Core Insights - The Chinese infant formula market is experiencing a significant shift, with foreign brands showing strong growth despite an overall market increase of only 0.5% [1][3] - The return of foreign brands marks a new phase in the competitive landscape of the Chinese infant formula market, which has seen dramatic changes over the past two decades [3][5] Market Dynamics - In 2008, the melamine scandal led to a collapse in consumer trust for domestic brands, allowing foreign brands to capture up to 60% market share [3][5] - The following decade was dominated by foreign brands, with companies like Mead Johnson and Wyeth leading the market [5] - A turning point occurred in 2017 when domestic brands began to regain market share, culminating in Feihe surpassing Wyeth in 2019 [5][8] Current Performance - In the first half of 2025, Feihe reported a revenue decline of 9.36% and a net profit drop of 46.66%, while foreign brands like FrieslandCampina and A2 Milk Company continued to grow [8][9] - FrieslandCampina's brand, Friso, has become the leading international brand in the Chinese infant formula market, with its product becoming the best-selling SKU [8][11] Strategies of Foreign Brands - Foreign brands are leveraging a three-pronged strategy to reclaim market share: 1. **Premiumization**: Focusing on high-end products, with the ultra-premium segment accounting for 64.4% of the market [10][11] 2. **Channel Penetration**: Expanding into lower-tier cities through digital platforms, enhancing direct connections with retailers [15][16] 3. **Price Stability**: Maintaining price integrity amidst a domestic price war, ensuring profitability for retailers [16][17] Challenges for Domestic Brands - Domestic brands face significant challenges, including a fragmented pricing structure and declining consumer confidence [18][20] - The transition to new national standards has led to pricing chaos and reduced channel profitability [20] - Domestic brands are also struggling with cost competitiveness, as imported raw materials can be cheaper than local production [20] Strategic Shifts for Domestic Brands - Domestic companies are diversifying their product offerings and exploring international markets to counteract declining sales [21][23] - The focus is shifting towards all-age nutrition, expanding from infant formula to products for children, adults, and seniors [23][30] Future Outlook - The restructuring of the market is underway, with an increasing concentration of market share among leading brands [24][29] - The competition is evolving from basic nutrition to advanced ingredient development, with a focus on active components like HMO [26][30] - Foreign brands are localizing their supply chains to enhance competitiveness in the Chinese market [27][28] Conclusion - The infant formula industry in China is entering a new phase of refined competition, where trust and innovation will be key determinants of success [30][31]

Core Insights - Recent reports indicate a price increase in infant formula products from brands such as Aptamil, Royal FrieslandCampina, Wyeth, Beingmate, and a2, primarily influenced by promotional activities on platforms [1][2] - Domestic milk powder brands are recovering from a price war that lasted four years, while foreign brands are experiencing price increases due to strict control over supply and pricing [1][4] Price Fluctuations - Consumer reports on social media highlighted price increases for several milk powder brands, but investigations revealed that price changes were largely due to promotional activities rather than consistent price hikes [2][3] - For instance, the price of Royal FrieslandCampina's formula fluctuated between 298 yuan and 356 yuan per can, showing a price difference of 58 yuan [2] Market Dynamics - The domestic infant formula market is undergoing a deep adjustment phase, with increased consumer demand for high-end products containing HMO and A2 protein [4][6] - Foreign brands have maintained a dominant position in the high-end market, with companies like FrieslandCampina and Danone reporting significant revenue growth driven by their premium product lines [6][7] Raw Material Costs - The increase in prices for foreign milk powder is also attributed to rising costs of international bulk powder raw materials, with New Zealand's whole and skim milk powder prices increasing by 2.1% and 0.4%, respectively [5] - Factors such as high European milk prices and inflation have contributed to the rising costs of raw milk [5] Strategic Focus - Companies are advised to focus on three key areas: enhancing high-end product development, strengthening niche market offerings, and optimizing channel strategies to improve brand loyalty [7] - The future competition in the dairy industry is expected to shift from product sales to providing comprehensive nutritional solutions throughout the consumer lifecycle [7]