〇　Preface: China's Story in a Can of Formula

Infant formula is one of the most strictly regulated, highest-margin, and most fiercely contested food categories in the world. In China, the story is exceptionally complex — and exceptionally profound.

In 2008, a trust collapse triggered by the melamine scandal plunged the entire domestic infant formula industry to its nadir. The Sanlu brand fell; the infant formula businesses of major domestic dairy companies including Sanyuan, Mengniu, and Yili all suffered devastating blows. Parents preferred to ask friends and family to buy formula for them from Hong Kong, Macau, or Europe rather than trust the domestic cans on supermarket shelves. That generation of Chinese parents equated "imported formula" with "safety," and voted with their purchasing decisions. At that time, imported brands held more than 70% of China's infant formula market; Nestlé Wyeth, Mead Johnson, and Dumex (Danone) were the most trusted choices.

The sixteen years that followed were a long and arduous process of rebuilding trust. Formula registration, new national standards, full-chain traceability, more than 300 factory inspection indicators — every policy was a hurdle that weeded out non-conforming products and left behind brands that had been through the forge. The formula registration system introduced in 2016 embedded the iron rule of "each enterprise may only register three series and nine formulas" into the competitive logic of the market at its most foundational level. In February 2023, the new national standards for infant formula (GB 25596—2022 and GB 10767—2021), described as the strictest in history, were formally implemented: DHA was upgraded from a recommended indicator to a mandatory addition, a positive-list mechanism for optional ingredients such as HMOs was officially established, and the product-technology threshold for the entire industry was pushed to new heights.

By the end of 2024, this process of rebuilding had borne fruit. Domestic brands' market share climbed from less than 30% a decade earlier to over 65%. Feihe held the top spot in China's infant formula sales volume for seven consecutive years, with FY2024 revenue of RMB 20.75bn and a gross margin of 66.34% — a profitability that is astonishing among all food companies worldwide. Junlebao has submitted its listing application to the Hong Kong Stock Exchange. Yipin Dairy is advancing its A-share IPO process. China's infant formula industry has, from the ashes of the melamine era, grown a cohort of enterprises with genuine global competitiveness.

Yet simultaneously, a deeper structural pressure has been building: the sustained decline in births. China's live-birth population fell from 17.86 million in 2016 to 9.02 million in 2023 — nearly halving in seven years. In 2024, births briefly rebounded to 9.54 million due to the "Year of the Dragon effect" (traditional culture associates higher willingness to have children in Dragon Years), but in 2025, births fell again to 7.92 million, the lowest since 1949.

What does this trend mean? It means the target audience for infant formula is shrinking at a rate of hundreds of thousands to more than one million per year. It means stock-market competition is the backdrop of the industry, not merely a temporary predicament. It means every increment of market share must be seized from competitors — it cannot come from the natural expansion of the market.

Yet, strangely, the industry has not collapsed — within this contraction, it has undergone deep differentiation and upgrading. The total market has fallen from a peak of nearly RMB 200bn back to approximately RMB 110–130bn, but the market share of ultra-premium formula (priced above RMB 400 per can) has been growing against the trend. The goat formula subsegment reached RMB 16.7bn in 2023 and is projected to surpass RMB 20bn in 2025, growing far faster than the industry average. Global CAGR for organic formula is 7.6%. A2 protein formula in 2025 already accounts for 20% of China's infant formula market value. Functional formula with HMO additions is penetrating from premium to mainstream premium.

Declining birth rates compress volume; premiumization raises price; the rise of subcategories (goat milk, organic, A2, HMO functional) partially fills the space left by the contraction of mainstream cow-milk formula. These two forces offset each other, allowing the entire industry to maintain a certain structural equilibrium amid pain.

This report attempts to reconstruct the full picture of this contest. Starting from the true numbers of market scale, the Research Institute analyzes in depth the financial performance of major players, every profit node in the supply chain, structural opportunities in subcategories, and the trajectory of evolution over the next five years. The data draws primarily on FY2025 annual reports and the latest developments in Q1 2026, supplemented by data from authoritative institutions including the National Bureau of Statistics of China and the State Administration for Market Regulation.

