The influence of the decline of birth rate on the competition of milk powder and the market analysis of milk powder industry.

According to the birth rate calculated this year, the domestic infant milk powder market has ushered in new changes, and the sales gap between domestic and foreign milk powder brands is gradually narrowing. What's going on? Let's take a look at it.

One year after the implementation of the so-called "strictest new policy on milk powder in history", the speed of examination and approval of formula registration dropped significantly. According to statistics, there are 255 new formula series in China in 2018, and it is estimated that more than 500 formulations are still under examination and approval in the industry. the tightening of the formula registration system is generally interpreted to boost national brands.

However, in terms of sales, foreign investment is still dominant at present. On February 21, dairy expert Song Liang pointed out in an interview with the 21st Century Economic report that the domestic infant milk powder market is about 110 billion yuan, of which foreign investment accounts for about 60%, while domestic milk powder accounts for 40%.

Song Liang believes that the impact of the decline in the birth rate on the industry will be highlighted this year, milk powder brand competition is further intense, major enterprises are working in the direction of high-end differentiation, the market does not rule out the possibility of a price war again.

Increased competition:

The number of babies born in China last year was 15.23 million, down 2 million from 2017, and the birth rate was 10.94 per thousand, down 11.99 per cent from a year earlier, according to the National Bureau of Statistics. Given the decline in the number of births, sales of infant formula are expected to be basically flat this year, while sales will fall by 2% by 2020, according to Gaohua Securities.

"most babies usually start with the second stage of milk powder, because breastfeeding is usually six months, sometimes one year, so children born in 2018 have a greater impact on milk powder sales in 2019. In Song Liang's view, the decline in the birth rate last year is not an exception. He judged that the number of newborns in China will continue to decline in the future, which will have a certain impact on the overall demand of the domestic infant milk powder market.

"the disappearance of the demographic dividend and the intensification of competition in the industry are a huge challenge for any domestic dairy enterprise. Zhu Danpeng, a researcher in the food and beverage industry at the China Brand Research Institute, pointed out.

In fact, the registration system of infant milk powder implemented last year has eliminated a large number of small and medium-sized brands. Under the dual influence of the declining birth rate and the continuous promotion of the new policy of the dairy industry, Song Liang believes that the competition in the milk powder market this year will mainly focus on "circle" dealers, high-end markets, marketing means and formula upgrading.

"since last year, people have been robbing dealers like crazy, and this will continue in 2019. Secondly, the whole market will intensify competition, do not rule out that high-end products will also have some unpredictable results, such as price war. Third, from the whole marketing point of view, everyone is you learn from me, I learn from you, but large enterprises will gradually wash off some small brands through marketing and marketing means. "Song Liang said.

The industry predicts that 2019 is expected to be the year with the largest number of formula registrations and upgrades if formula registration changes are implemented this year. "everyone is looking for product differentiation, because now the homogenization of high-end products is very serious, so we have to play the differentiation card, and the recent formula upgrade will be a big hit. "Song Liang judged.

Adrian Hennah, chief financial officer of Reckitt, pointed out at the results meeting that although the number of new people in China decreased last year compared with the previous year, this impact was offset by the high-end trend of the milk powder market. "China has some very strong growth points. Gaohua Securities pointed out that in 2018, the share of high-end infant formula in the overall market reached 23%, with a growth rate higher than that of other sub-categories. High-end consumption and product structure upgrading will be an important force to promote the growth of the milk powder industry in the future.

Fierce market strangulation is imminent, the industry expects this year's domestic milk powder market will usher in greater integration. Song Liang told reporters that the market concentration of the top 12 milk powder companies reached 70% last year, and the figure is expected to reach 80% this year.