In November, www.cnchemicals.com/, an online shopping guidance website run by NetEase, Inc., released a survey on purchases of infant formula. This shows that safety remains a key concern in Chinese parents' purchases, and also it highlights the importance of origin, brand reputation and nutritional content (some of these being issues which are themselves inextricably related to product safety, or perceptions of it) , according to CCM’s November issue of Dairy Products China News.
The survey showed that most consumers—61.2%—still prefer to buy from supermarkets, which have been a traditional key sales channel. Meanwhile, 30.1% and 6.8% of the respondents prefer to buy from specialty baby stores and online stores respectively. According to a survey from AC Nielsen, sales of infant products (formula, foods and other products) in supermarkets have risen “only” by single-digit growth rates annually in the past two years, whereas sales in specialty baby stores grew by 25% in 2010 and 13% in 2011. Currently, online sales remain relatively small scale but are growing much faster than sales through traditional stores. For example, Taobao.com (the largest B2C website in China, and claiming to be one of the world’s top 20 most visited websites) has indicated that food sales in its online mart Tmall.com have been rising by 300+% on average over the last few years.
According to the survey, 76.8% of the respondents see food safety as their key concern when purchasing infant formula, followed by 73.6% for origin, 72.4% for brand reputation, 71.6% for nutrition and 45.3% for price. Even though the price of infant formula has risen noticeably recently, imported brands are prospering and increasing numbers of domestic dairy processors have been encouraged to launch more premium infant formula products.
As shown above, country of origin is one of the main concerns for buyers. The three most favoured sources are New Zealand, the Netherlands and the US. The survey also indicates that customers generally prefer multinational infant formula. This view is supported by a number of previous studies, notably the report issued in 2009 by AC Nielsen, which suggested that ~70% of Chinese customers preferred multinational brands both in supermarkets and baby specialty stores.
A large number of customers prefer multinational infant formula because of their high quality. According to the survey, the top 10 preferred brands are Wyeth, Karicare, Aptamil, Friso, Nutrilon, Mead Johnson, Abbott, Feihe, Meiji and Heinz—most of them are multinational ones, signalling the importance for domestic dairy processors to improve their brand reputations.
Further price escalation is expected, as the prices of international formula brands have risen by an average of 15.5% annually over the past 6 years, according to a report from People’s Daily. Yet Chinese parents have little choice but to tolerate the price rises so as to minimise the risk of health threats to their children.
Source: Dairy Products China News 1211
http://www.cnchemicals.com/Newsletter/NewsletterDetail_22.html
Content of Dairy Products China News 1211:
Xinghe Paints a Mixed Picture for Whey Products
Casein Sector Prospects
Parental Purchase Criteria for Infant Formula
Key Data Shows Dairy Industry Challenges in Q3
Key Dairy Processors’ Performance in Q3
Anhui Government Further Strengthens Food Safety
Beingmate Plans to Sell Infant Supplies Business
Bright Dairy Raises Prices
Nouriz Reignites Milk Powder Controversy
Milk Price Rises
Neptunus Group Extends Infant Formula Range
Ansy Dairy Launches GUMPs
Dairy Products China News, a monthly publication issued by CCM on the 30th/31st of every month, brings you the latest information on new market dynamics, company dynamics, new dairy products and consumption trend, new legislations and policies and raw milk supply dynamics that are shaping the market.
About CCM
CCM is dedicated to market research in China, Asia-Pacific Rim and global market. With a staff of more than 150 dedicated highly-educated professionals. CCM International offers Market Data, Analysis, Reports, Newsletters, Buyer-Trader Information, Import/Export Analysis all through its new proprietary product ValoTracer. For more information, please visit http://www.cnchemicals.com.
Guangzhou CCM Information Science & Technology Co., Ltd.
17th Floor, Huihua Commercial & Trade Mansion, No.80 Xianlie Zhong Road, Guangzhou 510070, China
Tel: 86-20-37616606
Email: econtact@cnchemicals.com