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Marriage rate and birth rate both drop, infant formula industry is chilling, and the situation of excess milk powder capacity is intensifying

发布日期: 2019年07月30日 Source: China Business News Release Date: July 30, 2019 Baby food

The booming infant formula industry is feeling chills.

A few days ago, at the 2019 CBME China Maternity and Baby Expo, known as the industry weathervane, the site was crowded and flourishing, but the cold winter has become the most mentioned vocabulary during the exhibition. Behind the lively venue, large and small milk powder brands and distributors Anxiety is emerging in my heart. It is not difficult to find that with the decline of the marriage rate and the birth rate, the situation of excess milk powder production capacity will intensify, and the competition between the big brands will make the future living environment of the industry more cruel.

Winter is here

Before the exhibition, a photo shared by industry forum data was almost swiped on the mother-to-child channel. The screen was titled "Shocking 2019", and the content was the living status of mother-and-baby stores: 70% of mother-and-baby stores Milk powder sales have fallen by 20% to 30% compared to 2018, 50% of maternal and infant store turnover has been cut, and 90% of maternal and infant stores have opened new customers with a steep decline.

"This is not an exaggerated statement." Mr. Zheng, a milk powder distributor in Qingdao, Shandong, told reporters that since this year, the operation of some maternal and infant stores has become difficult, and the business of milk powder and diapers has declined significantly. Some small areas with a certain size Chain mother and baby stores have begun to shrink or close.

The predicament faced by the mother and infant industry largely comes from the decline in the birth rate, which is directly reflected in milk powder products, which have been the core products of mother and infant stores and accounted for a considerable amount of sales.

He Fan, chief economist of Entropy Capital, said at the "2019 CBME China Maternity and Baby Industry Summit": "What is the slowest variable we need to focus on most? It is the population. We can see that the population we are born is declining, and the total fertility rate is also Declining. "

This data is reflected in the birth rate of the population. In 2018, China's annual birth rate was 15.23 million, which was 2 million lower than the 2017 birth rate of 17.23 million. The birth rate was 10.94 per thousand. On the other hand, it is reflected in the marriage rate. According to the National Bureau of Statistics, the total number of domestic marriage registrations in 2017 was 10.63 million, and in 2014, this number was 13.02 million, a difference of nearly 3 million in three years. In 2018, the total number of marriage registrations decreased by 480,000 pairs year-on-year, and the marriage rate was 7.2 ‰. In addition, the average first marriage age of women of childbearing age in China has been postponed continuously from 21.4 years in 1990 to 25.7 years in 2017. Delaying the marriage age has also affected the lower birth rate.

Huatai Securities analyst Liang Zhonghua pointed out in the research report that due to factors such as fertility desire and the reduction of women of childbearing age, the total number of new born people is expected to fall to 14 million in 2019, and it is likely to fall below 13 million within 5 years.

"The cold winter in the industry has arrived, and it will be cold winter in 2020, as well as in 2021." Bao Xiufei, general manager of Beinmei (002570.SZ), told reporters that the total capacity of the milk powder market will not return to previous levels.

According to the "2019 CBME China Maternal, Child and Baby Industry Trend Report", in 2018, the sales growth of various categories operated by the milk powder industry agents, 41% of milk powder agents did not achieve growth, while 59% of retailers did not consider adding milk powder brands.

By 2019, with the gradual impact of the decline in the birth of the population on the market, the trend of the winter is more obvious, which also makes dealers feel anxious. The 2019 Baby and Baby Show is held for the first time in two venues this year, and they are far apart. Previously, there were exhibitors worrying that people would be diverted, but in fact there was only a lot more visitors than in previous years, and there were many dealers. He said that he came from abroad but did not have very clear product requirements. Instead, he came to understand the industry situation and see if there were new opportunities.

Brand war

Under the cold winter, the exhibitors have also undergone great changes. The brand display and investment attraction of previous baby and child exhibitions has a stronger meaning, especially the international trade-type milk powder product recruitment model accounts for nearly one-third, and In this exhibition, international trade-type milk powder brands are almost extinct; almost all of them have been replaced by brand enterprises.

Zhou Xiaofa, president of Jiangxi Meilu Dairy, told reporters that traditional international trade milk powder has always been simple to operate and is a "product + channel" model that is driven solely by profit. However, this model does not seem to work today, although 60% to 70% Consumers purchase products relying on recommendations from mother and baby stores, but have more requirements on product brands.

According to him, the current market sales of milk powder for mother and baby stores have fallen sharply. This change has caused tremendous pressure on dairy companies, forcing companies to increase brand education, training and consumer services to increase viscosity and simply trade. The model can no longer be sold.

The big companies in the industry are also feeling the pressure and have adopted a more high-profile approach.

Before and after the Baby and Baby Show, several domestic and foreign dairy companies launched new brand spokespersons at the same time. Yili Co., Ltd. has obtained Xie Na for the newly listed organic milk powder Senna Mu, and Yashili International (01230.HK) is its core product Yashili and Yang Milk powder brand Dora Lamb brought in popular actors Yao Chen and Huang Jingyu, and Bright Dairy (600597.SH) invited actor Liu Haoran. There are also many small and medium-sized dairy companies that have selected some second- and third-tier stars as spokespersons. Previously, only a few brands in the industry, such as Feihe and Heshengyuan, a subsidiary of Jianhe Group (01112.HK), had star endorsements.

