Infant Milk Formula - China - May 2018

OVERVIEW
What you need to know
Products covered in this Report
Definitions
Figure 1: Mintel’s definition of different income groups, China
EXECUTIVE SUMMARY
The market
Volume sales may grow slowly due to lower than expected birth rate
Figure 2: Best-and worst-case value sales forecast of IMF market, China, 2012-22
More concentrated IMF market is normalising under regulation
Key players
A harvest year for domestic brands
Figure 3: Leading companies value share in IMF market, China, 2016-17
Premium products help take more market share
Leading players optimise product portfolio to enhance competitiveness
Online platforms help brands communicate with consumers effectively
The consumer
Specialised mother and baby care store remains the top choice
Figure 4: IMF purchase channels, China, Jan 2018
One third of surveyed consumers choose Mead Johnson
Figure 5: Brand(s) purchased in the past six months, China, Jan 2018
Experienced peer parents’ advice has dominating impact
Figure 6: Purchase influencers of IMF and baby supplementary food, China, 2017 and 2018
Friso enjoys high brand loyalty and appeals to potential brand-switchers
Figure 7: Premium IMF brands purchase intention, China, Jan 2018
Practical product features are the main switching triggers
Figure 8: Trigger of brand switch, China, Jan 2018
Nutrition, absorption and milk source are the top three premium features
Figure 9: Premiumisation opportunity, China, Jan 2018
What we think
ISSUES AND INSIGHTS
Opportunity of upgraded offerings on e-commerce platforms
The facts
The implications
Figure 10: Zhuo Chun NAN, China, 2018
Adjust nutrition content to avoid over-consuming
The facts
The implications
Figure 11: Average protein content in IMF, China, France, Germany, South Korea, USA and UK, 2013-17
Figure 12: IMF products claiming well-balanced nutrition, Australia, South Korea & Vietnam, 2017-18
Figure 13: IMF products claiming to adjust nutrition, Switzerland, France and South Korea, 2018
The positioning of liquid formula milk
The facts
The implications
Figure 14: Growing up milk in regular milk bottle, Germany, 2018
Figure 15: Liquid formula milk/soya milk implying usage occasions, China, 2018
Figure 16: Wyeth’s imported liquid formula milk for kids aged three to seven, China, 2018
THE MARKET – WHAT YOU NEED TO KNOW
Volume sales of the IMF category will grow slower than value sales
Specialised mother and baby care stores and online channels contribute a lot to sales
MARKET SIZE AND FORECAST
Volume sales grow slowly due to lower birth rate in 2017
Premiumisation will drive more market value growth
Figure 17: Best-and worst-case volume sales forecast of IMF market, China, 2012-22
Figure 18: Best-and worst-case value sales forecast of IMF market, China, 2012-22
MARKET FACTORS
Second child policy won’t promise the rise of the market for long
Major brands have passed registration, mostly local ones
Milk powder for pregnant/lactating women is catching the trend
Figure 19: Consumers who drank formula for pregnant women in the past five years, by tier, MHI and willingness of having more children, China, Jan 2018
The older generation has a say in raising new born babies
Figure 20: Living situation, by kids’ age, China, Jan 2018
KEY PLAYERS – WHAT YOU NEED TO KNOW
Nestlé is still the leading brand
Domestic brands are taking market share from foreign brands
MARKET SHARE
A harvest year for domestic brands
Figure 21: Leading companies’ value share in IMF market, China, 2016-17
Premium products help take more market share
COMPETITIVE STRATEGIES
Update current offering with new type of milk source
Figure 22: A2 IMF, China, 2016
Figure 23: Introduction of Illuma Atwo, China, 2018
Introduce brands that have been successful in other major markets
Figure 24: Introduction of SMA Preshia on its Tmall official online store, China, 2018
Figure 25: Nutramigen, USA, 2016
Immediate packaging updating after registration
Figure 26: New and old version of IMF packaging, China, 2018
Figure 27: Eleva on JD Mall and official website, China, 2018
WHO’S INNOVATING?
