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Several formula companies are increasing their investments in the high-end formula market.

Several formula companies are increasing their investments in the high-end formula market.

TraderKnowsTraderKnows
04-28
SummaryIn recent years, the decline in birth rates has been impacting the mother-and-baby product industry, with the potential for market contraction. Finding ways to remain resilient in the face of a shrinking market has become a new challenge.

In recent years, China's birth rate has gradually declined, which has directly impacted the infant formula industry, strongly linked to birth rates. Additionally, as the public's familiarity and understanding of formula nutrition deepens, more companies are increasingly investing in high-end infant formula and intensifying research and development efforts.

According to data provided by relevant institutions, the size of the domestic infant formula market in 2023 was 157.2 billion yuan, a 4% decrease year-on-year. The shrinking market and reduced consumer group, coupled with a trend towards premium consumption, have led people to prefer buying high-end formula over bulk purchasing of budget brands.

New-generation families have shifted their focus from the price and quantity of formula to now concerning themselves with nutritional content, absorption efficiency, and safety, which has forced companies to shift towards producing high-end formula.

According to recent statistical data from Baobao Tree, a leading domestic maternal and child internet platform, the new generation of mothers, primarily born in the 1990s, differs from past generations in their approach to parenting, emphasizing scientific and meticulous planning. Therefore, many expectant mothers begin selecting infant formula in advance during their pregnancy.

This new generation of mothers no longer prioritizes price and cost-effectiveness when choosing infant formula. Instead, they consider the formula's nutritional elements, with the highest focus on lactoferrin, probiotics, and DHA/ARA, which are widely recognized as beneficial nutrients for infants and toddlers.

In the context of a declining birth rate and a market leaning towards high-end formulas, leading domestic formula manufacturers such as Feihe, Junlebao, Yili, and Mengniu have all established their nutritional research institutes to develop higher-quality infant formula.

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