Since the 2008 melamine scandal, the domestic milk market in China has had a hard time gaining the trust of consumers. This scandal hurt all players, including Mengniu Dairy and Yili Group, which are the leaders of the Chinese dairy industry. The crisis has also influenced milk consumers in China to purchase milk and dairy products from foreign brands, putting domestic milk producers at a disadvantage.

Even though the evolving consumer perception of milk in China has facilitated the growth of import and consumption of foreign milk firms, domestic milk firms in China still have dominated the milk market in China. Moreover, according to MarketLine, regarding the overall performance, from 2015 to 2019, the milk market in China has seen steady growth. Thus the market is anticipated to grow in the future.

Analysis of China’s milk market

Size of China’s milk market is gradually expanding

Chinese consumers are turning on to the nutritional benefits of milk products. It is predicted that sales of milk in China will increase from 11.95 billion RMB  (2018) to 12.83 billion RMB (2022), with a 1.7% annual growth rate. Thus the market size of milk in China has been growing steadily.

Data source: MarketLine, China’s milk market value  

Consumption of milk in China has grown four-fold since 2012

Due to the influence of traditional dietary habits and limits of economic development, in 2012, each person consumed only about 6.39 kilograms of milk per year. That was only about 1/3 of the consumption of an average Indian consumer and 1/10 that of a western consumer. Moreover, the consumption of powder milk in China ranks at the top among all countries in the world.

In 2020, the consumption of milk in China has increased remarkably. The consumption of milk per capita is projected to reach 28 kilograms in 2020 and 41 kilograms in 2030.

Data source: Qianzhan, Sales volume of the milk market in China  

Data source: Qianzhan, Sales value of milk in China 

Domestic brands regain trust, imported milk in China faces fierce competition

According to IBISWorld, due to the preference of milk consumers in China and demand for middle and high-end milk, import volume has increased steadily. With rising import volume and average prices, the import value of milk in China reached $5.47 billion in 2019, with a YOY growth of 7.6%.

Since domestic Chinese milk brands have dedicate to enhancing the quality of milk they are replacing some import products, which has led to a declining proportion of imports in the domestic demand of milk market in China. As a result, in 2019, imported milk represented 7.5% of domestic demand for milk in China, which decreased from 10.1% in 2014.

Data source: IBISWorld, Import partners of milk market in China (2019)

The price of milk in China is gradually increasing

Overall, the price of milk in China has a rising trend. The increasing price attributes to the rapid growth of consumption of milk in China and the condition of upstream supply chains.

Data source: ruzhipincy & chyxx, Price evolution of milk in China  

UHT milk is the most popular milk among Chinese consumers

The product segmentation of milk in China is mainly categorized into liquid milk and powdered milk. They are similar in terms of nutrients while different in terms of taste, form and price. Powdered milk consists of the process of dehydration and evaporation, which helps preserve it. Even though it loses its flavor during the dehydration process, it perfectly matches with smoothies, tea and filtered coffee. On the other hand, fresh milk contains more nutrition than powdered milk does and has a better taste.

Liquid milk is the largest segment. According to MarketLine, UHT milk is more popular with milk consumers in China, in contrast to  western consumers who prefer fresh liquid milk. 

The milk powder segment in China targets both adults and infants. According to Nielsen China, online and offline milk powder sales reached 1.8 billion RMB and 1.5 billion respectively in 2018. Specifically, according to IBISWorld, the infant milk powder segment has been experiencing rapid growth and highly profitable. The market size reached 175.5 billion RMB in 2019 and is expected to reach 216.3 billion RMB by 2024. With the implementation of the two-child policy, demand for infant milk powder is increasing rapidly.

Consumption of milk powder for adults, especially for families, has been rising steadily. Online shopping has facilitated the growth of this segment. The milk powder for adults in China is in the early stage of the product lifecycle by considering its market scale and profitability. Hence the market size of this segment remains stable as milk consumers in China lack product awareness.  

The supermarket is the most important distribution channel in China’s milk market

According to IBISWorld, Supermarkets are the largest suppliers of milk and offer the most extensive product range. Regarding food wholesalers, the majority of milk brands in China sell their products in local regions. They often establish wholesalers in the target province and are in charge of recruiting and managing distributors in tier-two or three cities. Regarding food retailers convenience stores, the revenue generated from these channels has experienced continuous growth. Other markets, including online shopping, have been developing rapidly in recent years. Milk consumers in China purchase milk from online shops due to its convenience and low prices.

Data source: IBISWorld, Distribution Channels of Milk Market in China (2019)

‘Safety’ is the number one concern of Chinese milk consumers. Consumers from different regions and segment groups in China consume milk in different ways.

Regarding Chinese consumers’ attributes of milk, consumers from developed areas value “safety first” while consumers from less developed regions value quality and brand. In general, both of the groups value safety certification, shelf life, nutrition, taste, brand organic, etc.

Families are likely to purchase a large amount of milk on the weekends and prefer fresh milk; office workers and students prefer buying liquid milk with paperboard packaging in the morning.

