In General Administration of Quality Supervision, Inspection and Quarantine official data, China is already the world’s largest importer of dairy products and is a huge and booming market for baby formula. This is not an unexpected situation due to one-child policy law was canceled in 2015, it occurs a baby boom in China again.
- The reason is obvious, by 2040 statistics show that 24% of the Chinese population will be 65 and older, which means by this year the big percentage of people will be disabled to work and a huge recourse should be spent on taking care of senior people by this date because young people will be not enough to do it.
- Most of the young parents are very picky about choosing baby formula due to a series of scandals about food safety incidents in 2008.
- Chinese companies added melamine ingredients to infant formula to give an appearance of higher protein content when added to milk. This scandal causes around 300000 victims and damaged the reputation of infant formula factories.
- A total of 22 companies were involved in the tainted milk scandal, including state-owned dairy company Yili, a supplier to the Beijing Olympics.
- The attempt to hide this incident from foreign journalists was failed by spreading news through foreign media resources and attracting global attention to this problem.
- The same situation occurs a few years ago in Shanghai, Shanghai authorities arrested a group of people involved in producing American infant formula brand Similac fake products with counterfeit labels.
This scandal destroyed the reputation of even the big local baby formula brands. Otherwise, it gave a big opportunity for a foreign brand to enter the Chinese market easily. But being imported is not enough for getting trust from Chinese parents discovering infant food by searching on the internet. Brands need to identify the right way to communicate with mums, probe into their needs in real life, and provide them with solid proof of the product advantages.
FOCUS ON CHINESE PARENTS
When Chinese parents select baby food products, they tend to learn more information through sources such as
- search engines (60%),
- store visits (50%),
- social media (46%),
- professional websites (43%)
- and discussion forums (42%).
BE VISIBLE IN BAIDU
It is not a secret, Google and other internet resources popular in the west are blocked in China, instead Google, Chinese people use the Baidu searching engine covering 68,5% of the searching market.
Developing a Chinese website on Chinese hosting and only in the Chinese language gives the opportunity to be found by potential consumers by surfing through the internet. One of the reasons why foreign sites not hosted in China have difficulty ranking on Baidu is that connections and speeds to overseas servers from Mainland China can be very unreliable due to the China Firewall.
EDUCATE YOUR CUSTOMERS
Increasing the expenses for baby formula, mums are looking for the most cost-effective products. The brand should focus on giving more details about ingredients, their value, and effectiveness to help to engage Chinese mums and provide them with the best option. By explaining the ingredients’ value and milk sourcing builds a strong reputation among Chinese consumers and makes them believe the brand is honest and doesn’t hide any information from young parents.
USE KOL FOR E-REPUTATION
Weakened trust in brands gives a huge opportunity for KOL(*) to be an effective tool to build a positive image of your brands. Chinese people spend a large amount of time using their mobiles phone following the big stars and influencers in social media. KOLs become more powerful and popular in China, target the right audience by choosing the right KOL writing about children on their social media. Kill two birds with one stone: enhance the brand trust and target the right audience.
REPUTATION IS MORE IMPORTANT THAN PRICE
After the “one-child policy law” was cancelled, estimates show that in the next five years, around 2-3 million more babies will be born each year, which will drive new demand for milk powder. Born even one baby in China is a huge expense: clothes, food, and other baby products, all this expense makes people deeply consider while they are planning the second baby. The growth of the Chinese economy causes not only expenses but income either.
Tier 1 cities like Shanghai, Beijing, Guangzhou, Shenzhen, etc. are blooming under “economic miracle”, citizen’s capacity of buying expensive goods are growing in parallel. For Chinese consumers choosing infant, formula price is not so important as quality. Chinese brands are more popular among mums who have two or more children (44% compared to 33% overall) and the penetration of foreign brands climbs to 70% among those who do not plan to have a second child. Focus on the Tier 1 cities where people usually have one child, the level of income is higher, the number of educated people is bigger as well, young parents pay more attention to safety than the price.
Price analysis demonstrates the infant food market in China is both a lucrative and stable industry to be in. Gross margin for foreign brands selling on the Mainland is 60 to 70 percent, according to separate research by CMRG and Mintel. On the contrary, local brands earn less than a 30 percent gross margin.
CREATE A COMMUNITY OF MOTHERS AROUND YOUR BRAND
Use the opportunity to make a community around your brand by social media platforms as Wechat and Weibo and stay in touch with your audience. According to the statista.com website, the average online time of internet users in China per week is around 27,6 hours, which is about 4 hours per day. Most of the time they spend scrolling social media as Wechat (the most popular Chinese messenger) or Weibo (Chinese alternative to Twitter). Big infant food brands use this opportunity by offering advice on pregnant/lactating women’s diet, recipe, and exercise in social media, engage consumers by launching contests/special offers as well.
Mother’s Day Campaign
Due to Mother’s Day Aptamil launched the promotion, every user who logged in as a member thought WeChat mini-program had a chance to win free products or get a discount coupon in Walmart, buying the products on March 8 users had a chance to win some women accessorizes after the purchase made.
Choosing a good partner is a very important first step. Different mentality and language barrier may become a problem to build the right strategy for China. The right marketing strategy will help you not to spend a lot of money and generate results.
WHAT IS THE RIGHT SOLUTION?
Find a Good partner, like GMA.
4 good reasons to contact us TODAY
- GMA is a team of an international Chinese team that can understand clients’ needs and adapt them to the Chinese market.
- We have an advanced strategy to market infant formula in China.
- We are ROI oriented agency with more than 7-year experience in Chinese marketing
- We will help you to enter the Chinese market by building an effective plan considering the client’s product’s unique features.
- We will help to develop and implement the best solution for your brand in China
After working with 600 Brands within 6years, we got a lot of experiences. (We can send you our Case studies if you ask)