Core thesis in one sentence: Feihe holds its domestic leadership but faces renewed pressure; Danone Aptamil is counter-cyclically expanding in the imported camp; goat formula and organic are structural increments for the next decade; the registration system is pushing market concentration to an all-time high; and birth rates are the single largest uncertainty variable in all forecast models.

This report is divided into twelve chapters, starting from definitions and classifications, proceeding through global landscape, macro environment, market scale, supply-chain breakdown, in-depth analysis of key enterprises, geographic footprint, deep dives into subcategories, technology evolution tracking, comprehensive risk assessment, and through to the 2026–2030 outlook and conclusions.

一　Definitions and Classification: The Landscape and Supply-Chain Overview of Infant Formula

1.1 What Is Infant Formula?

Infant Formula Milk Powder is a powdered food designed specifically for infants and toddlers up to three years of age, using cow's milk or goat's milk as the base ingredient with scientifically proportioned and fortified nutrients. Under Chinese national standards GB 25596—2022 (infant formula food, applicable to 0–12 months) and GB 10767—2021 (toddler formula food, applicable to 12–36 months), the types of nutritional components, limits on additives, and manufacturing processes are all subject to strict regulatory constraints.

The most fundamental difference between infant formula and ordinary adult milk powder is that formula must approximate the nutritional structure of breast milk as closely as possible — including the ratio of whey protein to casein (Stage 1 standard: approximately 60:40), the types and proportions of unsaturated fatty acids (DHA must be added), the types and limits of vitamins and minerals (core elements including iodine, zinc, and iron), and the addition of functional ingredients such as prebiotics, HMOs (human milk oligosaccharides), DHA, and ARA. This high-difficulty R&D requirement to "simulate breast milk" is the fundamental support for the R&D investment and gross margins (leading brands achieve 55%–66%) that far exceed other food categories.

Under China's regulatory framework, all infant formula sold in mainland China (including imported products) must pass the formula registration system, approved by the State Administration for Market Regulation before they may be produced and sold. By the end of 2025, the total number of valid registered formulas reached 1,276, with domestic formulas accounting for approximately 80% and imports approximately 20%.

1.2 Classification by Stage: The Commercial Logic of Stage 1, 2, and 3

Infant formula is classified into three stages by applicable age in months — the most fundamental classification dimension in the industry, and the most fiercely contested battleground for brands.

Stage 1 (0–6 months): Closest to breast milk, with the highest product specification requirements. Whey protein to casein ratio must be approximately 60:40. DHA, ARA, iodine, zinc, and iron are all mandatory additions. This is the highest-margin and most intensely competitive category in the entire industry.

Stage 2 (6–12 months): Babies enter the transitional period of introducing complementary foods. Protein requirements shift slightly from Stage 1. DHA and ARA supplementation remains important, and iron fortification is particularly critical. The probability of brand switching is higher than in Stage 1.

Stage 3 (12–36 months): Also known as toddler formula. Babies have largely transitioned to ordinary foods; formula plays more of a "nutritional supplement" than a "staple food" role. Comprehensive fortification of calcium, zinc, and iron is the core proposition.

1.3 Classification by Raw Material: Cow Milk, Goat Milk, and Organic

Cow Milk Formula: Using Holstein cattle milk as raw material, this is the mainstream category, accounting for over 80% of the infant formula market. Leading brands include Feihe, Yili Jinlingguan, Mengniu Ruibuen, Junlebao, Nestlé Wyeth, Danone Aptamil, and FrieslandCampina Friso.

Goat Milk Formula: Using goat's milk as raw material; the protein and fat globule size is smaller, beta-lactoglobulin content is lower (approximately 30% of cow's milk), and alphaS1-casein content is lower (more similar to human milk). Some research suggests better absorption rates and greater tolerance for sensitive babies. China's goat formula market reached RMB 16.7bn in 2023 and is projected to surpass RMB 20bn in 2025, with annual growth of approximately 12%–15%.