Milk packaging in China

Regarding the packaging of milk in China, paperboard, plastic and glass are common materials. Domestic milk firms in China mainly outsource both paperboard and plastic packaging to foreign firms such as Tetra Pak, PrePack and SIG Combibloc. Paperboard packaging is normally used in preserving both UHT milk and fresh milk. It helps preserve the quality of the milk. Thus the quality is less likely to go bad easily and can preserve more than six months. Plastic and glass are used in preserving fresh milk. The size of the packaging is mainly standardized as 250 ml.

Photo source: Zhihu, Packaging of milk in China

Chinese prefer to purchase milk in smaller packaging than westerners do. Owing to the habit of some milk consumers in China, it is convenient for students and office workers to carry a single serving size of milk with them. Secondly, the established supply chain and logistics in China cannot support the transportation of fresh milk perfectly. Hence milk with paperboard packaging is more prevalent in the milk market in China as it can preserve for an extended period and does not require a sophisticated logistics system to preserve the quality.

Does being lactose intolerant stop Chinese from consuming milk?   

Even though research shows that Asians, including Chinese, are mostly lactose-intolerant, it does not affect the sales of milk in China significantly. According to Zhihu, their consistent milk consumption can be explained by:

1. Consumers perceive that a small amount of milk would not aggravate the discomfort of lactose-intolerance, and this might is another reason why packaging milk in small portions popular in China.
2. Some people do not even realize they suffer from lactose-intolerance since their symptoms are not obvious.
3. Some of them perceive that the ingredients of Chinese milk are adapted to eliminate the effect caused by lactose-intolerance, that is, ingredients such as water and chemicals are added to dilute the lactose.

Brand analysis of China’s milk market

Domestic Chinese milk brands are making a return after being tarnished by scandals

Among the top 10 dairy milk companies, 9 are local brands. Mengniu, Yili, Guangming, Wangzai, Wandashan, Weita Milk and Chenguang are the top seven Chinese domestic brands with two producers originating from Taiwan and Hong Kong. Founded in 1999, Mengniu is the largest dairy milk company in China. It possesses over 20 branches in 15 provinces and exports its products to the US, Canada, Mongolia and South-East Asia. Although it maintains a good reputation, not even Mengniu can escape from the melamine scandal. As a 2008 Olympic Games sponsor, Yili, the second-largest dairy company, has explored a new way to market its product and overcome the scandal.

In 2020, Mengniu and Yili have further consolidated their leading positions in China’s milk market, with more than 30% of market share. Both firms have developed differentiated milk products to capture market share aggressively.

Data source: Euromonitor, Company Shares of Milk in China (2019)

Yili has focused on high-end milk products   

Regarding milk products of Yili, even though the company has developed a variety of milk products, it aims to focus on its high-end segment. Its representative product, Yili and Satine, according to Euromonitor, earned the third (7.4%) and fourth (6.7%) place respectively, in the brand shares of milk product (2019). Satine is positioned as the high-end brand as Yili has significant investment across different business units. Shuhua is a lactose-free product and targets lactose-intolerant consumers. School milk targets students and solely sells to schools in China while QQ Star targets kids in China. Wei Ke Zi is the flavored milk product.   

Photo source: Yili, Milk Products of Yili

Mengniu has adhered to the product differentiation strategy

Likewise, Mengniu has developed various milk products to tailor to different competing with Yili. According to Euromonitor, Mengniu and Deluxe are the pure milk and earned the first (7.9%) and second (7.4%) place respectively, in the brand shares of milk product (2019). Deluxe is the high-end pure milk product. Future Star targets kid consumers in China while Xin Yang Dao targets lactose-intolerant consumers. Mengniu has also developed flavored milk such as Zhen Guo Li and Nai Te. Zhe Zhi Niu Lai (This cow) is the milk product that targets university students in China. Mengniu has also expanded its product lines to fresh milk (i.e. Shiny Meadow and Green House) which Yili has yet to focus on.

Photo source: Mengniu, Milk Products of Mengniu

Influence of COVID-19 and future trends

The outbreak of COVID-19 has affected lots of industries, including China’s milk market. The pandemic has affected each business unit of the milk’s value chain in China.

The value chain of China’s milk market goes through the process of feed manufacturing, milk production, delivery, processing, packaging, distribution, and lastly, retail. Regarding the upstream business, the pandemic has affected the production of

As the situation is gradually recovering in China, so does the milk market. The government in China has implemented particular policies and subsidized the business involved in the milk’s value chain. These actions have sped up the recovery of the milk market in China.

Fresh liquid milk is the future trend

In 2019, the trend of “freshness” has emerged in the milk market. Key industry players such as Yili and Mengniu have started to invest in fresh milk significantly. The outbreak of Covid-19 may foster the growth of this trend since the National Health Commission of China recommends drinking milk. The government sector has suggested that drinking milk is an effective method to strengthen the immune system. Moreover, milk consumers in China have consistently perceived drinking milk as a means of calcium supplement and skincare. Thus it helps to cure osteoporosis and facilitates growing height. As more and more milk consumers in China value nutrition, taste and freshness, nutrition-added fresh liquid milk is likely to be the future trend in China’s milk market.

