IMF Market for Past COVID 19

Since the outbreak of COVID-19, many Chinese consumers changed their shopping habits. For example, families are more likely to choose foods with a longer shelf life to accommodate the long period of time spent at home during quarantine. However, for families with babies aged 0-3, there are not so many substitutes for babies’ foods. Infant Milk Powder (IMF) is an essential food for babies.

According to Kantar Worldpanel’s Baby Panel, the IMF market recorded a year-on-year growth of 6% in the 4 weeks after the outbreak (January 25th to February 21st) in total Urban China. Although slower than its full-year growth of 8% in 2019, when compared to overall FMCG sales post-outbreak the impact on IMF sales is more limited. Driven by stockpiling, trip volume increased by 9% which was the key driver of IMF growth during this period.

• Neighbourhood delivery becomes a new favourite

After the Covid-19 outbreak, consumers have reduced their shopping frequency. Baby Panel data indicates that in store transactions declined in both Hyper and Supermarket by 17%. The call for “no visits, no gathering” caused the gifting channel to decrease by 19%. Moreover, due to safety considerations and travel restrictions across borders, most families have delayed or cancelled overseas trips. As a result, purchases from overseas fell by 52% year-on-year.

Although the ecommerce channel increased by 4% year-on-year, the stagnation of logistics transportation in some regions stopped families from purchasing IMF to meet their hurried demand.

Many baby stores saw growth during this time, with shoppers taking advantage of their geographic position (many stores are spread across the city and close to communities). Besides their physical stores, more sales were shifting from offline to online. 

Consumers can join the WeChat groups organized by baby store to order IMF, or directly purchase IMF through the baby store public account or via WeChat mini program.

As baby stores offer a large coverage, the delivery services in the same city is convenient and make it simple for consumers to buy IMF without leaving their home. This efficiency relieves consumers’ anxiety and also successfully helped baby stores to gain a large number of new followers.

Besides more active sales from baby stores, many community purchasing groups also attracted more baby families to complete their IMF purchase using WeChat. As a result of those different factors, the overall WeChat channel increased by 33% year-on-year during the epidemic.

• Win in the Pandemic stage

Many IMF manufacturers responded quickly after the COVID-19 outbreak, actively adopting a series of measures in various social platforms, such as live lecture, expert consultation, and health counselling, to keep in touch with parents and help to relieve their stress. In the next 2-3 months, capturing consumers who have ran out of stock is more critical.

Internally, the recovery of the raw material supply chain, production and logistics will determine if there will be a competitive offer to fulfil the demand. Domestic production is gradually resuming now, while at the same time, overseas is becoming the main battlefield of the pandemic. How to ensure the production and transportation of imported materials while not disrupting the market will be a question that many IMF manufacturers should pay attention to.

Externally, the resource allocation to different channels would determine whether the battlefield is correctly selected. Baby stores, who established good communication with consumers through WeChat during the epidemic, are expected to maintain their good growth momentum. On the other hand, with the gradual recovery of logistics, many consumers will return to purchase through ecommerce platforms thanks to its advantage of a diversified offer without regional restrictions as well as its convenience. Furthermore, the potential of social e-commerce, represented by WeChat, should not be under-estimated.

What’s more, consumers’ health awareness is constantly evolving since the epidemic. Topics related to scientific prevention of disease or immunity strengthening will continue to be popular for various baby families.