Organic Formula: Pastures must pass officially recognized organic certification systems (EU Organic label, USDA Organic, Australian ACO), with synthetic pesticides, synthetic fertilizers, antibiotics (prophylactic use), and synthetic growth hormones prohibited. The global mild organic infant formula market was approximately USD 3bn in 2024, projected to reach USD 5bn in 2031, with a CAGR of approximately 7.6% (2025–2031).

Special Formula (FSMP): For infants with special health conditions, including extensively hydrolyzed formula, amino acid formula, lactose-free formula, and preterm formula.

1.4 Classification by Price Tier: Five Gradients from Mass Market to Ultra-Premium

  • Mass market (below RMB 150/900g): Junlebao Jianer, Sanyuan Aili You, and similar.
  • Regular premium (RMB 150–250/can): Feihe Xingfeifan, Yili Jinlingguan Zhenai, Junlebao Lechun.
  • Premium (RMB 250–400/can): Feihe Super Xingfeifan series, Ausnutria Kabrita Yuebai, a2 Milk Platinum.
  • Ultra-premium (RMB 400–700/can): H&H Biostime Hexing, Feihe Zhuorui, Danone Aptamil Essensis, Friso Royal.
  • Top-tier luxury (above RMB 700/can): Feihe Jinzun Cobesi and select limited-edition imported organic products.

1.5 Full Supply Chain: Five Core Links from Pasture to Can

The infant formula supply chain has five core links: upstream milk supply, ingredient processing, formula R&D, manufacturing and filling, and channel sales. Each link has very different profit distribution and competitive dynamics.

1.6 The Entry Barrier of Product Registration

The formula registration system, fully implemented since 2016, restricts each brand to registering only three series and nine formulas for the same type of product (cow and goat milk formulas counted separately). Registration requires comprehensive materials including formula design rationale, raw material specifications, manufacturing process descriptions, product standards, nutritional analysis and verification reports, and clinical or pre-clinical study reports for certain ingredients. The registration cycle typically takes one to three years.

二　Global Landscape: A Trillion-Dollar Market and Multinational Giants' China Strategies

2.1 Global Infant Formula Market Overview

The global infant formula market was approximately USD 85–100bn in 2024, projected to grow at a CAGR of approximately 5.5%–7% between 2025 and 2032. The market's growth engine comes primarily from Asia-Pacific (China, India, Southeast Asia) and the Middle East. Five multinational giants — Nestlé, Danone, Abbott, Reckitt (Mead Johnson), and FrieslandCampina — together account for over 50% of global share. China's market accounts for approximately 15%–20% of global infant formula volume.

2.2 Nestlé (NESN.SW) — Wyeth and NAN Dual-Track Strategy

Nestlé's infant nutrition business encompasses the Wyeth Nutrition brand (S-26, Illuma, Qifu/Bozhen series) and NAN (Neng'en), making it one of the absolute leaders in global infant nutrition. Wyeth's "Illuma" (铂臻) series is a powerful brand in Hong Kong and mainland China's ultra-premium infant formula market. In mainland China, Wyeth/Nestlé faces pressure from both domestic premium brands (Feihe Zhuorui, Yili Jinlingguan) and Danone Aptamil, with market share showing a moderate continuous decline.

2.3 Danone (BN.PA) — Aptamil's Counter-Cyclical Offensive

Danone's Nutricia professional nutrition division, with its core brand Aptamil (爱他美), has become the strongest-growing multinational player in China's infant formula market. Aptamil currently holds approximately 14% of the overall China infant formula market, ranking second only to Feihe. Aptamil's competitive strategy is clear: no price wars, focus on ultra-premium, with clinical scientific backing as the core moat. In H1 FY2025, Danone's China professional nutrition business achieved double-digit year-on-year growth.

2.4 Abbott (NYSE: ABT) — Hospital Channel Advantage in Special Formula

Abbott's Similac and Sensitive series have deep roots in the China market through the hospital channel (obstetrics ward recommendations, neonatology use). Abbott's special formula (extensively hydrolyzed, amino acid) has a significant advantage in the special medical purpose formula (FSMP) market. Abbott's overall share of China's infant formula market is approximately 3%–5%.