Photo source: Sohu, Nutritious and fresh liquid milk sold in small cartons in the Chinese market

Creative product packaging can draw consumers’ attention

In comparison with traditional promotion tools such as advertising and direct selling, creative product packaging is a cost-effective tool to promote products and is popular with young consumers. Hence more and more companies have gradually applied this tool.

Photo source: adquan, Creative product packaging of New Hope Group’s milk 

New Hope Group has applied the creative product packaging successfully on its flavored milk. With this co-creation strategy, New Hope Group has collected a list of mottos via social media in China and printed them on the packaging. Meanwhile, the company has designed cute images that are popular among Chinese consumers. These mottos reflect the current Chinese culture and humor of self-depreciating optimism, or passive acceptance of negativity. They are relatable and effectively tease young people’s lifestyles in a lighthearted way.  

In conclusion, China’s milk market is experiencing a steady growth in market size and revenue. Domestic milk brands have occupied the majority of the market share. Currently, the dominant milk product in this market is long-life liquid milk. Nonetheless, with the changing consumers’ perception and improving logistics, fresh liquid milk is projected to be the future trend in this market. Moreover, creative packaging is a useful promotional tool to appeal to milk consumers in China effectively.

Author: Amelia Han

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China is the largest tea producer in the world 

The total global tea output in 2018 was 5.9 million tons, China contributed 2.6 million tons of them (44.7%). China is the largest tea producer in the world, but it still has a huge market demand for tea leaves. Hence, the output of major tea producing countries will continue to grow. In particular, the increased awareness of Chinese consumers on health will drive the global tea market to further increase.

Data Source: iimedia, Tea market in China report by daxue consulting. China is the major tea leaf producer in the world

The tea industry chain in China includes tea planting, picking, use of fertilizers, processing, and packaging. Also, different kinds of tea are rolled, dried, and oxidized. The sales channels are supermarkets, tea shops, restaurants, and e-commerce platforms in China.

China’s tea production market

Green tea leaves make most of the China’s tea production. Considering China’s huge market demand, green tea will continue to maintain its output advantage for a considerable period. Besides, drinking tea is an important part of the Chinese culture and living customs.

Data Source: iimedia, Tea market in China report by daxue consulting. Green tea has the biggest output in the Chinese market

China’s tea sales will maintain an upward trend. With the increase of income of Chinese residents, quality will become an important factor in the sales of tea.

Data Source: Qianzhan, Tea market in China report by daxue consulting. The tea sales revenue in China

China’s demand for tea is rising steadily

China’s 1.4 billion people already drink nearly 40 percent of the world’s tea, and they are thirsty for more. Chinese consumers prefer higher quality tea products, they often rely certification for assurance the tea is organic and sustainably grown. Besides, they agree to pay much more per serving than Western tea consumers. The best tea in China can be up to US$1,000 for 500 grams.

Data Source: Chyxx, Tea market in China report by daxue consulting. Tea leaf prices in China

China exports green tea and imports black tea

Green tea accounts for 83% of the total tea exports. Exports of black tea, green tea, and flower tea all increased by more than 6%. Black tea accounts for 83.3% of tea imports. The rise of new tea drinks such as milk tea in China has further increased the demand for black tea.

Data Source: Chyxx, Proportion of tea exports/imports by tea type

Key characteristics of tea consumers

According to the survey of China Tea Industry Research, tea consumers are mainly enterprise employees with 50,000-120,000 RMB annual salary. They usually have decent spending power and pursue a high-quality life. Hence, office places are a common place to consume tea.

Data Source: China Tea Industry Economic Research, Tea market in China report by daxue consulting. Characteristics of tea consumers in China

Where do Chinese consumers buy tea

Chinese consumers still mainly rely on offline channels such as exclusive stores or large supermarkets in China. Tea enterprises should broaden their channels and combine online & offline to find new ways to attract customers. Quality assurance, convenient purchase, good experience and low price are the focus of consumers attention. Tea companies must consider them when doing channel construction.

Data Source: China Tea Industry Economic Research, Tea market in China report by daxue consulting. Purchasing channels of tea

Drinking milk tea is a daily habit for many Chinese people, and a huge driver of the market

According to the survey of 36Kr Research, milk tea is becoming a part of daily lives for many Chinese people. Around 93% consumers buy milk tea at least once every week. Milk tea consumers are usually repeat customers. That is why it is essential for milk tea brands to improve customers loyalty leading to repeat business.

Data Source: 36Kr research, Tea market in China report by daxue consulting. Milk tea consumption in China

New-style tea consumers are mostly young women in tier-1 cities

Women under 40 years old are the main consumer group. Urban white-collar women in China are particularly keen to milk tea and fruit tea. Only 30% of consumers are male. The male consumer market still has a large space to develop. More research on male flavor and aesthetic preferences of new-style tea may help to further penetrate the market. This is consistent with the fact that many stores are in first tier cities. Tier-1 cities are saturated markets, but second and third tier cities have a lot of room to grow.  However, lower tier city consumers are more concerned with price.

