Foreign milk powder reproduction price rise

Recently, international dairy giants such as Nestle and Mead Johnson once again raised the prices of some milk powder products sold in the domestic market. This is the fourth time that imported milk powder has been imported in the past three years after the price increase of “foreign milk powder” at the end of last year. The price adjustment has reached an average annual increase of 15.5%. In the face of consumer doubts, the so-called “cost-rising” theory of enterprises has long been unconvincing, and the international giants are trying to control the pricing power of China’s milk powder market, and the attempt to “distribution” the Chinese market may be the price increase. because.

Foreign milk powder "all the way to song"

Domestic milk powder failed to regain trust. In April, “Nestle China” announced that prices of certain Nestle products had been adjusted. Among them, the average price increase of dairy products was 5%. Just before this, the domestic infant formula milk powder market reported frequent price increases, Wandashan, Mead Johnson and other collective price increases, set off a new wave of price increases trend.

Industry analysts said that "foreign milk powder" is still trying to profit through price increases and accelerate expansion in the domestic market. According to statistics, after the “melamine incident” in 2008, the foreign milk powder entered a period of concentrated price increase. In three years, a total of four price adjustments were conducted. Mead Johnson, Abbott, Dumex, Nestle, Wyeth, Meiji, and Mesophyll were all involved in the milk production. Each time the price increase rate is about 10%.

However, in the face of the large-scale crazy price increase of “foreign milk powder”, consumers do not have many alternatives to choose from. They are helpless and passive. This also tells us from the side: 4 years after the domestic milk powder is exposed to safety problems, consumers still do not restore trust in domestic milk powder. The quality of foreign milk powder is still worthy of favor, and consumers are under enormous pressure brought about by their constant price increases. Can only afford to take it.

Experts also pointed out that more than a decade ago, the share of foreign milk powder in the domestic milk powder market was only 30%. At present, this situation has undergone a “substantial reversal”, and even if the price of foreign milk powder “sings all the way”, it costs 200 yuan per can. Press for nearly 400 yuan per can.

Not only that, in recent years, consumers are increasingly inclined to rely on foreign brands, domestic dairy products market share continues to shrink, foreign milk powder has occupied the domestic milk powder market, "half the country," in the high-end market, foreign milk powder has even accounted for more than 70 % of shares.

The surprising profit of foreign milk powder holds that “pricing power” has been stepped up. According to Wang Dingmian, a domestic dairy expert, cost increases, formula reforms, and replacement packaging are not the real reasons for rising milk prices. Pursuing profit maximization is its The price increase.

With regard to the rigid growth in the demand for dairy products for infants and young children in China, the international milk powder giants who are not satisfied in the overseas market will turn a blind eye. Winning the market and earning high profits are the real purpose of this. At the same time, based on the Chinese consumer’s slight “blind” worship of foreign brands, foreign brands quickly gained market pricing power. In this regard, Wang Dingmian pointed out that each price increase plan for foreign milk powder in the Chinese market has a tacit cooperation with each other. According to the industry's situation, from 2005 to now, foreign brands' average annual price increase rate is about 15%, and their high profits haven't seen any decline.

According to the report of the Ministry of Agriculture, the current output of major international dairy companies has increased by a certain extent, and the recent downward trend in prices has been inevitable. However, the price of foreign milk powder in China has repeatedly “risked against the trend.” Therefore, the enormous potential of the Chinese market has attracted more and more international brands. The foreign dairy industry has begun to fully penetrate the upstream and downstream industrial chains of the dairy industry in China. While firmly controlling the high-end market of infant milk powder, it has begun to focus on Third-tier cities have laid sales networks.

Boli has no guarantee of “multi-selling” domestically-produced milk powder without retaking the right to speak. It is a commercial environment where competitors frequently raise prices. Many domestic milk powders are no longer guaranteed to “become the same”. Due to cost pressures and business development needs, prices have not changed in many years. Under the circumstances, we had to abandon the "small profits but quick turnover" business model and began to seek to seek industrial renewal through "price increase survival."

It is understood that in recent years, the quality of milk powder produced in China has become more frequent and the market sales have decreased. Therefore, it is necessary to adopt the strategy of “small profits but quick turnover”. In the fierce impact of imported milk powder, the market share of domestic milk powder continues to shrink, coupled with rising production and marketing costs, resulting in a drop in profits of domestic dairy companies, no more funds to invest in product development and promotion, market share has further reduced, eventually fell into the "bout Difficult to sell more difficult.

In this regard, Wang Ding cotton bluntly, the nutritional content of foreign milk powder and domestic milk powder is not much different, just in the packaging, advertising and after-sales service slightly advantage. He suggested that domestic dairy companies should control their products and increase their after-sales service responsibilities in order to win consumer interest and confidence in their products. Only by increasing the market share and discourse power of domestically produced milk powder can the trend of consecutive price rises of foreign milk powder be changed.