Plant-based milk market in China
In China, the plant-based market is growing fast, especially the plant-based milk sector. It is expected that it will increase to 258.3 billion yuan in 2020, accounting for 24.2% of the total market size of the beverage sector in China.
In China 82% of consumers who had consumed plant-based food, had also tried plant-based milk made of soy, rice, almond, oat or other dairy alternatives.
Soy milk was the best-selling product in China, according to Euromonitor data, the annual compound sales growth of soy milk products in the Chinese market was 9.3% from 2014 to 2018.
However, in recent years there has been a growing awareness and adoption of plant-based milks among consumers in China. Besides soybeans milk, there has been a growing demand for almond milk, peanut milk, coconut milk and walnut milk.
Therefore, it means great opportunities for brands as diversified needs lead to diversified products.
What are the best selling products in the plant-based milk market in China?
The plant-based milk market in China is dominated by four big categories:
- walnut milk
- almond milk
- coconut milk
- soybean milk
Is soy milk still the plant-based milk preferred to other plant-based milk?
Soy milk remains the market leader by a huge margin because soy products, such us tofu, have traditionally been considered as major part of the Chines diet. Within plant-based milk, in fact, soy drinks have traditionally been the most popular in China due to:
- the long-standing tradition of soy consumption
- its wide availability
- health benefits and high nutritional value
Nevertheless, while soy drinks dominate plant-based milk due to its more established presence, demand for other plant-based alternatives such as coconut, walnut and almond have increased, offering increasing competition to soy milk products.
In recent years, almond milk has been increasingly popular with perceived health benefits such as:
- reducing the rate of heart disease
- fewer calories compared to soybean milk
- being high in vitamin D
Walnut milk is also perceived to contain more nutrients and the growing interest in walnut-based milks can be seen in China, where Yangyuan, a Chinese company, successfully obtained almost USD 630 million funding for its walnut milk product.
Why are plant-based milks so interesting for Chinese consumers?
Chinese people are genetically predisposed to lactase-deficiency, in fact, around 85% of people suffer from lactose intolerance in China, in particular older generations.
In addition, Chinese consumers are increasingly associating healthier products with high quality. More and more consumers are shifting towards a healthier lifestyle, adopting veganism to appeal to their ethical beliefs, they are becoming knowledgeable about the beverages’ health benefits.
Consumers are still mainly concentrated in first-tier cities like Shanghai, Beijing, Guangzhou and Shenzhen, however the market is growing fast and it will reach second and third-tier cities very soon.
Who are the major players in the plant-based milk market in China? And what are their strategies?
The major players in the plant-base milk market in China are six, and they are all Chinese:
- Yang yuan (walnut milk)
- Coconut palm
- Vitasoy (soy milk)
- Yinli (peanut milk)
- Dali foods (soy milk)
- Lulu (almond milk)
Even if they are all Chinese, it doesn’t mean that there are not opportunity for foreign brands. On the contrary, there are a lot of them, however foreign brands should focus their marketing strategies on localization and branding to succeed in the Chinese market.
How are these companies leading the Chinese plant-based milk market?
Since the huge demand for these products, more and more companies are setting up production lines for plant-based milk in China.
For example, significant investments were made in the plant-based milk market in China. The major investor appeared to be:
- Coca Cola China which invested 400 million U.S. dollars in the company Xiamen Culianwang Beverage Technology
- The company Mengniu Diary Co which invested 7.5 million U.S. dollars in the plant-based food and beverage industry.
- The Swedish oat milk brand Oatly which has recently opened an office in Shanghai and deployed a new Chinese character for “vegan milk”
- The food brand Huiyuan and Dali Foods which have invested in this category, recognizing the potential growth of plant-based beverages.
Most of major food brands in China now have a plant-based beverage strategy. Some brands like, Want Want China and Yangyuan, with its walnut beverage brand, used internal R&D to launch new brands, while others pursued partnership with emerging companies.
Two years ago Want Want China company, one of China’s largest processed foods companies, which is known for its dairy products such as a top-selling children’s milk drink, has expanded into the lucrative niche market for soy and other plant-based milk products as Chinese families spend more for healthy options.
What strategies should brands adopt to succeed in the plant-based milk market in China?
Despite the market is dominated by local brands, there are wide opportunities for brands, but they should work on Branding, thus allowing Chinese consumers to recognize the brand and induce them to buy it.
It is important to spread consumer knowledge and awareness through active marketing efforts, educating consumers on the benefits of your plant-based milk, thus showing reliability. How to do this?