Data Source: 36Kr research, Tea market in China report by daxue consulting. Age distribution of new-style tea consumers

The leading brands in China’s new-style tea market

Most of the direct-sale shops are high-end brands. They are more concentrated in the first-tier cities with higher prices but less offline stores. It means franchises are helpful for expansion but not for a high-end image. There is little variation in store menus, which means there is a trend of product homogeneity in the market.

Case studies of tea brands in China: path to success

Lipton (立顿) – The most successful tea bag brand

Lipton is the largest foreign tea brand in China. It is a black tea brand from England. It mainly focuses on black tea, green tea, jasmine tea, and oolong tea. Its advertising slogan is: “Direct from tea garden to the tea pot”. In 1992, Lipton officially entered China and started to sell black tea and green tea.

Due to the high quality and clear target market, Lipton in China achieved very large sales and market share. Lipton’s owner Unilever invested 50 million USD in Anhui (安徽) province to build one of the biggest tea factories in the world at that time. In 2008, the total annual output value of Lipton was about 23 billion RMB, which was almost the 2/3 of the output value of the China’s tea bag industry. 

How Lipton built itself as a mainstream tea brand

Lipton brought its standardized design and production of tea products when the brand entered China. They helped Lipton reach every corner of the market while also building brand awareness among Chinese consumers. Many foreign tea brands sell tea products from abroad using Chinese distributors. However, Lipton invested in building a local factory and hiring local employees. With this strategy, Lipton greatly reduced the costs and localized the brand. It helped the brand to act quickly to meet the needs of Chinese consumers. In 2008, Lipton was one of the first international brands advertising on mobile Internet in China. The brand was also one of the first to use e-commerce in China.

Lipton targets Chinese white-collar workers and young adults with its tea bags

Tea is traditionally a leisure product. Therefore, many Chinese brands target middle age and elderly people, who have more leisure time. Most Chinese tea brands sell loose leaf tea, which can make people enjoy the process of brewing tea. Lipton mainly targets on white-collar workers in China and young adults in urban areas. The brand uses its tea bag as a competitive difference in China’s tea market, because it is convenient and safer. It also greatly simplified the steps of drinking tea in China.

Lipton is facing great challenges in China

According to the annual report of Unilever in 2019, Lipton’s profits decreased. The brand is facing many challenges in China. Lipton’s tea usually is very cheap, which means it must keep high sales to get enough revenue. Besides, most Chinese young adults (21-30 years old) crave creativity and novelty. Lipton is losing this huge consumer group.  Now, competition in China’s tea market is tighter and consumers preferences have changed. But Lipton has not innovated its package and products, it’s less exciting for Chinese consumers. More Chinese competitors are rising, they have better understanding of consumers, more creative package, and advanced marketing (such as KOLs in China).

Xiao Guan Tea (小罐茶)

Xiao Guan Tea is a high-end Chinese tea brand launched in 2014. It covers six categories: green tea, black tea, oolong tea, dark tea, white tea, and reprocessed tea. The brand targets young adults with strong consumption power and pursue the quality of life. By the end of November 2018, Xiao Guan Tea’s sales revenue reached 2 billion RMB in China’s market. It has around 650 offline shopsin the nation.

Data Source: Xiaoguantea.com, Sohu.com, Tea market in China report by daxue consulting. Online sales channels of Xiao Guan Tea

Positioning itself as a high-end brand

Xiao Guan Tea positions its products as high-end. The brand built its high-end image using well-designed packages and offline stores. It can create the distinct sense of modern luxury for consumers. Xiao Guan Tea uses aluminum cans and high-end gift box as packages, which make the tea healthy, and easy to conserve. Hence, Xiao Guan Tea products are now popular gifts during some Chinese holidays.

Xiao Guan Tea is upgrading its tea manufacturing by developing and using AI

In cooperation with IBM, they developed a robot that can scan and pick out the impurities of tea leaves. One robot can finish 50-60 human workers’ job every day. The technology can reduce labor expenses and improve processing efficiency. Xiao Guan Tea and Siemens launched a cooperation at the end of 2018 to build a new smart tea production facility in Huangshan (黄山). The factory will use AI technology in China to achieve the intelligence of the job-shop, optimizing the production process.

The impact of COVID-19

With the coronavirus outbreak in China, exporting became slower and more expensive. The epidemic also has complicated international logistics. Thus, China’s tea export progress is much slower and export costs increased. The main tea import countries strengthened their customs inspections and some countries reduced or stopped importing China’s tea. Offline retail channels had the biggest impact due to coronavirus in China. More than 60% of tea shops had no sales revenue during February 2020. Online orders for tea decreased and some products had delays in delivery because of the lack of employees in logistics. Therefore, online tea sales also declined.

Long-term impact

The economic impact of the coronavirus in China on tea distribution channels is temporary. The main impact on tea retails was mainly in February and March. The online and offline sales both will quickly recover when the epidemic is over.

Increased focus on health and social

After the COVID-19 outbreak, there is no doubt that everyone will pay more attention to personal health than before. Although tea leaves are not medicine, they are still health-related products, and have health benefits. The proper promotion of the knowledge about tea leaves will help facilitate everyone’s tea consumption. Chinese people’s enthusiasm for social networking is still growing, tea brands need put more emphasis on packaging and appearance design.

