In an exclusive interview, we delve into the current state of the infant formula market in China during this year’s Double 11 sales event, which typically prompts a rush among consumers to stock up. However, young mothers like Xiao Ai are approaching this year’s event with a relaxed attitude, stating, “I might buy a little more, but the prices don’t seem very appealing.” Despite the trend of stocking up on infant formula during this peak shopping period, many new-age mothers prefer to purchase only 2-4 cans at a time, enough to last a month or two, wary of the potential hassle if their child develops an allergy.
According to a recent report from Babytree, a parenting website, there is a growing consensus among the new generation of mothers on the importance of scientific parenting and meticulous feeding practices. Most of these mothers are increasingly committed to these modern parenting philosophies.
This year, infant formula brands are adopting a similarly relaxed approach during Double 11. One consumer shared their disappointment online, noting that although they anticipated low prices, the same six cans of formula cost more during Double 11 compared to the sales at other events like 618.
Our observations reveal that while major domestic and international baby formula brands are participating in promotional activities this Double 11, the discounts offered are modest and often on par with or even higher than typical retail prices. Instead, brands are focusing on offering various promotional gifts, ranging from strollers and toys to travel and video memberships.
Industry experts suggest that this year’s sales promotions reflect a broader trend among brands aiming to stabilize pricing and inventory levels. A representative from a dairy company mentioned that there was little emphasis on Double 11 data last year, indicating a shift in strategy. Analyst Song Liang pointed out that while price competition has traditionally been effective for selling products, this year, brands seem hesitant to engage in major price cuts as they prioritize maintaining market stability.
The infant formula market has been shrinking since 2021 due to a declining birth rate, and the sector is facing significant challenges, including diminished demand and falling milk prices. Even though there is a slight increase in birth rates this Lunar Year of the Dragon, market competition remains intense, as most companies reported difficulties in profitability.
Since 2024 began, leading formula brands have initiated efforts to stabilize market prices. Feihe Dairy’s chairman has called for unity among the industry to shift growth strategies from price competition towards investing in technology and brand services. Mid-year reports indicated that several leading companies, including Feihe, Ausnutria, and a2 Milk, experienced growth amidst these market adjustments.
Amidst these challenges, the industry is exploring new pathways. With a significant population of children aged 3-12 totaling 168 million—over five times that of infants aged 0-3—companies are diversifying their product offerings. Traditionally reliant on infant formula, firms are now seeking growth by entering into various new markets.
Feihe has been expanding its product matrix to include offerings for pregnant women, children, and adults. According to third-party data, Feihe has taken the lead in the children’s formula market, while Yili has also expanded its business beyond formula, launching new products in the tea beverage sector. Akash Bedi, CEO of Health and Nutrition Group, emphasized ongoing commitment to family nutrition and high-margin growth products in both established and emerging markets.
Moreover, companies are eyeing international opportunities. Yili recently launched its flagship store in Los Angeles, and Feihe has attained a production license to export its formula to Canada, aiming to extend its reach into North American markets. Other domestic brands are leveraging their overseas facilities for global expansion.
Analyst Song Liang points out that with the maturity of China’s dairy industry and product offerings, along with its well-established international resource networks, this could be a timely opportunity for expansion into global markets. However, he notes that domestic companies still have significant work to do concerning brand recognition and market familiarity.
