China’s Children’s Milk Powder Market is Expanding at an Accelerated Pace

The children's milk powder sector is still in its nascent stages of development, with an overall market valuation of about 2 billion yuan ^[2]. Although the number of newborn babies in China in 2019 decreased by 580,000 compared with the previous year, the number of children aged between 4-5 is huge ^[3]. The demand for children's milk powder is trending upwards and is enticing established players and new entrants to develop products.

Government policy is also shaping the dairy consumption habits of children:

• During this year’s COVID-19 outbreak, The National Health Commission suggested, "people consume an egg and 300 grams of milk and dairy products a day."

• During this year’s Two Sessions, a deputy from Yili Group suggested that the government implement a “Drinking Milk for Life Plan” to foster increased dairy consumption.

• During the Seminar on Child Nutrition and Health held during this year’s Children’s Day, experts proposed that dairy enterprises should step up innovation and research and develop more dairy products for children.

New products launched in 2020

In March

Abbott announced the launch of Eleva organic stage 4 milk powder for children.

Selling point: Organic milk

In May

Arla launched Baby&Me organic stage 4 milk powder for children

Selling point: Organic milk

Wondersun Dairy launched a children's milk powder series “Zhuge Xiaojiang." 

Selling point: The series includes products to support children’s brain development, visual development, intestinal health, and immune system.

Yili launched QQ Star children's growth formula.

Selling point: Lactoferrin, probiotics, high calcium (1100mg/100g)

In June

Feihe launched “Zhuoran” children's milk powder aimed at children aged between 3-6

Selling point: Lactoferrin, probiotics BB-12

Yili launched UITSTEKEND GEITENMELK and Seine Mouiller stage 4 milk powder

Selling point: UITSTEKEND GEITENMELK--goat milk, OPO, probiotics

                      Seine Mouiller--organic milk, a combination of lactoferrin and probiotics

A glimpse of bestselling products online (taken on June 3rd)

ChemLinked has sorted out the bestselling stage 4 milk powder products in China’s most popular e-commerce platforms Tmall and Jingdong, and found that domestic brands are more popular in Tmall. In contrast, imported brands are more dominant in Jingdong. Also, Feihe Xingfeifan and Wyeth illuma have leading positions in both Tmall and Jingdong.

Sales compared with other stages (taken on June 3rd)

ChemLinked has sorted out the bestselling milk powder products of domestic brand Feihe and imported brand Wyeth in Tmall Supermarkets and found that stage 4 milk powder is the second most popular category only after stage 3. It shows the great potential of the children’s milk powder sector in China.

Trends towards product segmentation and premiumization

Similar to infant formula, children's milk powder is being heavily influenced by increased segmentation and premiumization trends.

• Brands including Kabrita, Santé L'amour, Karihome have launched children's formula goat milk powder.

• Imported brands Arla and Abbott both launched organic milk powder for children.

• a2 also launched a Chinese version of a2 Platinum stage 4 milk powder last year.

• Some brands have also launched liquid formula milk for children. For example, Synutra launched stage 4 children liquid formula milk in 2017. In this year’s Children’s Day, Yili QQ Star launched liquid formula milk aimed at children of 3-6 years old.