Because the COVID-19 outbreak, Chinese consumers have stronger health awareness. Many consumers choose to buy milk tea with little or no sugar. Fruit tea is also popular for due to having less added sugar and more health benefits. For milk tea brands, it’s essential to add the concept of health into their promotion and advertising.

Socializing is more and more important for today’s young people. Tea is not only a kind of drink, but also a sense of fashion and ceremony for them. Thus, milk tea shops now focus more on appearance. Therefore, if traditional tea brands want to increase sales, appearance is as important as quality and taste.

See our full report on the tea market in China

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Air Conditioner Market in China. Until recently, Chinese people bought cheap fans in the summer. After the beginning of the 21st century, a growing number of Chinese people could afford air conditioners to keep rooms cool and comfortable. In recent years, international air conditioner brands gradually lost their market share in China. However, they make more profits through converter technique as well as selling core components and parts. This big potential market gives more places for Chinese domestic brands to grow and expand.

Contact us for any question on the Chinese market

Chinese top 4 air conditioner brands：Midea(美的), Haier(海尔), Gree(格力) and Chigo(志高)

Midea(美的), Haier(海尔), Gree(格力) and Chigo(志高) are the top 4 Chinese domestic air conditioner producers. Among them, only Gree and Chigo are air conditioner companies, while Haier and Midea have a larger product offering. Gree(格力), founded in 1991 in Zhuhai(珠海), is now the biggest air conditioner producer in the world. It controls its own research development, production, sales and CRM(Customer Relationship Management). Gree air-conditioning is the only “World famous brand” in the air conditioner market in China. In 2013, Gree achieved 88.517 billion RMB as their annual income and generated 37.35% year-on-year growth. As a listed company, Gree appeared on American 《Fortune》 magazine for 8 years, as “Chinese Big 100 listed companies”. At the same time, its brand value is worth $13.708 billion, ranked No.51 in China. 2008 was a unique year for Gree as they gained more than 8.8 million users all over the world and was awarded in the list of “Chinese most competitive brands” for its brand image and brand vitality.

Distribution of Chinese domestic air conditioner brands

Midea drives their retail business through wholesale sales. Its wholesalers are responsible for the distribution in China. There might be several wholesalers in one area and Midea supplies products to them and they distribute the products to retailers. The price that retailers fix is determined by the manufacturer. The manufacturers take charge of sales promotion and asked their wholesalers for the list of their retailers. Retailers are responsible for installation and after-sale service. As a result, Midea’s method of distribution saves its marketing costs and utilize wholesalers’ capital. On the other hand, it may cause confusion of their unsteady distributions.

Famous international central air conditioner: Daikin(大金) and York international(约克)

Chinese companies have gained an advantage in home air conditioners. However, in the market for central air conditioners, a Japanese brand, Daikin, which was founded in Osaka in 1924 and the US brand, York International, which was founded in 1902 own a large market share not only in China but globally. Dakin is the best seller of central air conditioners in China and York International is the world’s largest air conditioner manufacturer.

The revenue for the air conditioner market in China in 2015 has reached a total of 89 billion dollars up to 5.7 compared to the previous year. 232 companies are actually running within this industry and during the past five years, the market has been developed steadily with revenue growing at an annualized rate of 9.6%. Therefore the investment from domestic and foreign enterprises hasn’t stopped increasing in recent years, the worldwide major manufacturers that have been settled in China are Fujitsu, LG, Samsung, Panasonic, and Fedders. The Guangdong province has a huge concentration of domestic and worldwide companies from this industry, generating 60.5% of the total industry revenue.

While the increase in mercury made pPurring air conditioners, the increase in access to the air conditioner in developing countries constitutes a bomb ticking for the planet. According to some scenarios, freshness warming–backed race could multiply by ten by the end of the century energy needs and an increase of 23 billion tons annual global emissions of greenhouse gasses.

Daxue Consulting China Market Research

Sources:

• China Daily
• Market Research
• Midea
• Picture Source: Air Conditioning

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Coca-Cola in China

Coca-Cola was the first American company to distribute its products in China after Deng Xiaoping(邓小平) implement his Reform and open strategy to foreign investors in 1978. Now the behemoth owned more than 20 bottling joint-ventures indirectly through 2 Hong Kong based corporations. The reason why Coca-Cola establish nationwide operations and generate a strong market presence is because it’s long-term strategies of localizing production and building up infrastructure through partnerships with Chinese government and domestic companies. In 2009 Coco-Cola meant to purchase the biggest domestic juice company Huiyuan(汇源), unfortunately it failed. Due to those distributions and branches, the company generate large quantities of working opportunities.

