The market for yogurt in China is growing at a rapid rate. Studies show that the number of consumers in China has increased by 11% since 2015, and will continue to grow with an average annual growth rate of 4-5%. There is no better time to get involved in this booming industry than now. To do so, here are some data to understand this market as well as some important tips on how you can sell your product and promote your yogurt company’s presence in China.
China Yogurt Market Overview
In 2021, the yogurt segment revenue in China reaches US$38,898 million with an expected 5.56% annual growth rate from 2021 to 2025. Also, the average consumption per person is predicted to be 7.0kg. Foreign brands and new products have potentials in China. Meet Chinese needs and tendencies is the core of product development. Marketing can help small brands stand out from three local leading brands. In this article, we will lead you to discover marketing strategies adapted from some large and small enterprises, and help you understand the purchase consideration of Chinese consumers and few export regulations.
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China, when doing a worldwide comparison, is the country with the most generated revenue for Yogurt Market in 2021. This is simply explained by the sheer size of the population and the growing middle class. The yogurt industry in China is not mature yet, and still has a lot of room for growth.
Yogurt Category Preference in China
Factors that attract Chinese customers to procure yogurt over milk are the believed benefit of digestion from probiotics and better immunity, rich in nutrition, and good taste. Due to lactose intolerance from some Chinese, they purchase yogurt more than milk.
Nutrition, strengthen the immune system, children and the elderly are the main considerations for the family. Young white-collar workers consider one-time consumption and few bottles for each purchase. Diverse flavors and convenient packages are not the main priority when Chinese customers purchase yogurt. Only one-third of customers take these into consideration.
According to AC Nielsen, room-temperature yogurt has a high market concentration rate and fewer products enter this category. This category is dominated by three leading brands: Yili(49%), Mengniu Dairy(25%), and Bright Dairy(17%). They even designed specific gift box options. Moreover, low-temperature yogurt has a 65% concentration rate in 2019 giving more space for new brand entry and nearly half of the market share is composed by others.
- Imported brand preference
Nearly half of the Chinese assume the domestic milk origin is not reliable compared to one-third of believers. Thus, about half of them prefer imported dairy products. 32% of whom purchasing domestic products shows their preference for imported foreign dairy products. About 60% of them like brands from nationwide large enterprises.
Chinese Consumers Considerations When Buying Yogurt
Clean-labeled, less artificial ingredients and more natural composition bring more trust and reliability when choosing yogurt products. Showcasing the origins of milk brings transparency which works well in Lepur’s case. Clear and natural ingredients will be the choices for customers to pay attention to healthy diet and fitness.
Yogurt in China: Innovations & Trends
- Healthy, functional, premium ingredients
Young people are becoming the main consumer group and are willing to pay more for luxury dairy with new ingredients and tastes.
Protein-rich yogurt with low sugar is becoming one of the favored energy supplements and snacks for fitness. For instance, Thai brand, Dutch Mil, launched two lines of protein yogurt in the market.
Outside of the bodybuilding consumer group, nutrition for other groups such as women’s health and calcium-rich products for children’s growth has also been showing signs of growth, especially when looking at brands selling in China are doing. For instance:
- Jian’ai launched a sugar-free yogurt to appeal to this population segment.
- Another example would be Bright Dairy which upgraded its B+100 yogurt;
- The brand, Mengniu added extra nutrition by launching BB-12 functional yogurt with a convenient TT package.
In short, customers are looking for healthy products that can answer nutritional needs and brands are quick to answer the demands.
- Meal replacement
Yogurt/granola/Acai bowls are now pretty mainstream in China’s tiers one cities. Fruits and nuts are added to yogurts. Franchises and restaurants offering this type of product targetting the fitness and health crowd have been popping up in the country. Nuts are one of the most popular snacks in China as well.
Non-dairy vegan yogurt provides lactose-intolerant Chinese choices to enjoy yogurt. Even in the milk category, the plant-based milk market grows fast in China.
Nongfu Spring launched the leading plant-based yogurt in 2019. Since then, Vitasoy, Yangyuan, and Dali Food release soy-based and walnut-based yogurts. Also, Marvelous Foods launches their Yeyo coconut yogurt with zero added sugar and artificial flavors on Tmall. Yeyo dairy-free yogurt achieved number 4 on Tmall’s “fastest-growing chilled dairy products” list for 3 weeks.
- Yogurt Drink
We are witnessing a rise in Yogurt Drinks in China, with an expecting doubling revenue from 2014 to 2025. . This can be explained by a change in consumption habits. Consumers are switching from sugary drinks to more healthy yogurts drinks.
These yogurt drinks are promoted as a healthy alternative to soda, goods for guts. For instance, we observe a preference for probiotics yogurts (especially when it comes to kids and infants snacks). As of 2015, 50+% of yogurt consumers in China were choosing probiotics yogurt (read more here)
Drinking yogurt is also a trend you can observe while walking in Chinese street with taking away. For many Chinese people, yogurt is consumed in a way that allows them to eat it on the street.
