In December 2022, Abbott told the market it would wind down its infant and child nutrition business on the Chinese mainland within a year. Brands like Eleva, Similac and PediaSure would stop being made and sold in China. Abbott’s public line was that it wanted to focus on its “growing adult nutrition business.” That is true, but it is not the whole story.
Abbott’s market share in Chinese formula had already slid from 4.9% in 2019 to 3.6% in 2021, then to roughly 3.1% in 2022, according to Chinese trade press coverage of the exit. That is not a company being pushed out by one bad quarter. That is years of erosion, ending in a quiet retreat.
What actually happened
Three things converged on Abbott at once, and the timing was brutal.
First, a global safety scandal. In February 2022, Abbott recalled Similac, Alimentum and Elecare formula made at its Sturgis, Michigan plant after cronobacter contamination was linked to infant deaths in the United States. China’s customs authority flagged the same batch concerns to consumers here. For a category where trust is the entire product, a foreign recall lands harder than almost any other kind of bad news.
Second, regulation. China’s “new national standard” for infant formula, tightening the permitted ranges for nearly every core nutrient, was issued in March 2021 and took full effect in 2023. Every formula sold in China has to be re-registered under this system, brand by brand, recipe by recipe. Chinese reporting on the Abbott exit notes that its flagship organic line, 菁挚 (Eleva), never obtained the new registration. Re-certifying a premium organic SKU for one market, against a shrinking user base, was not worth the cost.
Third, the market itself got smaller and more competitive at the same time. China recorded about 9.02 million births in 2023, a historic low, before a modest rebound to roughly 9.54 million in 2024 on the back of a “dragon year” and pent-up marriages. Fewer babies means fewer buyers of formula, full stop. Into that shrinking pool stepped domestic champions who had spent a decade rebuilding trust after the 2008 melamine scandal. China Feihe now holds close to 19% of the market by some 2025 estimates and has been the top-selling infant formula brand in China for seven straight years, with premium and ultra-premium lines now over 60% of its revenue.
Put those three together and Abbott’s exit stops looking like a strange one-off. It looks close to inevitable.
What the exit does not mean
It is tempting to read “Abbott leaves China” as “foreign baby brands are finished in China.” That reading is wrong, and it is worth saying plainly.
Foreign brands with sharper positioning did not exit. A2 Milk, Nestlé’s illuma and Danone’s Aptamil lines are still competing hard, some of them gaining share in the ultra-premium tier where Chinese parents are still willing to pay more for a story of origin, science or purity. What sank Abbott was not being foreign. It was being generalist, mid-tier and slow on paperwork in a category where all three are now fatal.
Abbott is also a US healthcare conglomerate with dozens of other divisions. Pulling out of one loss-making China unit is a rounding error on its balance sheet and a rational capital decision, not a verdict on China as a market. A single-category challenger brand does not have that luxury, and should not draw the same conclusion from a very different set of incentives.
What smaller foreign brands should actually do
Treat registration as a go/no-go gate, not paperwork. The formula registration system (配方注册) rejects or delays products that do not fit its nutrient bands exactly. Get regulatory counsel involved before you commit marketing budget, not after.
Pick a lane and defend it. Abbott tried to hold a broad, mid-market position against Feihe, Yili and Junlebao on volume, and against premium imports on prestige. It held neither. A smaller brand should own a specific claim, goat milk, organic, a clinical formulation, an age stage, and build proof around that one thing rather than spreading thin.
Build the trust signals domestic brands already have. Feihe’s rise was not luck. It came from years of factory visits, farm-to-can traceability content, and a saturated presence on the platforms where Chinese parents actually research purchases. A foreign brand entering the category through a well-run Tmall flagship store can replicate parts of that playbook faster than a decade-long offline build, provided the content and reviews back up the claims.
Watch the birth curve, not the headline. The 2024 rebound in births was real but modest, and largely a calendar effect from the dragon year and delayed weddings. Plan around a smaller, pickier buyer base for the next several years, not a return to the volumes of the 2010s.
Do not wait to localise.
Brands that treat China as an export market for a formula designed elsewhere keep losing to brands built for the Chinese parent from the first can. Understanding how to structure that entry, including the mechanics of selling through Tmall Global versus a domestic flagship, changes which regulatory path applies and how fast a brand can actually launch.
The real lesson
Abbott did not lose China because China turned against foreign formula. It lost because the market matured faster than its China strategy did. Regulation got stricter, domestic rivals got better at exactly the things multinationals used to win on, trust and channel, and Abbott kept running a playbook built for an earlier, less demanding market.
That is a fixable mistake for a brand that is paying attention. It is a fatal one for a brand that assumes its global reputation will do the work that local execution used to do.
Sources: Caixin Global, “Abbott to Exit Mainland Chinese Baby Formula Market by 2023”; Global Times, “US firm Abbott to halt baby formula business in China amid fierce competition”; The Paper (澎湃新闻), “雅培一年内逐步停止中国大陆婴幼儿奶粉业务运营”; Sina Finance, “飞鹤2025年营收181.1亿元 婴配粉连续七年中国销量第一”; Eastmoney, “2024年我国出生人口954万人比上年增52万”
Harry Huang is the founder of Ecommerce China Agency (EAC), an independent agency helping foreign brands sell in China. Before founding EAC, he worked on digital and ecommerce projects at Volkswagen China, where he saw first-hand how much slower multinational approval chains move compared to domestic competitors reacting to the same regulatory change in weeks rather than quarters. At EAC, one thing he tells every brand entering a regulated category, formula, supplements, medical devices, cosmetics with active ingredients, is to budget for registration timelines before budgeting for marketing, because a beautiful campaign launched behind an unapproved product licence is money burned. If you are weighing whether China’s baby and infant category still has room for a foreign brand, or want a straight answer either way, get in touch with our team.