Pepsi in China, cooperation with Tingyi, known as Master Kong(康师傅)

PepsiCo Inc is putting more effort into marketing, research and development and food development in China after it swapped its holding in its bottling operation in China for a stake in a leading Chinese drink maker, Indra Nooyi, company CEO said. In recent years, Pepsi has taken such a lot of strategies on advertising. At the end of March this year, PepsiCo and Tingyi announced the formation of a strategic alliance in China. As a result, in the agreement, PepsiCo is to retain control of the marketing and branding in the beverage business while Tingyi is to supervise manufacture, sales and distributions in China. Tingyi, known as Master Kong(康师傅) in China will help PepsiCo better position itself in Chinese market and take the advantage in competition with Coca-Cola Co.

Chinese domestic coke brand-Feichang Coke(非常可乐)

Feichang Coke (非常可乐) position itself as Chinese people’s own coke is owned by Wahaha (娃哈哈) company, the famous Chinese soft drink corporation. Feichang Coke was came out to the market after Wahaha’s comprehensive market research and ingredients were mixed based on Chinese people’s taste. Though it’s also a carbonated drink, Feichang is more tasty and becomes a symbol of happy life in China. Founded in 1998, Feichang Coke helped Wahaha to expand its market and build up its reputation image. Nowadays, Coca-Cola, PepsiCo and Feichang together form a situation of tripartite confrontation in the market.

Other links:

• Daxue China Consulting

This article Coke market in China is the first one to appear on Daxue Consulting - Market Research China.

Famous international printer brands in China: Epson

Epson is a Japanese electronics company and one of the world’s largest manufacturers of computer printers, information and imaging related equipment. Headquartered in Suwa, Nagano, Japan, the company has numerous subsidiaries worldwide and manufactures inkjet, dot matrix printers, laser printers, scanners, desktop computers, business, multimedia projectors, home theatre projectors, large home theatre televisions, robots, industrial automation equipment, point of sale docket printers, cash registers, laptops, integrated circuits, LCD components and other associated electronic components. It is one of three core companies of the Seiko Group, a name traditionally known for manufacturing Seiko timepieces.

Chinese laser printer market reaches about $5 billion in 2010

Although the overall global printer manufacturing industry is struggling to overcome competition from electronic media, there is still a large growing market in China. According to market research in China, the digital imaging authority revenue from the Chinese laser printer market, including hardware, toner cartridges, and paper, reached about $5 billion in 2010. As the largest developing country, China represents an attractive revenue opportunity for major printer vendors. The researcher’s China Market Advisory Service forecasts that strong growth in China’s printer industry. It also states that Chinese business users prefer laser devices to ink jet devices for mainstream business printing. Although there is a big market opportunity for printer manufacturers in China, companies must keep in mind that the printer industry in China will likely decline in the future as electronic media becomes more widespread. Due to developing technologies, such as 3D printing, and the development of broadband and internet infrastructure in China, printer companies must look to innovate or they will likely struggle in the future.

Sources:

• Article on Book Market
• SMCP
• Analysis on the market
• PPT on the market of printers
• China Consulting Services

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2009-2012 was a critical period for the development of the Chinese earphone & headphone industry. It was also the transitional period for China stepping from the “11th Five-Year Plan” to the “12th Five-Year Plan”. With the ongoing global financial turmoil and the severe domestic economic situation, a series of new policies were introduced that played a significant impact on the development of the earphone & headphone industry. A number of major national construction projects have started to be constructed that are bound to play an important role in driving the demand of the earphone & headphone market.

Wen Jiabao, Premier of the People’s Republic of China, hosted an executive meeting of the State Council in Nov. 5th, 2008 to discuss the strategy of further expanding domestic demand and promoting a stable and rapid economic growth. The Council areed to 10 measures to further expanding domestic demand and promoting economic growth. These 10 measures were estimated to be a 4 trillion RMB investment.

Famous international headphone brands：Sennheiser and AKG
Sennheiser electronic GmbH& Co. KG is a private German audio company specializing in the design and production of a wide range of consumer and high fidelity products, including microphones, headphones, phone accessories and avionics headsets for consumer, professional and business applications. Founded as Labor W and family-owned since 1945, Sennheiser has 2100 employees, 60% of who live in Germany. Major subsidiaries of the company are Georg Neumann, who built studio microphones and Klein Hummel, a producer of high-quality studio monitors.

AKG is an American owned manufacturer of microphones, headphones, wireless audio systems and related accessories for professional and consumer markets. The company operates in Austria, and was founded in Vienna in 1947. AKG also manufactures a line of high-specification headphones. The K-50 model, introduced in 1959 was the world’s first pair of supra-aural and open-back headphones. The K-1000 was the flagship model, but the company no longer produces it. It was an open back dynamic headphone.

Sources:

• Yamaha
• ICE
• Finance Yahoo
• China daily
• China Research

Picture Source: China Headphones

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Chinese domestic kid’s clothes brands：Goodbaby (好孩子) and Beler (贝蕾尔)
Beler is one of the top 10 children’s clothes brands in China. In terms of quality control, they handle production, marketing and sales all by themselves, and track all processes from production to sales. Beler emphasizes each child’s health and promotes its production to the market with discounts for its customers. Goodbaby (好孩子) is a kids’ products company based in Kunshan (昆山), Jiangsu Province (江苏) in 1989. And it’s the largest company focusing on design, manufacture and sales in this industry. It produces prams, children bicycles, children’s clothes and disposable diapers.

