Since the 1990s, China’s dairy industry has witnessed a surge prompted by economic and social changes. Although the majority of Chinese are lactose intolerant, dairy consumption is increasing. This can be attributed to an increase in disposable income, innovation in products, dietary changes, and health awareness. Dairy products are becoming increasingly recognized as good sources of protein and calcium. According to the latest Chinese Dietary Guidelines, adults should consume 300 to 500 grams of dairy products daily. Currently, China is the second-largest dairy product and egg market in terms of sales revenue and the second-largest dairy importer globally.
Production and foreign trade
In 2008, the widespread melamine scandal severely disrupted China’s milk production as well as consumer confidence and trust in domestic dairy producers. Since then, the government has taken steps to enforce new regulations and gain better control over the quality and safety of domestic dairy products. In response to these restructuring processes, many small farmers exited the market, resulting in a spurt in market concentration. Currently, two major dairy processors – Inner Mongolia Yili Industrial Group and China Mengniu Dairy Company – dominate the market.
Although domestic production has picked up in recent years, China still relies heavily on dairy imports. New Zealand is the leading dairy supplier for the Chinese market accounting for over one-third of all imports. Milk powder, packaged milk and whey were the main imported dairy products in terms of import volume.
Despite the increase in dairy imports and sales, dairy consumption per capita is still much lower in China than in the rest of the world, even when compared to countries like Japan, which shares similar dietary habits to China. Therefore, the Chinese dairy market expansion will more likely be driven by the rising price of raw milk and increased premium product options. Surveys show that more urban Chinese consumers are willing to spend money on niche, high-end, organic, and healthier products. This could, consequently, lead to a shift in the dairy industry development direction from scale growth to product upgrade.
This text provides general information. Statista assumes no
liability for the information given being complete or correct.
Due to varying update cycles, statistics can display more up-to-date
data than referenced in the text.
Research expert covering e-commerce and FMCG in Greater China