The Yoghurt Market in China is booming over the years because Chinese consumers love yoghurts. The demand is growing more and more and the domestic market can’t produce enough yoghurts to answer this demand.
The Yoghurt market in China
The dairy industry is very popular in China because it’s easy to do a very good profit margin. The three main Chinese companies in the Yoghurt market are Yili, Mengniu & Bright Dairy. Last year, these three companies had try to increase their production of yoghurt to reduce the lack of production compared to the demand. But for now, it’s not really sufficient.
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The yoghurt market like in other countries is not an easy market. A lot of competitors are present such as foreign competitors, regional competitors (also very appreciated) and also the substitution products. You have to be strong if you really want to get rid of the game. In addition, the milk scandals had also weakened the yoghurt market. Trust is becoming a mandatory criterion in the yoghurt market in China.
75% of domestic demand
It’s an amazing fact because yoghurts are not a part of Chinese diet habits compared to western diet habits. But the demand grows more and more. The domestic dairy market is only able to cover the domestic demand for yoghurts by 75%. The demand is growing faster than the domestic production and supply.
You understand that the yoghurt market is a lucrative market for foreign brands. You need to understand some things before developing your marketing strategy in China if you don’t want to fail.
Understand the Chinese consumer
Chinese consumers are very different from your domestic consumers. They don’t have the same culture, traditions and habits. You need to understand the Chinese consumers to develop a strategy that will match their needs and desires.
China is changing, the wealth is increasing, they have access to the information easier than before and that change their habits and lifestyle. They want more and more quality products because they have more money. Certain health awareness and food awareness is born. They know that some products are not good for their health and prefer buy less but buy a better quality even if it’s more expensive.
The development of tourism is also an explication of the growth of yoghurt demand, the Chinese lifestyle is westernising. They travel more and that’s why yoghurt is becoming a part of their life. They test some yoghurts abroad and want to buy the same yoghurt in their country for few reasons: as a memory of this fun trip, to keep a part of western lifestyle, to show that to their friends and be a precursor of this new way of consumption in their circles of friends.
It could be easy for foreign yoghurt brands to develop their business in China because you don’t need to convince your consumers to love you, they already love you. But, trust is really important in China. Due to all the milk scandals, they are very suspicious and they will only buy products that have a good reputation. You need to develop a good brand image and be transparent with your Chinese consumers if you want to increase your yoghurt business in China.
The Yoghurt market in China, a lucrative market who suffers from the lack of foreign brands
To answer to the growing demand they need to import yoghurts. The importation of yoghurts constitutes 20% of the yoghurt market in China. On average, 15,237 tonnes of yoghurts are imported each year. In 2015, the figure for yoghurts importation was only 10,274 tonnes of yoghurts. This represents an increase of 104% of the yoghurts importation in China. There is clearly a niche for foreign yoghurt brands.
Yes, in fact, foreign brands miss their chance in China. Only some big brands have understood that the yoghurt market in China is a very good opportunity.
China has a need. They need more yoghurts to respond to the increase in demand. Chinese consumers love foreign brands. So foreign yoghurts will be very appreciated. The growth of the Chinese middle class also allows you to develop premium brands. You really can focus your market on this premium field. Because Chinese consumers think that foreign products are better in quality than local products. That’s why they will not be impressed with the price of your premium yoghurt brand.
You can also focus your business on healthy yoghurts. It’s one of the changes that appeared these few years. Chinese people now take care of their health. The increase in income at the beginning created a new issue: obesity. They had more money so they consumed more and obesity is becoming a very important health issue. Now, they want to reduce this problem by buying more healthy products such as yoghurts.
What can we do for you?
You understand now that the yoghurt market is a market in expansion. If you are a foreign yoghurt brand, it’s your chance to take a part in this cake. You need to answer to the Chinese hunger for yoghurts and especially for foreign yoghurts.
China is a digital country, be present on their social media platforms, use their communication mediums and you will quickly gain invisibility. You can also work with a marketing agency, they will help you to develop the best strategy to overcome your competitors in the yoghurt market in China.
GMA, an agency based in Shanghai, is composed of experts in the Chinese market. We understand Chinese consumers and their complexity. It’s the key to selling in China.
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