International children’s clothes brands in China
There are many international brands rushing to China, at the same time, they bring their children clothes brand here as well. These include sportswear companies such as Adidas, Nike, Puma and Umbro and fashionable brands such as Zara and H&M. These corporations realize the immense potential of the Chinese market and our purchasing capacity as well. They build factories in China and create more job opportunities for people in rural areas. However, they also generate great pressure to local children’s clothes companies.

Fierce competition in Children’s clothes companies
Zara opened its first store for children’s clothes in 2006 in Shanghai, luxury brands Gucci, SA, and Dior have opened children’s clothing sections in the country and casual or sportswear retailers including H&M and Adidas have set up divisions aimed at youngsters. In addition to the flourishing brands, more international companies have been seeking cooperation in the emerging industry. Goodbaby Group, China’s top manufacturer and retailer of baby care products, announced this year an online retail partnership with the US sportswear giant Nike Inc. Under the agreement, Goodbaby will have exclusive authorization to sell Nike’s children’s wear through its website, haohaizi.com. One of the most reputable babywear brands in China, China Yeehoo Group Ltd, announced earlier this year that Lunar Capital Management and its affiliates have completed the acquisition of a majority controlling stake in the company.

Daxue Market Reserch in China

Sources:

• French Website
• Sina
• Baidu Baike
• Pdf report on Clothes in China

This article Market research: Clothes for children in China is the first one to appear on Daxue Consulting - Market Research China.

Big companies expand their market in China

Earlier this week, Kimberly-Clark, Dallas, TX, announced construction had started on its new diaper manufacturing base in the Jiangning (江宁) Development Zone, according to China Sourcing News. The company will reportedly invest more than $100 million in this new manufacturing base and product development center, integrating product manufacturing, quality control, product innovation, engineering project management and logistics management. Meanwhile, K-C’s rival, Procter & Gamble, the maker of Pampers and Luvs diapers, has started stage one of a three-stage investment operation in Luogang, Gaungzhou (广州) that will ultimately become one of the largest manufacturing sites in Asia. The first stage of the plant will reportedly make a number of consumer goods including Pampers. The initiative is part of the company’s goal of investing as much as $1 billion in China by 2015. The plant is expected to add as much as $490 million of production value to the company each year. Also investing in the Chinese diaper market’s future growth is Japan’s Pigeon Corporation. In early March, the company voted to increase investment in its Changzhou-based Chinese operation, which was completed in late 2011. According to company documents, this plant currently produces breast pads, baby wipes and other baby items, and the new investment will add baby diaper production to this operation. When construction is complete, which is forecasted for 2013, the plant production capacity will be about 85 million diapers per year. Pigeon also operates a manufacturing site in Shanghai.

International diaper brands in China: pampers

Pampers is a brand of baby products marketed by Procter & Gamble. Pampers was at one time only used as a name for a disposable diaper. The company markets in various ways including print ads and television commercials. Pampers also produces baby-wipes. In addition to these products, they sell a training pants line called “Easy Ups”. There is also as line of disposable swimwear sold under the brand name Splashers (or Sunnies in Europe). In addition, Pampers produces bed wetting products named Underjams for children weighing up to 85 pounds (about 39 kilograms).

Imported disposable diaper: Kao

Kao began as a domestic toiletry soap manufacturing company in 1887 by Tomiro Nagase. Until 1940, the company was known as Nihon Yuki Company, then it changed its name to Kao Soap Company, and finally in 1985 to Kao Corporation. During the 1980s, its hit products Merries diapers, Attack detergent, Biore daily skincare, Biore U daily body care, Curel (1986) and Sofina cosmetics were launched. During this time, Kao engaged in several joint ventures and acquisitions in North America and Europe. During this period, Kao also expanded the manufacture of floppy disks.

Sources:

• China Market Research
• Yahoo Finance
• Kao
• Pampers China

Picture: Pampers China

This article China market research: Diapers in China is the first one to appear on Daxue Consulting - Market Research China.

Status of the market

As one of the most important ceremonies for Chinese, weddings have created a big market for wine, tourism and other celebratory goods. Weddings have also increased the market’s demand for candy. According to Ministry of Civil Affairs, there are over 13.02 million couples married in 2011. If each couple spends only 80 USD (the average expense on wedding candy in 2006) on wedding candies, it would support a 104 million-USD wedding candy market. In fact, on average, couples from Shanghai (上海), Zhejiang (浙江), Fujian(福建) spend over $160 on candies for their wedding. In addition, the wedding candies are also used for other ceremonies for other festivals, or even completion of a house.

Characters of the market

Wedding candies tend to sell best in July, August and September. In these three months, other types of candies will experience a dip in sales. The research on Chinese wedding candies from 2010-2013 also shows that the best selling point of wedding candies for Chinese consumers is its image, not the quality or flavor. Most people only purchase wedding candies once over the course of their lives, but tend to spend a lot per purchase as a result. Most top brand wedding candies are from European countries such as France, Belgium and Italy. For example, chain stores put chocolate from France, Belgium and Italy on their best positions.

