$17 billion for milk powder market in China !

Milk powder, a lucrative market

At that time, Beijing accounts for its milk power imports to $17 billion annually, equivalent to almost two thirds of the global market. China imports mainly from Germany, where the price of milk is significantly higher in the Chinese market than the European. Moreover, Euromonitor predicts that the market will double again in the next three years. Even on the retail sales, prices appear vulgarly inflated.

Ireland presents a new measure on breast milk

Ireland plans to establish a measure on infant formula and aims 50% growth in milk production by 2020, it is the most ambitious measures among those existing within the European Union. It is based on the seemingly unshakable assumption that Chinese demand for infant formula is supported by fundamental changes in Chinese society. The relaxation of the one-child policy, the scandal of melamine poisoning in 2008 and the increase affluent middle class pushed forward the rise of the demand for milk powder, which has increased tenfold in less than a decade.


The Kerry Group has recently launched a formula under the brand Green Love More from retailers for a strong price of 43 euros per kilo, which is four times more than Irish prices. However, running in parallel with these impressive statistics is a growing concern about the low rates of breastfeeding. Indeed, less than a third of babies are breastfed in China and the number is decreasing despite the fact that global health organizations recommend this practice for babies under six months.

More controls since the scandal of 2008

Before the age of 6 months, the breastfeeding rate is about 28%, slightly less than in the city, most in rural areas. Chinese law is respectful of maternity leave: four months off work are awarded to the young mother. It may take an hour a day on their working time for 6 months for breastfeeding upon return to the office, the girl often stops after 3 months. That explains the high demand for breast milk and this is why China is the world market of manufactured milk. Since the scandal of 2008, China has strengthened its health checks on dairy products. Indeed, obtain authorization to produce and market milk became highly controlled: a government agency audits today all manufacturers in China and abroad. No less than thirty seven points are checked throughout the process, the majority to verify the quality standards and according to precise formulas and validated by the Ministry of Health, almost more drastic that current European standard. In Shanghai, we can find some European brands like Danone.


The decision of Chinese’s government

In order to answer at this problem, the Chinese authorities have now taken into account the prohibition of advertisements for breast milk. The proposed measure provides for the prohibition of advertising in the mass media or in public places for dairy products, drinks or other food products that “claim to partly or fully as a substitute for breast milk.” Behind China’s growing appetite for the formula are some disturbing truths. Experts say that sales of the preparation of powdered milk are explained by a lack of access to maternity leave and because some people claim that the marketing of breast milk for preparation child is “unethical “through the maternal care system.

The Chinese government is now committed to increase exclusive breast milk rate to 50% in 2020. Nevertheless, experts say that even a tiny piece of powdered milk in the Chinese market will be enough to justify the measure proposed by the Ireland.

More space for the mass media, the digital master will rule the breast milk market in China. If Chinese simply cannot be reached by a traditional media campaign, the pre-existing phenomenon of hyper digitalisation of Chinese consumers here will strengthen. Indeed, the digital offers a wide variety of tool and place where consumers can learn … and be target at a digital marketing campaign.

Further readings

How to do B2B in China?


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