"Behind this round of celebrity endorsements is the brand war." Zhao Libo, vice president of marketing at Yashili Group, told reporters that the purpose of celebrity endorsements is to enhance the brand image and attract consumers' attention, especially when the market competition has entered the competition between big brands. Product safety is no longer a core selling point, and celebrity endorsements can help consumers identify brands, and also demonstrate corporate strength and establish differentiation.

While celebrity endorsements are a common method for fast-moving consumer goods companies, they also mean huge investment. In addition to endorsement fees, a large amount of advertising investment and market activities are required to match.

Taking Feihe Dairy as an example, driven by the endorsement of actor Zhang Ziyi and a large number of market activities, Feihe ’s core product sales increased from 710 million in 2016 to 5.11 billion in 2018. However, Feihe ’s advertising costs From 490 million yuan to 1.17 billion yuan, publicity expenses increased from 310 million yuan to 610 million yuan.

In the opinion of Yang Guochao, senior vice president of Royal Dutch Friesland China, this change also shows from the side that the competition for infant formula is fierce, and companies are facing a lot of pressure on sales. They want to use new methods to change. Attract consumer attention and purchase conversions to create marketing momentum. However, it also shows that the influence of fashion parenting marketing methods, including Xiaohongshu and Douyin, as well as celebrity endorsements, on the new generation of consumers, especially young mothers in the post-90s generation, is expanding.

But on the other hand, companies continue to overweight and brand and have difficulties.

Song Liang, an independent dairy analyst, said that before that, large-scale milk powder companies hoped to continue to upgrade their formulas to eventually differentiate their products. Although the current infant formula formula registration system has reduced the milk powder market brand and chaos, it has also given The adjustment of the formulation of the enterprise has created certain restrictions, so currently it has to spend more effort on the brand.

There are also executives from large domestic dairy companies that celebrity endorsements have to be done now. On the one hand, competitors are doing it. On the other hand, traditional marketing methods are gradually failing. Milk powder companies also need new ways to reach and delight consumers.

However, Yang Guochao believes that the effect of celebrity endorsements remains to be seen. After all, the low-line market is not the key market for fashion childcare marketing. The promotion and recommendation of low-line market channels and the reputation of mothers of the same age are still very important.

Sinking and subdivision

With the decline in the total size of the domestic milk powder market, the domestic milk powder industry is driving the growth of the industry from incremental growth to the repetitive competition in the stock market. From the perspective of many milk powder companies, it is hoped that they will grow through the cold winter. It lies in the sinking of the channel, and the other side lies in seizing the opportunity of market segmentation.

For foreign companies, they hope to seize the opportunity of sinking channels. In addition to the saturation of the first- and second-tier markets that foreign-funded enterprises are observing, in the new round of the second-child policy process, the fertility desire in the low-tier markets is stronger, which also means more market opportunities.

Yang Guochao told reporters that due to the decline in the birth rate and the decrease in the total market demand, the market competition for infant formula is increasing this year, and it is not difficult to achieve the set goals. Fiesland's overall strategy this year is to continue to make progress steadily, consolidate the first-tier and second-tier markets, consolidate key cities, key channels and key customers, and at the same time explore sinking low-tier markets.

In fact, since the end of 2017, well-known milk powder brands including Royal Friesland, Wyeth, Mead Johnson have adopted a series of channel sinking strategies, and the overall effect is good, but most of them have failed to meet the original expectations.

Yang Guochao believes that for foreign brand enterprises, accelerating sinking is a relatively large challenge. The current market environment does not mean that if you want to accelerate sinking, you can sink. The characteristics and marketing of low-end markets are very different from those of first- and second-tier markets.

According to data released by Nielsen, in low-tier cities, mother-to-child channels account for about 50% of milk powder sales. Another data shows that there are about 200,000 mother and baby stores in China at present, but the industry concentration is very low, and its pursuit of profit distribution has also become the key to hinder the sinking of foreign brands. If it is too small, it cannot be satisfied. Too much appetite for mother and baby stores may impact the existing product price system and outweigh the benefits.

Dan Zhiyong, vice president of Danish dairy company mille food, told reporters that milk powder is both a profit product and a flow product in mother and baby stores, and still accounts for more than 50% of sales. The market decline forced mother and baby stores to compromise with branded products, but This process will not happen overnight. It is found in market research that mother and baby shop owners have both the idea of brand compromise and the pursuit of profit scale, which is also the difficulty. Therefore, mille food is also adjusting its strategy, splitting the original brand into two and operating independently, trying to seize the low-end market through the strategy of "high-quality parity + non-first-line imported brands".

For most domestic milk powder companies, the layout is in the 3 ~ 5 tier market, so they hope to seize the opportunities in market segments.

