Core Insights - The luxury goods industry is undergoing a significant adjustment, with global market growth stagnating for two consecutive years and a notable decline in the Chinese market, reflecting a challenging environment since the 2008 financial crisis [2][4][5] Market Performance - According to Bain & Company, the luxury goods market is expected to experience zero growth in 2025, with the Chinese luxury market facing a dramatic decline of 18% [5][8] - The luxury sector's core businesses, such as leather goods and jewelry, are under pressure, while the beauty segment shows slight growth, indicating a shift in consumer preferences [4][10] Consumer Behavior - The Z generation's luxury spending dropped by 7% in 2024, equating to a market evaporation of $57 billion, as consumers become more discerning and shift their spending towards more stable assets like gold and jewelry [5][8] - Chinese consumers are increasingly rational in their luxury spending, with only 26% of high-end consumers planning to increase their spending in 2025, a significant drop from previous years [8][9] Brand Strategies - Major luxury brands are reassessing their strategies, with LVMH's revenue declining by 4% in the first half of 2025, prompting the company to consider selling its designer brand Marc Jacobs to alleviate performance pressure [11][17] - The beauty segment is emerging as a potential new growth engine for luxury groups, with brands like LVMH and Kering investing in beauty products to attract younger consumers [20][22] Competitive Landscape - The luxury beauty market is witnessing a transformation, with traditional high-end brands facing growth challenges while ultra-high-end brands maintain stable growth [21][29] - Local brands are gaining traction in China, appealing to consumers seeking personalized and culturally relevant products, which poses a challenge to established luxury brands [9][29] Future Outlook - The luxury goods industry must adapt to changing consumer preferences and market dynamics, focusing on emotional engagement and experiential offerings to navigate the current downturn [9][20][29]

Group 1: Market Trends - The infant formula market is moving towards ultra-premium products, with a 2.3% year-on-year growth in total channels from January to April 2025, while offline sales declined by 1.4% and online sales increased by 12.3% [1] - The ultra-premium+ segment grew by 13.3% year-on-year, while the ultra-premium segment declined by 4.8%, high-end by 14.6%, and mid-high-end by 2% [1] - The market share of ultra-premium+ reached 33.2%, and ultra-premium at 31.2%, indicating a significant shift towards higher-end products [1] Group 2: Company Performance - Feihe achieved a revenue of 20.75 billion yuan in 2024, a 6% increase year-on-year, with infant formula revenue at 19.06 billion yuan, up 6.6% [2] - The sales of Feihe's ultra-premium product, Star Flying Fan Zhuo Rui, increased by over 60% year-on-year, reaching 6.7 billion yuan, while the classic Star Flying Fan series saw a decline [2] - Since 2017, Feihe has focused on ultra-premium products, increasing their share in infant formula from 22% in 2016 to 75% in 2024 [2] Group 3: Foreign Brands Performance - Danone reported significant market share growth in China, particularly with its ultra-premium Aptamil series [3] - FrieslandCampina's core infant formula brand, Friso, maintained double-digit growth in the Chinese market in 2024 [3] - Nestlé's infant formula business in China achieved high single-digit growth, with a recovery in the previously declining Wyeth Illuma brand [3] Group 4: Strategic Insights - The decline in newborn numbers has made ultra-premium positioning the most important strategy for infant formula giants [4]

Industry Overview - The infant formula market is trending towards ultra-premium products, with overall channel growth of 2.3% year-on-year in the first four months of 2025, while offline sales declined by 1.4% and online sales increased by 12.3% [1] - The ultra-premium+ segment grew by 13.3% year-on-year, while the ultra-premium segment declined by 4.8%, high-end segment down by 14.6%, mid-high-end up by 2%, and mid-low-end up by 2.7% [1] - The market share of ultra-premium+ reached 33.2%, ultra-premium at 31.2%, high-end at 24.2%, mid-high-end at 8.6%, and mid-low-end at 2.7% [1] - The infant formula market is entering a phase of stock adjustment, with offline sales expected to decline by 9.8% in 2024, alongside a 9.4% drop in sales volume and a 0.3% decrease in average price [1] Company Performance - Feihe achieved revenue of 20.75 billion yuan in 2024, a year-on-year increase of 6%, with net profit of 3.57 billion yuan, up 5.3% [2] - Revenue from infant formula reached 19.06 billion yuan, growing by 6.6%, with ultra-premium product sales (Star Feifan Zhuorui) increasing by over 60% to 6.7 billion yuan, while the classic Star Feifan series saw a decline [2] - Since 2017, Feihe has focused on ultra-premium products, increasing the share of ultra-premium products in its infant formula from 22% in 2016 to 75% in 2024 [2] Foreign Brands Performance - Foreign brands focusing on the ultra-premium segment are also experiencing growth, with Danone reporting significant market share gains in China [3] - Danone expressed satisfaction with the performance of its ultra-premium Aptamil series, while FrieslandCampina's core brand, Friso, maintained double-digit growth in China [3] - Nestlé's infant formula business in China achieved high single-digit growth in 2024, with Wyeth's business recovering from previous declines, becoming the largest contributor to growth in the China region [3] - Overall, the reduction in newborn numbers has made ultra-premium positioning the most important strategy for major infant formula players [3]