2.5 Reckitt (Including Mead Johnson) — A Brand in Strategic Adjustment

Mead Johnson (Enfamil series) was once the top imported infant formula brand in China. Following its acquisition by UK-based Reckitt Benckiser in 2017 and China Primavera Capital's strategic investment in 2023, the business is under continued revenue pressure from both domestic premium brands and Danone Aptamil.

2.6 FrieslandCampina Friso (美素佳儿) — Dutch Milk Source as Premium Moat

FrieslandCampina's Friso (Meisu Jiaer) brand holds a solid position in China's premium-to-ultra-premium market with "Dutch-origin full-chain certified" as its core value proposition. In H1 FY2025, FrieslandCampina's professional nutrition revenue grew 18.1% year-on-year to EUR 718mn. Friso consistently holds third place in China's imported infant formula market (approximately 7%–8% share).

2.7 a2 Milk Company — A2 Protein's Niche Subsegment

a2 Milk uses A2-type protein milk as its exclusive selling point, targeting high-end to ultra-premium consumers. In FY2025, a2 Milk's infant formula business in China achieved NZD 560mn in total sales, with Chinese-label formula reaching NZD 305mn. The Chinese-label formula market share reached a record high of 5.5%, with a2 Milk now ranking fourth among all infant formula brands in China (behind Feihe, Aptamil, and Yili). The A2 protein subsegment accounted for 20% of China's infant formula market value in H1 2025, growing at approximately 14% year-on-year.

2.8 Bubs Australia — Australian Representative for Organic Goat Milk

Bubs Australia specializes in organic goat milk formula with "Australian ACO-certified pasture direct sourcing" as its core pitch, entering the China market through cross-border bonded and direct-mail channels. Bubs is one of Ausnutria Kabrita's most direct international competitors in China's organic goat formula subsegment.

三　Macro Environment: The Three-Way Game of New National Standards, Registration System, and Demographic Shift

3.1 New National Standards 2023: The Most Stringent Technical Barrier in History

Implemented on February 22, 2023, the new national standards — GB 25596—2022 (Infant Formula Food) and GB 10767—2021 (Toddler Formula Food) — represented the most comprehensive and profound revision to China's infant formula national standards since 2010.

Key changes include: DHA upgraded from recommended to mandatory (0.35%–2.00% of total fatty acids, with ARA co-addition required); stricter protein source restrictions (only cow or goat milk base, no plant protein); a positive-list mechanism for optional ingredients (HMOs, probiotics, OPO, lactoferrin, etc.); and standardization of labeling and promotional claims.

By end-2025: total valid registered formulas = 1,276; only 77 new formulas approved in the full year (versus hundreds at peak periods); national sampling pass rate for infant formula sustained above 99.9%.

3.2 The Formula Registration System: The Institutional Tool Determining Market Concentration

The registration system's core design — each brand may register only 3 series/9 formulas (cow and goat separately), with registration typically taking 1–3 years and costing RMB several million to tens of millions per series — has fundamentally restructured the industry's economics. Over 30 brands have exited the market; CR10 has climbed from approximately 75% five years ago to approximately 92%.

3.3 Births: Long-Term Decline under Cyclical Fluctuation

Key birth population data: 2016: 17.86mn (near-term peak); 2020: 12.00mn; 2023: 9.02mn; 2024: 9.54mn (Dragon Year rebound); 2025: 7.92mn (lowest since 1949).

Government responses include the full liberalization of the three-child policy (2021), multi-city housing incentives and cash birth subsidies, extended parental leave, and enterprise-level subsidies (Feihe's RMB 1.2bn birth subsidy plan announced in 2025).

3.4 Policy Environment: Tightening Import Regulations and Export Policy Support

Import regulations have tightened since 2024: all foreign infant formula manufacturers must complete GACC (General Administration of Customs) registration. Cross-border e-commerce regulations have become more detailed. Domestic brands receive policy support for overseas expansion through RCEP tariff preferences and "Belt and Road" food export facilitation measures.