Less well-known ingredients become common ones
Figure 28: Select nutrients used in IMF, China, 2015-17
Figure 29: Products with linoleic acid, lutein and lactoferrin, China, 2018
New tech assisting quality assurance
Figure 30: Mead Johnson’s AR tracking function through QQ, China, 2018
Strengthen the bond with mums with the help of influencers
THE CONSUMER – WHAT YOU NEED TO KNOW
Specialised mother and baby care stores are still the most popular channel
Mead Johnson, Wyeth, Abbott and Beingmate are the most embraced
Experienced peer parents have undoubted major influence
Premium features lie more on the end benefits of IMF
PURCHASE CHANNEL
Specialised mother and baby care stores remain the top choice
Figure 31: IMF purchase channels, China, Jan 2018
Figure 32: Ranking of preferred IMF purchase channels, China, 2015 and 2018
Tier one consumers are moving away from traditional channels
Figure 33: Select IMF purchase channels, by tier, China, 2015 and 2018
Shanghai is leading in online channels
Figure 34: IMF purchase channels, by city, China, Jan 2018
Post 70s stick to traditional channels
Figure 35: IMF purchase channels, by generation, China, Jan 2018
BRAND PENETRATION
One third of surveyed consumers choose Mead Johnson
Figure 36: Brand(s) purchased in the past six months, China, Jan 2018
Figure 37: Ranking of IMF brand purchased in the past six months, China, 2017 & 2018
Top foreign brands gain more fans in Guangzhou and Shanghai
Figure 38: Brand(s) purchased in the past six months, by city, China, Jan 2018
Danone’s IMF brands rely much on certain channels
Figure 39: IMF purchase channels, by brand(s) purchased in the past six months, China, Jan 2018
PURCHASE INFLUENCER
Experienced peer parents’ advice has dominating impact
Figure 40: Purchase influencers of IMF and baby supplementary food, China, 2017 and 2018
Post-70s look for more efficient approach
Figure 41: The top two purchase influencers, by generation, China, Jan 2018
Correlation between information source and other factors
Purchase influencer vs purchase channel
Purchase influencer vs brand
Figure 42: IMF purchase influencer, by brand, China, Jan 2018
PREMIUM BRAND PURCHASE INTENTION
Friso enjoys high brand loyalty and appeals to potential brand-switchers
Figure 43: Premium IMF brands purchase intention, China, Jan 2018
Females’ loyalty of Illuma varies depending on their age
Figure 44: Premium IMF brands purchase intention, by gender and age, China, Jan 2018
Friso Prestige and Eleva appeal more to users of Stage 3 IMF
Figure 45: Premium IMF brands purchase intention, by baby’s age, China, Jan 2018
Most super-premium brands have similar performance across tiers
Figure 46: Premium IMF brands purchase intention, by city tier, China, Jan 2018
TRIGGER OF PRODUCT SWITCH
Practical product features are the main switching triggers
Figure 47: Trigger of brand switch, China, Jan 2018
Young parents are more likely to change their minds for external reasons
Figure 48: Trigger of brand switch, China, Jan 2018
Tier one consumers have diverse needs for product switching
Figure 49: Trigger of brand switch, China, Jan 2018
PREMIUM PRODUCT FACTORS
Nutrition, absorption and milk source are the top three premium features
Figure 50: Premiumisation opportunity, China, Jan 2018
Most premium features are more relevant to users of Stage 3 IMF
Figure 51: IMF purchase channels, China, Jan 2018
MEET THE MINTROPOLITANS
MinTs are more savvy online IMF buyers
Figure 52: IMF purchase channels, China, Jan 2018
Wyeth and Abbot have gained more fans among MinTs
Figure 53: Brand(s) purchased in the past six months, China, Jan 2018
Non-MinTs are slightly more loyal to most super-premium brands
Figure 54: Premium IMF brands purchase intention, by consumer classification, China, Jan 2018
APPENDIX – MARKET SIZE AND FORECAST
Figure 55: Total market volume of IMF, China, 2012-22
Figure 56: Total market value of IMF, China, 2012-22
APPENDIX – METHODOLOGY, DEFINITION, AND ABBREVIATIONS
Methodology
Fan chart forecast
Abbreviations