Buffalo Milk Emerging as Force in China’s Dairy Market

Buffalo milk is a creamy dairy product sourced primarily from water buffaloes. In recent years, buffalo milk products have sprung up in the Chinese market, some of which have performed well. Guangxi is synonymous with water buffalo, and fittingly the province is the largest producer of buffalo milk in China. The province has already entered into cooperation with Tmall to promote buffalo milk.

Cow Milk vs. Buffalo Milk

Cow milk accounts for 83% of the world's total milk production. In distant second-place buffalo milk accounts for only 12% ^[1]. Water buffaloes are mostly seen in South Asian countries such as India and Pakistan. Although it is uncommon in most of Europe, buffalo milk plays a significant role in Mediterranean cultures, where it is utilized in making traditional mozzarella cheese.

Only five provinces are involved in any significant way in water buffalo husbandry ^[2]. Guangxi has the largest number of animals ^[3] and has a subtropical monsoon climate, which is perfect for water buffalo dairy farming. People in southern China provinces such as Guangxi and Guangdong are more familiar with buffalo milk because it is an essential ingredient for Cantonese milk custard and ginger milk curd.

Despite a reduced per animal milk yield, buffalo milk is higher in protein, calcium, and vitamin A and contains less cholesterol and sodium than cow milk. According to ScienceDirect, to produce 1 kg of butter requires 14 kg of cow’s milk but only 10 kg of buffalo milk ^[4].

	Cow Milk	Buffalo Milk
Properties	More cholesterol, less fat, fewer calories	Less cholesterol, more fat, more calories
Nutrition	An excellent source of calcium	Buffalo milk is higher in protein, calcium, vitamin A, amino acid and iron than cow milk.
Uses	Dairy products such as cheese and seeets, but less thick and creamy	Produces creamy and thick dairy products like milk custard, a famous dessert in China's Guangdong and Guangxi areas.
Top consumers and producers	All over the world	China (Guangdong and Guangxi areas), South Asia (India and Pakistan) and Italy.

Source: Diffen

Chinese buffalo milk market

Buffalo milk marketing campaigns tend to leverage the rarity of the milk and the higher nutritional value of buffalo milk as a key product differentiators, which has allowed buffalo milk products to gain significant traction in recent years.

Tmall has also contributed to the popularity of this category. In April 2020, Tmall cooperated with Guangxi buffalo milk manufacturers Baifei Dairy and Huangshi Dairy to help boost the fame and sales of buffalo milk. From April 21 to April 23, the turnover of buffalo milk exceeded 10 million yuan, a year-on-year increase of more than 4000%, rising nearly 20 times from early April, with more than 170,000 new buyers ^[5].

In May, 210,000 pieces of Lesson Mofei Buffalo Milk sold out in only 3 minutes during a session of Taobao top anchor Li Jiaqi’s live-stream ^[6].

During the 2020 618 Mid-Year Shopping Festival, sales of buffalo milk grew more than 400% year on year, and the sales of Bai Fei Lao Pure Buffalo Milk reached 2 million boxes ^[7]. Tmall lists the category as the Top7 promising dairy and beverage categories.

Despite the promising projections highlighting the sector's potential, there are still several issues hindering the development of the industry, such as a small overall herd size, low per animal milk yield, and lack of brand awareness.

Chinese market stakeholders

It can be seen from the chart that the major players in China’s buffalo milk market are from Guangxi, among which, Bai Fei Lao, Lesson, and Lepur are the TOP3 selling brands. Huang Shi Dairy has the most diverse product portfolio with several value-added products. Bai Fei Lao follows this strategy and has already rolled out buffalo yogurt and buffalo milk rich in selenium and calcium.

***Disclaimer: All images used in this article are from the internet.