How to export yogurt to China
After confirming China accept your export based on the country of manufacturing, there are a few points you will need to pay attention to. On top of the regulation of exporting food to China, there is another specific regulation for dairy products.
For the quality controls and inspections, there is an institution called AQSIQ (Administration of Quality Supervision, Inspection, and Quarantine) in China collaborate operation with national CQI(China Inspection and Quarantine Services) and sign an agreement with the FDA for the US exporters. CIQ will issue a quarantine test report to enable you to sell products to China.
- Sanitary Certificate
- Manufacture: register online and sign a protocol in charge by AQSIQ related to dairy products (food & drinks)
- Importer & Exporter: Registration with Chinese Customs
- H5 Codes (04.03.10 for yogurt)
- Chinese label of Products
After receiving the certification and registration process, choose your distribution as followed.
- Selling on Tmall Global, JD Worldwide & other platforms
- Finding retailers and distributors for selling in supermarkets, convenience stores, or other channels
In China, convenience stores have higher penetration compared to supermarkets. Also, as the daily consumption factor, Chinese customers tend to procure it with convenience. Nearly half of the yogurt market share was credited to convenience stores in 2020, and online retail channels gain their opportunities as well.
How did local key players do their marketing in China
- TV Show Placement and Free Tasting Campaign
One of the three leading Chinese yogurt brands, Yili’s Ambrosia, did their successful placement marketing on famous TV shows Go Fridge and The Voice China first. These two TV shows invite top and famous celebrities and artists and host by famous celebrities which bring huge visibility for the brand’s marketing placement. After building a successful reputation and brand awareness, Ambrosia launches a national free tasting campaign in cities. Yili’s 每益添 and another brand Gemice (yogurt ice cream) adapted this placement strategy as well.
- Endorsement with local celebrity
Two of the hosts of a famous TV show, Running Man, are the endorser of the brand Ambrosia which not only bring benefits from the endorser but also the reputation and visibility of this TV show. During the campaign, Ambrosia’s Weibo page reached 15675 visits in a day, the Baidu index increased from 1500 to 7000, and the hashtag search achieved 11,000,000 views. Ambrosia even creates a hashtag relates to the Running Man show: #奔跑吧安慕希. Two other leading brands such as Bright Dairy and Mengniuir all collaborate with popular Chinese celebrities.
- E-reputation and giveaway
Lepur goes virals with their famous online article attracting 10w+ clicks in 2015. They used storytelling to deliver a transparent formula plus the process of producing and invite viewers to engage in price setting for the pre-order. Their articles were shared by some celebrities and KOLs. There is another sharing on WeChat Moment achieved 100000+ shares in 24 hours– a free box of yogurt gives away shared by QR code online. In 2017, they reached over a billion sales per month.
E-reputation brings huge visibility at first, it is their differentiation strategy on a niche and potential market that let them keep those people. Firstly, they focus on clean and natural ingredients without sugar, cream, and formula powder. Secondly, they focus on nutrition which provides three times milk and probiotics. The freshness and density are their selling points. Later, they launch low-fate yogurt targetting customers with high awareness of health and fitness, and a niche and successful new flavor– Durian yogurt. In 2020, they are on the 100 top best sellers on the Tmall V list.
- Social media- Weibo
Not only seen from the previous Lepus case, Yili’s brand 每益添 have Chinese famous celebrities endorsement and Go Fridge TV show placement but also have their own Weibo page linked with their Taobao store. On their own Weibo official page, they engage with customers and link with products purchase page in posts.
- WeChat Mini Program and WeChat Ads
WeChat has over 1.2 million users and highly active users in its mini program. By the end of 2019, WeChat has over 1 million mini-programs across 200 industries. On average, consumers use the mini-program four times per day, and 72% of WeChat users use it. It provides a wide range of marketing options such as group buying, live streams, games, and social sharing to friends and moments.
In 2020, 54% of eCommerce customers purchase snacks and nuts. Group buying, live stream, discounts are all the marketing campaigns you can do on eCommerce. You can choose to sell your products on eCommerce such as Tmall Global, JD Worldwide, or Pinduoduo. However, in two massive markets: Tmall has more reputation on clothes, cosmetics, and F&B; JD has more electronic devices reputation.
On eCommerce, you can have your own-operated flagship store such as what Yili did on their flagship store providing discount coupons for products, membership discounts, and all series products display on their own commerce page.
On Tmall, there is Tmall Global and an Imported food section on Tmall Super Market for foreign brands selling products. In the Imported food section on Tmall Super Market, there is a specific section for imported dairy products and imported yogurt among this section.
Selling Yogurt in China: Conclusion
To compete in the yogurt market in China, define your product strength in targeting customers’ needs is important for the long run. For small brands, interesting marketing and campaign can bring you visibility and people who are curious about new products. Customers believe in large and imported enterprises; however, there are still spaces for other products. Trust in origins, functions, and innovation might have chances to make your products stand out from existing products. Then, choose your digital presence on social media Weibo, WeChat, or eCommerce to strengthen your brand image and sell your products.
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