You should know that in China, consumers spend a lot of time online, especially on social media, to find potential brands and products that fit their need. However, in China western digital platforms are banned, therefore, brands should make their marketing efforts on Chinese channels.
In addition, Chinese consumer mostly rely on recommendations from previously consumers or from people they trust, therefore it is essential for brands, to be present on forums and Q&A platforms where people can discuss about products benefits.
Baidu SEO strategy to rank you first on the Chinese search engine
What is the first thing you do to find company or products information? It is going on google, What about China?
Google is banned in China, however there is a solution, namely Baidu. Baidu is the main search engine for finding information in China, so the brand that wants to be recognizable among Chinese consumers should open an account on Baidu.
In addition, if you want to break into the Chinese market, Baidu SEO is a must step and a must-have. However, Baidu is really different from Google, if you want to know more, you can contact our agency GMA.
To be visible on Baidu a brand in this sector should know that Baidu knows only Mandarin and gives priorities to websites hosted in China.
For example, as you can see here, Vitasoy has a Baidu account and created a Chinese website.
Social media is where Chinese people go to find plant-based milk brands and products that fit their needs
Chinese people spend a lot of time on social media doing many things like, chat with friends, create videos, buy products and others, however what is important for brands is that Chinese people go on these channels also to:
- obtain information about products and brands
- obtain suggestions from other people,
- learn how to use a product
- discuss their opinions and experience
As they spend time on these platforms, it means that these are the best places where to put your marketing efforts, therefore brands should open an account and then interact with Chinese consumers posting advertising, articles, news, images and so on. Of course, you should localize your content and understand Chinese consumers behavior and culture before to do your marketing campaign on these platforms.
On these channels brands can:
- interact with users
- teach how to use products
- show what are the benefits of products
- show brand’s value and products
- increase brand awareness
- increase brand loyalty
- see what Chinese people like and don’t like
- see what are consumers needs and how to solve them
- sell products thanks to payment systems and links to e-commerce platforms
The most used social media in the Chinese digital world for plant-based milk are Wechat and Weibo. These platforms are increasingly important for Chinese people, but also for companies that want increase brand awareness among Chinese consumers.
For example, Vitasoy has a Weibo and Wechat accounts and this is an example of its marketing campaign for the Chinese market. On Weibo you can see a marketing campaign related to the Chinese boat festival, while on Wechat it is teaching about product ingredients.
Forums are the best places to find advice for plant-based milk products
Zhihu is an amazing channel for Chinese people that want to find recommendations for products from other people and, at the same time is important for brands to explain product benefits.
Zhihu with its monthly active users of 34 million, is the Chinese question-and-answer site like Quora. On Zhihu, questions are created, answered, edited and organized by its users. In Classical Chinese, “Zhihu” means “Do you know.”
On Zhihu platform companies can:
- Q&A Campaigns (Answering questions, brands can establish a relationship with users and build their reputation this way. It allows them to promote themselves and introduce their products)
- KOL Endorsements to enhance a brand’s image and reputation (brands can invite experts or key opinion leaders to answer questions for them. Answering questions on Zhihu allows them to showcase their expertise and connect with both industry experts and general users)
- Zhihu Live (it allows brands to conduct online presentations on specific topics. Brands can have opportunities to provide in-depth knowledge and communicate with users in a more direct way)
- In-Depth Articles (Brands can publish long-form content to gain credibility in their industry which is highly valued by people in that industry)
For example, in the image below you can see how Vitasoy is using Zhihu account to explain benefits of its plant-based milk products.
How can brands in the plant-based milk sector reach Chinese consumers and sell their products?
E-commerce platforms have become the main purchase media for Chinese consumers, even in the plant-based milk sector. Of course, as we said before about social media, when we talk about e-commerce platforms to sell your products in China, we mean Chinese e-commerce platforms because they only buy on these platforms. Where do Chinese consumers go to buy plant-base milk products?
The most suitable e-commerce platforms for plant-base milk products are Tmall, Taobao, JD and Pinduoduo. However, it is not so easy to create an online store on these platforms, therefore brands can find distributors or contact us as we can help you with all managing tasks.
In addition, cross border e commerce platforms are also a good way to sell your plant-base milk products in the Chinese market, without having a physical presence in China.
The most suitable cross border e commerce platforms for plant-base milk products are Tmall global, JD worldwide and Kaola.
Do you want to know more about How to use Chinese channels to boost sales? Contact GMA a digital marketing agency, specialized in Chinese digital market.