Zhao Libo believes that the market for large-scale milk powder cakes will not expand and opportunities for small categories gradually emerge. Therefore, Yashili Group will place the next growth opportunity in sub-sectors such as goat milk powder and organic milk powder.

Bao Xiufei also agreed that traditional milk powder is only a basic product, and opportunities in future market segments will highlight functionality, such as enhancing children's physique or protecting eyesight, as well as special medical formula milk powder fields with higher technical content. At present, Beinmei has also made a large amount of reserves here. At present, 6 special medical formulas have been registered, and 3 are waiting for approval in the future.

It is worth noting that some companies have also turned to the upstream and downstream expansion of the industrial chain. For example, at this exhibition, the organic snacks GOOD GOUT and goat milk powder products that Jianhe Group had previously acquired were also unveiled. An Yuting, who has just taken over the post of CEO of Jianhe Group from Luo Fei in March this year, believes that Jianhe's strategy will focus on "subverting innovation differentiation" and "reacting quickly to win the market."

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Reviews

Le Mom

  • (Visitors) 7 days ago

Reply to the topic: “Central suspension without school suspension” was deflected and attracted the public. The Ministry of Education answered questions about the “School suspension without school suspension” related to the postponement of primary and secondary schools.

While asking our parents to return to work, it is homework for various groups in the school. It is a sophomore, Chinese, mathematics, English, music, sports, art, and so many groups. Parents must accompany their children to read and complete the tasks. Then take pictures, videos! Then, parents are back to work. How can these homework be completed? Is it time to return from work? It's really unreasonable. Parents are tired.

Luo Jiahui

  • (Visitors) 7 days ago

Reply to the topic: “Central suspension without school suspension” was deflected and attracted the public. The Ministry of Education answered questions about the “School suspension without school suspension” related to the postponement of primary and secondary schools.

I think the health of students is very important now, especially under the background of this student, there are already a large number of students with myopia. Why does the school education even force students to watch it so that glasses ca n’t work in a day, I I am a senior in high school. I have to stare at the screen for at least four hours a day. The glasses are really tired, and it takes about seven or eight hours a day to do questions on the screen. The glasses are really too high.

Oops

  • (Visitors) 7 days ago

Reply to the topic: “Central suspension without school suspension” was deflected and attracted the public. The Ministry of Education answered questions about the “School suspension without school suspension” related to the postponement of primary and secondary schools.

Teachers, parents, and children all torture each other. Actually, the kindergarten also recorded online lessons. I did n’t think it was necessary for my second grade. The teacher could arrange special homework, copy papers, diary and manual. The damage to the eyes is great, and the loss is worth it.

Yunpiao

  • (Visitors) 7 days ago

Reply to the topic: “Central suspension without school suspension” was deflected and attracted the public. The Ministry of Education answered questions about the “School suspension without school suspension” related to the postponement of primary and secondary schools.

I'm curious. Except for the supplementary classes for the junior high school and high school winter vacation, aren't all the elementary and middle schools yet to start? Generally, it is around February 25 every year. Why are there live lectures everywhere? How are the students' schedules arranged? Looking at parents' phones all day long?

The commoner is far away

  • (Visitors) 7 days ago

Reply to the topic: “Central suspension without school suspension” was deflected and attracted the public. The Ministry of Education answered questions about the “School suspension without school suspension” related to the postponement of primary and secondary schools.

Suspension and non-stop online teaching is to make head decisions, without considering the actual situation of each teacher or student, can it be equipped? Non-graduate classes may be delayed for the summer vacation and shortened.

Live the Royal Sister Rice

  • (Visitors) 8 days ago

Reply to the subject: Wuhan million elementary and middle school students start online classes, unified lessons in the morning, personalized coaching in the afternoon, missed live broadcast can watch video playback

I think this form is very good. In the fifth grade, a class is only about 15 minutes. It is very efficient. Think about how much time you usually waste at school. After listening, the child can rest and do his own work. He finishes his homework at six o'clock, and the evening time is all his own.

Zheng Yu brother

  • (Visitors) 8 days ago

Reply to the topic: Wuhan million elementary and middle school students start online classes, unified lessons in the morning, personalized coaching in the afternoon, missed live lessons, see video playback

It looks like a good thing, but it's impractical to think about it a little more, one without teaching materials, two without teaching participants, three without multimedia courseware, and four without classroom feedback and interaction. How to keep the network unblocked? How to ensure everyone's participation? Does the leader feel that the teacher can talk like a speaker for three hours without stopping? Usually carrying the new curriculum standard with students as the main body of the classroom, at this moment, the teacher sang a monologue.

Worchen

  • (Visitors) 8 days ago

Reply to the topic: Wuhan million elementary and middle school students start online classes, unified lessons in the morning, personalized coaching in the afternoon, missed live lessons, see video playback

This is indeed a new transformation. The teacher did not expect that one day it would become a webcast anchor. Maybe one day, the teaching methods changed due to the virus epidemic in the new hall increased the popularity of online education. In fact, from one aspect, this is also necessary for the progress of the times. School education can also be diversified and adapted to different courses on different platforms.

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