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The High-end Dairy Market in China

2018-10-22 13:08 Monday


In recent years, concentration of dairy market has been increasing, and the revenues and market share of dairy giants has steadily grown. As large dairy producers have already achieved market dominance, they have turned their attention to reaching a wider range of consumers by offering new and novel products.

dairy

In the wake of consumption upgrading, some regional dairy enterprises which lacked largescale R&D capabilities, lost market share to large dairy enterprises. Forecasts reveal that leading enterprises, such as Mengniu and Yili, will have a market share of 70% in China by 2020.

In recent years, Chinese consumers have paid increasingly more attention to products that enhance quality of life; nutrient-rich dairy products, which provide substantial health and nutrition benefits, have become mainstream. Since 2011, major dairy producers have been active in the high-end dairy market. According to recent data, the sale of high-end products, in particular high-end yogurt, has grown at its fastest pace over the past three years, and the proportion of high-end products on the market has increased continually.

Most notably, healthy dairy products are popular not only in first and second-tier Chinese cities, but also in medium and smaller cities. Dairy companies are looking for new market niches, such as sheep milk powder, organic milk, and vegetable bean milk, in order to keep up with shifting consumer demand.

Developing high-end products requires a large amount of input from enterprises. Small dairy enterprises are limited by insufficient capital and manpower, so it is difficult for them to make breakthroughs in products that embrace market trends. However, larger dairy producers have unparalleled advantages in marketing, product development and supply chain management, and are most likely to be the winners in the market of the future.

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