Wednesday, February 6, 2013

Consumers Focused on Infant Formula Brand Reputations

According to Dairy Products China News issued by CCM in January, Chinese consumers intended to focus on infant formula brand reputations. The complete report is shown as follows:

Research data on consumers’ online searches which was released in December showed the ongoing focus on formula brands’ reputations in Q3 2012.

According to Baidu Data Research Centre (Baidu Data, part of Baidu, which accounts for 80% of China’s online search traffic), milk powder/formula attracted increasing levels of consumer interest in Q3, being the subject of an average 1,140,000 searches per day, up by 31% against Q3 2011. In fact, the search levels increased successively through the quarters last year (Q1=1,000,000, Q2=1,120,000, Q3=1,140,000).

Questions of brand reputation accounted for 24% of the total searches on milk powder/formula, followed by brand name (19%), product name (17%), product safety issues (12%) and product prices (6%).

The focus on brand reputation is 4 times higher than that on product prices according to this data. Food safety receives a separate score, but undoubtedly lies behind the focus on brand reputations. For example, in June 2012, Yili’s infant formula was hit by a scandal over elevated mercury levels, while in July 2012 various brands were alleged to contain carcinogens (Nanshan) and vanillin (Mead Johnson and Abbott) in media reports. The increased focus on brand reputations has provided an opportunity for processors to raise their prices, in line with the seemingly ever-increasing prices of infant formula in recent years.

Yili was the brand in the category which drew the most attention in Q3, being checked out by 6.8% of the netizens overall (note: the figure in the chart below – 18% – refers to its share amongst searches for domestic brands only). International brands attracted 460,000 searches per day whilst local brands received 280,000 searches per day: this is less than the total number of searches, as some searches are understood to have been more generic, focusing on terms such as “infant formula” rather than specific brands. Abbott (checked out by 9.7% of the searchers for international brands) and Yili (checked out by 18% amongst searchers on domestic brands) were, respectively, the brands of most interest in these categories.

The similar level of attention shown to the various international formula brands reflects the fierce competition amongst them and is broadly in line with their market shares. According to AC Nielsen, Dumex accounts for a 12.6% market share at present, followed by Wyeth (Nestlé) and Mead Johnson each at 12%, Abbott at 9% and Nestlé (excluding Wyeth) at 5%. Advertising support seems likely to be a significant factor attracting netizens’ attention. For instance, Abbott spent USD509,000 on online advertising in Q3 2012, 53% more than Wyeth: although it has a lesser market share than Wyeth in China, it still drew more attention than Wyeth online.

Table Contents of Dairy Products China News 1212:
Prospects for the Cheese Market in China
Consumers Focused on Infant Formula Brand Reputations
Dairy Imports Increase
Government’s Import Tariff Cut for Specialty Infant Formula
Yili Plans a New Infant Formula Plant in New Zealand
Taizinai Group Rebuilds with Fresh Strategy
Vitasoy Prospers in H1 FY 2013
Ausnutria Consolidates Overseas Activities
Manor Pasture Launches IPO Plan
Hohhot Launches a New Farm Project
Arla Foods Launches UHT Milk
New UHT Buffalo Milk from Royal Dairy

Dairy Products China News, a monthly publication issued by CCM on 30th or 31st, offers you the latest information on new market dynamics, company development, new products, technology, packaging and raw material supply, etc. It also focuses on the government’s direction and polices, helping you get the whole picture of the industry. 

CCM is dedicated to market research in China, Asia-Pacific Rim and global market. With staff of more than 150 dedicated highly-educated professionals, CCM offers Market Data, Analysis, Reports, Newsletters, Buyer-Trader Information, Import/Export Analysis all through its new proprietary product ValoTracer.

For more information, please visit

Guangzhou CCM Information Science & Technology Co., Ltd.
17th Floor, Huihua Commercial & Trade Mansion, No.80 Xianlie Zhong Road, Guangzhou 510070, China
Tel: 86-20-37616606

No comments: