Chinese market of

infant formula milk

powder
China's milk powder market capacity and 1
trend

Influential factors of infant formula milk 2

powder market

Impact of overseas shopping on milk powder 3

market

2
China's milk powder market capacity
According to Euromonitor data, the overall average retail price of infant formula milk powder products in China rose from
228.5 yuan/kg to 268.9 yuan/kg in 2016-2021, with CAGR of 3.3%; The retail scale increased from 587.5 thousand tons to
628.4 thousand tons, with CAGR of 1.4%; From 2016 to 2021, infant formula milk powder experienced the process of both
quantity and price rising, and the sales scale increased from 134.25 billion yuan in 2016 to 168.96 billion yuan in 2021

market
capacity （ 100million ）
3
 China's milk powder market trend

The birth population in China is declining. At present, the "quantity" of infant formula milk powder has
shrunk. However, driven by high-end products, the price continues to increase, which drives the growth
of the overall market sales. In the future, the introduction of the birth policy will help to increase the
demand in the infant formula industry, and the rapidly growing child formula market segment is also
expected to bring new growth points to the industry.

Milk powder sales unit price yoy

RMB/kg

Number of newborn babies (10000) Growth rate

4
China's milk powder market capacity and 1
trend

Influential factors of infant formula milk 2

powder market

Impact of overseas shopping on milk powder 3

market

5
Influential factors (1/2)

The consumption of the milk powder industry is determined by the number of newborns population and
per capita consumption. In recent years, China's demographic dividend has gradually disappeared with
the decline of the birth rate. At the same time, the breastfeeding rate has been at a low level, and it is
difficult to increase the per capita consumption. Therefore, the future growth space of milk powder
consumption is limited, and the infant powder industry has entered the stage of the competition in the
stock market. The growth of the infant powder market in the next five years is mainly driven by the
price. It is estimated that the market size of infant powder in China will reach 1897 in 2026. 300 million
yuan.
Breastfeeding rate by region Comparison of domestic urban feeding rate

china world Low - and big city

Rural avarege
middle-income
countries areas
6
Influential factors (2/2)

At present, the newborn population in China is declining year by year, which reduces the domestic milk
powder market consumption base. Among them, the decline of population is mainly affected by the
following factors:

1) At present, the post-80s/90s generation is the main group of childbearing age. Affected by the one-
child policy, the number of women of childbearing age continues to decrease. In 2021, there will be
about 5 million fewer women of childbearing age than the previous year, including about 3 million fewer
women of childbearing age in the peak childbearing period at the age of 21-35.

2) The fertility level continued to decline. Faced with the economic pressure of high housing prices, low
employment rates, and high birth costs, young people gradually change their concept of childbearing
and choose to marry late and have children late.

3) COVID-19 has also delayed the marriage and childbirth arrangements of young people to a certain
extent.

7
China's milk powder market capacity and 1
trend

Influential factors of infant formula milk 2

powder market

Impact of overseas shopping on milk powder 3

market

8
Impact of overseas shopping

• At present, there are no clear statistics on the amount of milk powder entering the
Chinese market by "overseas shopping", but according to the largest online sales
platform "Taobao"

• According to the estimation of www. cn.com and the website of "Overseas E-shopping",
the largest overseas transshipment platform, the scale of "overseas shopping" milk
powder in 2012 is conservatively estimated to be more than 80000 tons

• Such large-scale "overseas shopping" milk powder accounts for about 30% of the milk
powder market, which is equal to the total market share of Mead Johnson, Dumex, and
Wyeth. This has created a huge pressure and impact on the sales of other domestic
brands of milk powder, especially domestic milk powder. More importantly, "Haitao"
milk powder has incomparable advantages over domestic milk powder both in price
and quality. If the scale of "Haitao" milk powder is further expanded, it will be more
difficult to boost consumers' confidence in domestic milk powder.