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Fierce Price War, Shifting Product Layout in the Dairy Market

2018-08-21 15:26 Tuesday


Price War

The Chinese milk market has seen a flurry of activity in recent weeks, as major brands have launched discount promotions in Jiangsu, Beijing, Shandong and other regions. Some dairy industry experts attribute the fierce price competition to lower sales and the effects of imported milk on the market. In response, domestic milk brands have cut prices in an attempt to lure customers.

Chinese milk market

Supply & Demand Imbalance?

Analysts have observed that the prevalence of discount promotions doesn't necessarily signal a supply and demand imbalance. Instead, in their view, the dairy market is returning to a normal state following a 70% increase in sales of imported milk. Dairy prices are expected to drop until October, the traditional high sales season for dairy products.

pure milk

Milk price fluctuations also indicate a change in the product layout within China's dairy market. Imported normal-temperature milks have seen robust sales; pasteurized milk and yogurt are two product categories that have taken off. The yogurt sales are expected to increase by 20%-25% in 2018, and pasteurized milk sales are projected for a 13.5% increase. 2018 has been identified as a turning point in the development of the Chinese dairy industry, in which low-temperature pasteurized milk and yogurt assume greater importance in the market.

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