With Chinese consumers' becoming more aware of health, more people regard low-temperature milk as a healthier and more nutritious dairy product, and the market share of low-temperature pasteurized milk is gradually expanding. The latest data ^[1] shows that China's pasteurized milk market in 2019 was about 34.3 billion yuan, an increase of 11.6% year-on-year, while the UHT (ultra-high temperature) milk sales were 94.2 billion yuan, an increase of only 1.7% year-on-year. Although low-temperature pasteurized milk has a relatively smaller market size, it has excellent market development potential.

In recent years, foreign companies have gained insights into Chinese consumers' growing interest in value-added and better-tasting dairy products and tried to tap into this lucrative market. Thanks to increasing and frequent international trade, more convenient transportation, and the support of the Internet platform, imported low-temperature pasteurized milk brands make a strong presence on Chinese leading e-commerce platforms such as JD and Taobao. Multinational companies also target this market. For example, US beverage giant Coca-Cola Co has set up a joint venture with Chinese dairy giant China Mengniu Dairy to produce and sell chilled milk in China.

How do these low-temperature pasteurized milk brands perform in China market? ChemLinked has sorted out detailed information from Taobao, one of the key online marketplaces for imported pasteurized milk brands.

Market performance

The imported pasteurized milk brands in Taobao are mainly from New Zealand and Australia. The price of them is between 50-70 yuan per liter, and the price of high-end products is above 100 yuan. The premium pasteurized milk products differentiate themselves from ordinary ones by using unique selling points such as no artificial homogenization. Consumers' comments on imported pasteurized milk are mostly of good taste, rich milk flavor, and high price.

Australia

a2 has the best performance with monthly sales reaching more than 1600 bottles.

New Zealand

Newlait is the most expensive one but still has good sales with monthly sales exceeding 100 bottles.

There are also some imported low-temperature modulation milk brands from Asia.

South Korea

South Korean products are relatively cheaper than those from Australian and New Zealand and they have been available in China market through multiple channels such as offline retailers Sam, China Resources Vanguard, and Aeon and convenience stores such as Lawson.

Some imported pasteurized milk brands adopt pre-sale models of monthly, quarterly, and annual packages. Popular deliver mode is two bottles per week and eight bottles per month.

Chinese pasteurized milk market development trends

Several key trends are shaping China's pasteurized milk market:

• The COVID-19 pandemic has further enhanced consumers' appreciation of dairy products, especially high-quality protein and other added-value functions.

• Pasteurized products with a longer shelf life (mostly 15 days) are gaining traction.

• The rapid growth of new retail models such as e-commerce, O2O (Online to Offline), community-based group buying, and live-streaming has become an essential driving force for the development of the low-temperature pasteurized milk market. 

• More Chinese airport ports streamline the import process of pasteurized milk and shorten the customs clearance time, facilitating the entry of more imported pasteurized milk products.

How many steps does it take for pasteurized milk to enter China?

For importers:

Apply for filing online, and then submit the relevant paper materials to the local customs.

Provide the local customs with materials and information such as the proper and complete consignee filing application form, the enterprise food safety management system, the type of food to under operation and the storage location, etc.

The customs shall issue the record number after verifying the consignee’s record data and electronic information.

For exporters:

Apply to the General Administration of Customs for filing, including the name of the exporter or agent, country or region, and other information.

The General Administration of Customs shall record the exporters or agents who provide complete record information. The record management system generates the record exporter or agent name and publishes it on the website of the General Administration of Customs.

Pasteurized milk needs to go through the quarantine approval procedures and obtain the "People's Republic of China Entry Animal and Plant Quarantine License" before entering the China market.

Currently, China can import dairy products other than infant formula milk products from 31 European countries, including the United Kingdom, Italy, Spain, Switzerland, Sweden, Portugal, France, and Russia, and nine Asian countries including Turkey, Kazakhstan, Vietnam, Israel, Thailand, Malaysia, and South Korea, and other ten countries including New Zealand and Australia from Oceania, Brazil, the United States, and Canada from the Americas, as well as Chinese Taiwan ^[2]. 

ChemLinked can provide market entry services regarding all-round support to overseas brands targeting the Chinese market. We specialize in the importation, marketing, multi-channel distribution, warehousing, and EC flagship store operations service of FMCG products in China.

***Disclaimer: All images used in this article are from the internet.