Foreign firms milk it in scandal-plagued industry
Dairy imports are increasing their market share as worries about safety standards persist
A glass of milk from Australia, New Zealand, or many European countries, has become a regular breakfast choice for more and more Chinese consumers.
Driven by a "flight to quality", the dairy imports are gaining market share quickly in big mainland cities, since local consumers are losing confidence in home-grown dairy brands, which have been plagued by numerous quality scandals.
Online shopping portals and supermarkets have been offering a wide range of dairy brands from around the world, taking it as a golden business opportunity to attract middle-class consumers.
"Sales of imported milk products at our shop are growing by 30 to 40 per cent a month by the month this year," said Huang Xiaoqiang, vice president of Yihaodian, a leading online retailer controlled by American supermarket chain Wal-Mart. The site sells 35 foreign brands of UHT (ultra-high temperature treated) milk from 13 countries, and the monthly sales revenue for such milk products exceeds 10 million yuan (HK$12.23 million).
Huang said nearly half the buyers who used the site would include imported milk in their online order basket. And the buyers came from all different walks of life.
Top brands on the site include Oldenburger from Germany, Country Goodness from New Zealand, and Mera from the United States. Most imported milk products are priced between 10 yuan and 20 yuan for a one-litre container. "They are actually around the same price as local brands, but they are believed to have a better quality," Huang said. "The profit margin on imported milk is not high, but we take it as a very important category in our product mix because it represents a quality and it can bring return customers."