Summary
We hosted an expert conf call with Infant Milk Fomula (IMF) distributor, who distributes IMF brands including Feihe, YIli, Junlebao etc in Northern China. The inventory level of Feihe and Yili are in good position, and their channel profitibility is stable. Junlebao adjusted its channel policy which have impacted distributors’ interest. Feihe GMV grew 20% in 2020, and it aims a 25% growth this year in the region, according to the distributor. We expect Feihe to continue expand its market share and remains dominant position in Northern China. Yili have changed product package and upgraded formula recently, which enhanced sales performance in retail end.
We are positive on the IMF domestic leading brands, and believe they will further penetrate in low tier market. IMF domestic leaders are expanding market share, driven by the launch of new product (A2, goat milk powder, children milk powder) and formular upgrade. The sales of high end products obviously outperformed the mid and low end products, driven by the consumption upgrade. We believe the industry leaders will further enhance their profitability with product mix upgrade.
1. Feihe has recently increased its market share rapidly. Its market share lifted by 5 percentage point last year to 38%. This is driven by a flatten distribution channel restructure, an increase of product SKU, distinct marketing strategies. It rans flexible channel policy with market oriented plans. The channel gross margin is at the range of 12-15%. Distributors are comfortable with channel profit as 1) brands are very strong, 2) brands input a lot of support in channel.
2. Feihe achieved sales grwowth of 20% in the region in 2020, driven by 1) sufficient stock inventory during the pandemic, 2) its has a high penetration in the market with more stores than its competitors, 3) new products including Zhuoran and A2. Feihe GMV grew 13% in the first four months this year on a high base, as well as driven by more market investment with sales rebates to certain products. In general, Feihe’s children milk powder sold well, and Zhuoran is likely to become a killer product.
3. Yili has a market share of 8% in the local market. It changed product package last year and upgraded formula recently. This helps improve its brand image.
4. The market share of Junlebao is only 3% in the local market. Junlebao adjusted channel policy this year and cut the channel GPM by half to 15%. Distributors are reluctant to cooperate with this brands as they are required to input staff and distribution cost in the channel.
5. Consumption trend of IMF. People born in 90s become the main purchaser. They are more sophisticated than parents in the past. Their first choice is brands, and then value for money when making the purchase decision. In the consumption trend, Feihe will benefit most as it has strong brand equity and a wide & deep distribution coverage.
郑重声明：以上内容是作者基于公开信息所做的判断，仅代表个人或嘉宾观点，与本网站、任何公司与任何机构立场无关，不构成任何投资建议。本文未经本营和作者书面许可，任何机构和个人不得以任何形式转发、转载、翻版、复制、刊登、发表、修改、仿制或引用文章的全部或部分内容。本营对任何第三方的未经授权行为所产生的影响不承担任何责任，同时保持实施法律行动的权利。
更多详细信息，请联系：黄锐 / Richard Huang (richardhuang@acecamptech.com)