Price of wedding candies

In China, wedding candies are usually given away to guests during the banquets. Most people try to choose famous brands that most people would recognize. In Chinese culture, it is considered shameful to offer guests low quality wedding candies. As introduced by Wuhan Shangri-La, most people feel ashamed to buy gifts with low prices, but often still cannot afford them. As a result, sellers generally tend to offer discounts which greatly increases the chance of these candies to be purchased.

Special design of wedding candies

Candy-makers have successfully adapted their products to the propitious atmosphere of Chinese weddings, the most important factor of a Chinese wedding. Everything in the wedding is designed and prepared around this keyword. And package is the best way to help candy spread this message. According to the survey done by “Feng’xiang Jewery” and “Ju’xi’fang”, young Chinese are putting more care into choosing wedding candies to show their individuality via the design of the candies.

Sources:

• China Market Research
• China Daily
• Forbes
• Hoovers

Picture: Chinese Wedding Candy

This article China market research: Wedding candies is the first one to appear on Daxue Consulting - Market Research China.

Top 10 maternity clothes

Annee Matthew
Offerings include maternity clothes that are comfortable and functional without compromising on style. Clothes feature clean and simple lines, using natural fabrics that are meant to last after continuous washes and multiple babies. The latest arrivals feature bamboo fabric clothes, which are meant to be comfortable and breathable.

Cooz Maternity
Cooz Maternity is an online wholesale store. Their clothes are made in Hong Kong, Taiwan, China and Korea. Featuring mostly Korean-style designs, the clothes are feminine and demure. Look out for maternity bubble dresses that are sure to be a hit with pregnant fashionistas – available in trendy blues, plums and khakis instead of the usual black. Other designs include sleeveless maternity tops with large beading on necklines, and maternity capris complete with stretchable belly covers.

EGG Maternity
Expect to find comfy yet stylish maternity wear that is perfect for everyday wear when pregnant, as well as ensembles that work both in the office or at a party. The line has now grown to include comfortable nursing apparel and gorgeous lingerie.

Maternity Exchange
Mums-to-be rent or buy from the store. Maternity Exchange stocks designer labels from all over including homegrown labels Mothers En Vogue and Pupsik (for baby accessories), and international labels such as Jules & Jim Maternity. The idea behind offering maternity wear rentals is to give expectant mums the flexibility to change their wardrobe as their body changes. Items available in-store include assorted gifts for mums and parents-to-be, baby slings, nursing lingerie, swimwear and post-partum shapewear.

Mothers En Vogue
Mothers En Vogue’s (MEV) clothes are made from natural fibers, such as cotton and bamboo, and environmentally friendly alternatives that are grown without harmful chemicals. Apart from an extensive range of nursing apparel, they also carry a line called X.tended, that can be worn from pregnancy to nursing. The clothes are chic, stylish and feminine, and offer discreet access for nursing on-the-go.

Motherswork’s Big Is Beautiful
Motherswork’s Big Is Beautiful offers multi-label designer wear for expectant mummies and also caters to mothers after their pregnancies. In addition, the company sells quality plus-size maternity clothes that are stylish and unique. They also carry designer maternity jeans from Rock & Republic, Paige and Maternal America, and dresses from Australian label, Szabo.

Mummy’s Secret
If you are into girly Japanese fashion, Mummy’s Secret is the online maternity store for you. Featured on this site are plenty of girly kawaii (cute) maternity outfits, from whimsical empire dresses in bright colours, and with bows, to knee-length overalls with big buttons. Mummy’s Secret also stocks nursing wear and lingerie, with sleep bras starting at just $9.90.

New Maternity
New Maternity offers fashionable, functional and comfortable clothing made from quality fabrics. They stock maternity basics like tunics, stretchy pants and tube dresses in simple colours that make it easy to mix and match. Shopping can be done both at the store at IMM and online. Apart from maternity clothing, New Maternity also stocks lingerie, nursing and swimming apparel, as well as selected shoes and clothes for babies.

Spring Maternity & Baby
Spring Maternity has arguably the widest range of maternity, nursing and baby products available. Pretty tube tops and shirts in unique prints, trendy capris in cotton and denim, as well as slinky wraparound dresses for the pregnant mum. Look out for the ‘Sale’ and ‘2 for $49.90’ tabs on their website to score bargain deals. Regular updates on sales and promotions are posted on their Facebook page. You will also find a variety of nursing and baby accessories, from stylish nursing shawls to breast pumps, strollers, cots and car seats.

Ubermums

With a tagline like ‘Expect in Style’, you can already figure out what to ‘expect’ from this online maternity and nursing store. Ubermums carries a mix of their own designs and overseas labels, featuring everything from chic office wear (that don’t look like maternity wear at all), to bra extenders (to accommodate your expanding bustline), belly sashes (to support that growing belly) and even diaper bags. Prices are reasonable and you can purchase chic office blouses for under $40.

Sources:

• China Market
• The Beijinger
• Bloomberg

This article Market research: Maternity clothes in China is the first one to appear on Daxue Consulting - Market Research China.