient awareness, January 2016
Older mums have better knowledge about ingredients
Figure 30: Mums who have not heard of selected ingredients, by age, January 2016
Mums’ knowledge changes with babies’ age
Figure 31: Mums who have heard of selected ingredients and know about their functions, by age of youngest baby, January 2016
Ingredient function
Chinese mums need more education about ingredient benefits
Figure 32: Ingredient function, January 2016
Figure 33: Newly launched infant milk formula with selected ingredients, China, 2011-15
Highlight ingredient benefits depending on mum’s actual needs
Figure 34: Ingredient function, by age of youngest baby, January 2016
Advantage of organic infant milk formula
Health benefits and nutritional values are perceived as the most attractive product advantages
Figure 35: Advantage of organic infant milk formula, January 2016
Organic claim gives safety assurance
High earners believe that organic products are more premium
APPENDIX
Market size and forecast
Figure 36: Retail value sales of infant milk formula, 2010-20
Figure 37: Retail volume sales of infant milk formula, 2010-20
Methodology and definitions
Methodology
Fan chart forecast
Abbreviations
RESEARCH METHODOLOGY
China Research Methodology
Confidence levels
Sample sizes by city
Sampling methodology and sampling structure
Our research partner - QQsurvey
QQ’s sampling and Quality control
Further Analysis
Appendix

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