INFANT FORMULA
How Do International Infant Formula Players Continue to Win in China Market?
BY Shine HuDec 18, 2020
In the first three quarters of 2020, China imported 252,000 tons of infant formula, down 2.5% year-on-year. The decline in imported infant formula milk powder is related to the falling birth rate in first-and second-tier cities and the increasing penetration of domestic milk powder in second-and third-tier cities.
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Status quo of China's milk powder market

Declining demographic dividend

In recent years, China has come out of the demographic dividend period due to the accelerating aging population and decreasing birth rate. The full liberalization of the second child policy ultimately did not trigger a spike in births. In 2019, total births fell by 580,000 from 2018 numbers down to 14.65 million, and the birth rate dropped to 10.48‰. The numbers of newborn is expected to drop further going under 11 million in 2030 [1].

China's 14th Five-Year Plan for 2021-2025 deleted the rhetoric of "family planning" from the previous five-year plans while putting forth the concept of "inclusiveness" in fertility policy for the first time. ChemLinked saw a signal of the country’s relaxation on birth restrictions to encourage more births.

*** “Demographic dividend” refers to the positive impact on economic growth that is generated by a specific demographic structure--a relatively large working-age population and a relatively low dependency ratio in the total population. ***

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Shine Hu
ChemLinked Research Analyst
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