Table of Contents
Introduction
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- Definition
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- Figure 1: Definition of low/mid/high MHI groups, by city tier
- Methodology
- Abbreviations
Executive Summary
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- The market
- Market size and forecast
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- Figure 2: Retail volume sales of milk and flavoured milk, China, 2009-19
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- Figure 3: Retail value sales of milk and flavoured milk, China, 2009-19
- Market segmentation
- Companies and brands
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- Figure 4: Value share of China’s milk and flavoured milk retail market, by company, 2013 and 2014
- The consumer
- How often do consumers drink milk?
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- Figure 5: Frequency of drinking milk, November 2014
- What types of milk are most popular?
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- Figure 6: Type of milk and flavoured milk drunk in the last three months, November 2014
- How much do consumers spend on buying milk?
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- Figure 7: Average monthly spending on milk, November 2014
- What types of packaging do consumers buy most often?
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- Figure 8: Type of milk packaging bought most often, November 2014
- What international milk brands are most popular?
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- Figure 9: International milk brands purchased in the last three months, November 2014
- Consumption and purchase behaviour of milk
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- Figure 10: Consumption behaviour of milk, November 2014
- Figure 11: Purchase behaviour of milk, November 2014
- Key issues
- How can international milk brands localise in China?
- How to enhance the natural and fresh perceptions to win consumers?
- A white space: liquid milk designed for teenagers
- What we think
Issues and Insights
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- How can international milk brands localise in China?
- The facts
- The implications
- How to enhance the natural and fresh perceptions to win consumers?
- The facts
- The implications
- A white space: Liquid milk designed for teenagers
- The facts
- The implications
Trend Application
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- Retired for Hire
- Play Ethic
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- Figure 12: Adult white milk with fun packaging, China, 2015
- Futures: Brand Intervention
Market Size and Forecast
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- Key points
- Milk market growth slowed down in 2014
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- Figure 13: Volume sales of China’s milk and flavoured milk market, by retail and non-retail, 2009-14
- Increasing milk usage on less common occasions takes a longer term to happen with changing lifestyles
- Non-retail sector grew faster than retail sector
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- Figure 14: Retail volume CAGR of selected categories that use milk as an ingredient, China, 2009-14
- Price hikes drive the milk retail market value
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- Figure 15: Retail value sales of China’s milk and flavoured milk market, 2009-14
- Figure 16: Average retail prices of liquid milk and milk powder, China, 2009-14
- Imported liquid milk grew explosively in the past four years
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- Figure 17: Volume of imported liquid milk, China, 2011-14
- Milk market still sees slower but robust growth in the next five years
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- Figure 18: Retail volume sales of milk and flavoured milk, China, 2009-19
- Figure 19: Retail value sales of milk and flavoured milk, China, 2009-19
- Forecast methodology
- Market drivers
- Ageing society brings opportunities to target the senior consumer group with premium variants
- More premium products flood in the market
- Growing affinity towards Western lifestyles presents opportunities to increase usage on less common consumption occasions
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- Figure 20: Total and retail volume consumption per capita of milk, China, Japan, UK and US, 2014
- Market barriers
- High retail price of milk poses a big barrier to increase consumption among low-income population
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- Figure 21: Average retailing price of milk, China, Japan, UK and US, 2014
- Consumer perception of milk as a drink for the elderly in Northern and Western regions also poses a market barrier
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- Figure 22: Proportion of consumers aged 20-49 and their senior family members who drink milk once a day or more, by region, November 2014
Market Segmentation
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- Key points
- Pasteurised milk’s growth accelerated while other segments slowed down
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- Figure 23: Retail volume sales of Chinese milk and flavoured milk market, by segment, 2011-14
- Flavoured liquid showed greatest tendency of premiumisation
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- Figure 24: Retail value sales and growth of Chinese milk and flavoured milk market, by segment, 2014
- White pasteurised milk will lead the volume growth in next five years
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- Figure 25: Retail volume sales of Chinese milk and flavoured milk market, by segment, 2014-19
Market Share
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- Key points
- Mengniu took over first place in 2014
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- Figure 26: Value and volume share of Chinese milk and flavoured milk retail market, by company, 2013 and 2014
- Bright benefits from strong growth in pasteurised milk
- The market has a long tail of small players
Who’s Innovating?
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- Key points
- The market lacks adult liquid milk with functional benefits
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- Figure 27: Share of white liquid milk NPD with functional claims, China, April 2012-March 2015
- Figure 28: Examples of liquid milk products with new functional claims, Ireland and Spain, 2014
- Banana and mango greatly increased their share in NPD flavours
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- Figure 29: Share of most popular flavours in flavoured liquid milk NPD, China, April 2012-March 2015
- New Hope Dairy launched UHT milk with only three-month shelf life
- Weichuan released series of adverts featuring Shanghai dialect to promote its fresh milk
- Bright’s UBEST launched a special spring season edition
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- Figure 30: Bright UBEST Special Spring Edition, China, 2015
- Inspirations from international market
- Coca-Cola entered US milk market with a new brand Fairlife
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- Figure 31: Coca-Cola’s Fairlife Milk Advert, US, 2014
Companies and Brands
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- Mengniu Dairy
- Latest development
- Yili Group
- Latest development
- Bright Dairy
- Latest development
- New Hope Group
- Latest development
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- Figure 32: Why not pure milk by New Hope Dairy, China, 2015
- Junlebao Dairy
- Latest development
- Meiji Dairy
The Consumer – How Often do Consumers Drink Milk?
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- Key points
- Drinking milk daily has been adopted by more young consumers in their twenties
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- Figure 33: Frequency of drinking milk, November 2014
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- Figure 34: Proportion of consumers who drink milk once a day or more, by demographics, 2013 and 2014
- Greater growth potential comes from encouraging usage in tier two and three cities
- Add more fun elements to encourage 20-24-year-olds to drink more milk
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- Figure 35: Frequency of drinking milk, by age, November 2014
- Innovate product mix to appeal to family buyers
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- Figure 36: Frequency of drinking milk, by family status, November 2014
- Regional difference analysis
- Renovate the elderly image of milk drinking to engage with those aged 20-49 in Northern and Western China
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- Figure 37: Proportion of consumers aged 20-49 and their senior family members who drink milk once a day or more, by region, November 2014
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- Figure 38: Example of milk life advert, US, 2014
- Daily milk drinking doesn’t appear higher among senior family members in Eastern and Southern China
The Consumer – What Types of Milk are Most Popular?
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- Key points
- Surprisingly, less wealthy twenties drink more premium milk
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- Figure 39: Type of milk and flavoured milk drunk in the last three months, November 2014
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- Figure 40: Usage rate of premium milk in the last three months, by age, November 2014
- Young consumers in their twenties are more keen on flavoured variants
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- Figure 41: Usage rate of selected milk types for self-consumption, by age, November 2014
- Milk designed for kids mainly competes with premium milk for the children segment
- Extend lactose-free milk’s appeal beyond elderly consumers
- Women aged 30-49 show higher loyalty towards milk types while half of consumers switch
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- Figure 42: Repertoire of types of milk and flavoured milk drunk in the last three months, by gender and age, November 2014
The Consumer – How Much do Consumers Spend on Buying Milk?
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- Key points
- Spending on milk doesn’t go up much once personal income reaches RMB4,000 threshold
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- Figure 43: Average monthly spending on milk, November 2014
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- Figure 44: Average monthly spending on milk, by monthly personal income, November 2014
- Consumers in Chengdu and Zhuhai tend to spend more on milk
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- Figure 45: Average monthly spending on milk, by region, November 2014
The Consumer – What Types of Packaging do Consumers Buy Most Often?
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- Key points
- Small-sized box with a straw prevails, responding well to consumers’ needs for freshness and convenience
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- Figure 46: Type of milk packaging bought most often, November 2014
- Medium-sized pack to target young male consumers in their twenties
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- Figure 47: Type of milk packaging bought most often, by gender and age, November 2014
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- Figure 48: Percentage of liquid milk purchased most often by consumers vs share of NPD in China, by pack size, 2014-15
- Consumers’ preference over pack size varies by city
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- Figure 49: Type of milk packaging bought most often, by city, November 2014
- Consumers in Northern China have a preference over pouch package
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- Figure 50: Type of milk packaging bought most often, by region, November 2014
The Consumer – What International Milk Brands are Most Popular?
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- Key points
- The majority have tried at least one international brand
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- Figure 51: International milk brands purchased in the last three months, November 2014
- Females and consumers aged 25-39 are more likely to buy from international brands
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- Figure 52: International milk brands purchased in the last three months, by gender and age, November 2014
- International brands need to launch more small-sized packs to engage with consumers, particularly 20-24-year-olds
- European and Japanese brands have greater potential to sustain higher price points
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- Figure 53: International milk brands purchased in the last three months, by monthly household income, November 2014
- International brands should talk more about themselves in marketing
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- Figure 54: Consumption and purchase behaviour of milk, by international brand buyer vs non-buyer, November 2014
The Consumer – Consumption and Purchase Behaviour of Milk
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- Key points
- Still a sizeable group of consumers prefer hot milk
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- Figure 55: Consumption behaviour of milk, November 2014
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- Figure 56: Example of milk with microwaveable packaging, China, 2012
- International food safety certification could work as good quality endorsement, particularly among males and parents
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- Figure 57: Purchase behaviour of milk, November 2014
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- Figure 58: Agreement with the statement “I am willing to pay more for milk products with international food safety certifications (eg BRC certification)”, by gender and presence of own children, November 2014
- Play around with nostalgia to appeal to consumers in their forties
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- Figure 59: Agreement with the statement “I prefer buying milk from regional brands rather than national/international brands”, by age, November 2014
- Online purchase rate is still low, but increased greatly from 2013
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- Figure 60: Proportion of consumers who have bought milk products online in the last three months, by city and tier, November 2014
Appendix – Market Size and Forecast
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- Figure 61: Volume sales of China’s milk and flavoured milk market, by retail and non-retail, 2009-19
- Figure 62: Retail volume sales of China’s milk and flavoured milk market, 2009-19
- Figure 63: Retail value sales of China’s milk and flavoured milk market, 2009-19
- Figure 64: Retail volume sales of China’s milk and flavoured milk market, by segment, 2009-19
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- Figure 65: Retail value sales of China’s milk and flavoured milk market, by segment, 2009-19
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