3.5 Behavioral Shifts: "Ingredient Party" Culture and Precision Feeding

The purchasing decision logic of China's young parents has undergone deep change — from "choose a big brand / don't get into trouble" to "precision nutrition / scientific feeding." This has been driven by content ecosystems on Xiaohongshu (Little Red Book) and Douyin (TikTok China), mother-and-baby community word-of-mouth effects, and expanded demand for professional science communication content.

四　China Market Scale: RMB 120bn Stock Competition and Structural Differentiation

4.1 Historical Trajectory and Current State of Market Scale

China's infant formula market reached an all-time peak of approximately RMB 197bn around 2019, subsequently contracting:

  • 2019: ~RMB 197bn (historical peak)
  • 2022: ~RMB 140bn
  • 2023: ~RMB 120bn
  • 2024: ~RMB 120–137bn (Dragon Year rebound brought temporary recovery)
  • 2025E: ~RMB 110–126bn (birth decline to 7.92mn dampens demand)

The Research Institute uses approximately RMB 120bn as the current baseline market scale reference.

4.2 Internal Structural Differentiation

Price structure: ultra-premium share rose from approximately 15% in 2019 to approximately 30%–35% in 2024, projected to surpass 40% by 2030.

Category structure: mainstream cow formula share declining slowly; goat milk, A2 protein, organic, and special formula combined share growing significantly.

Channel structure: e-commerce (including content e-commerce) share has risen from approximately 28% in 2019 to approximately 45% in 2024; specialty mother-and-baby stores remain critical for ultra-premium.

4.3 Historic Reversal of Domestic vs. Imported Market Share

Period Domestic Imported
2013–2014 ~30% ~70%
2016 ~45% ~55%
2019 ~55% ~45%
2023 ~65% ~35%
2025 ~70%–75% ~25%–30%

4.4 CR10 Market Concentration: Oligopolistic Structure Accelerating

The top 10 brands combined hold approximately 90%–92% of the market, up from approximately 75% five years ago. This is one of the highest concentration rates for infant formula among all major economies worldwide.

五　Supply Chain Breakdown: Every Profit Point from Pasture to Can

5.1 Upstream Milk Supply: A Strategic Asset, Not an Ordinary Commodity

Feihe's Kedong pasture cluster in Heilongjiang (latitude 47°N Golden Milk Belt) is the finest representative of domestic self-built milk supply. Feihe has over 600,000 mu of forage planting base in Heilongjiang, modern pastures with completely closed management, and a full-wetprocess infant formula factory closely adjacent to the pastures — forming a complete system of "from one blade of grass to one can of formula in under 12 hours."

Overseas milk supply (New Zealand Fonterra, Australia Murray Goulburn, Netherlands FrieslandCampina, France Sodiaal, Ireland networks) forms a parallel system. Milk supply and ingredient powder costs account for approximately 35%–50% of infant formula production costs.

5.2 Mid-Stream Formula R&D: The Source of Core Competitiveness

Key R&D dimensions: building Chinese breast milk composition databases (Feihe's 2,000+ sample database is the largest of its kind for Chinese breast milk), introduction and validation of functional ingredients (HMO, OPO, probiotics), clinical feeding research, and registration dossier preparation.

5.3 Filling and Manufacturing: The Factory Is the Competitiveness

Wet process (liquid mixing → spray drying → filling) versus dry blending are the two main production routes. Leading brands (Feihe, Yili, Danone, FrieslandCampina) all use full wet process or "wet+dry combination" processes. Modern infant formula filling factories require investment of RMB 1–5bn or more.

5.4 Channel Competition: Mother-and-Baby Stores Reign Supreme with New Forces Emerging

Mother-and-baby specialty stores (approximately 30,000 major chain and independent stores nationwide) account for approximately 40%–45% of sales; comprehensive e-commerce approximately 25%–30%; content e-commerce (Douyin, Xiaohongshu) approximately 10%–15%; supermarkets approximately 10%; cross-border e-commerce (bonded direct mail) approximately 5%–8%.

六　Key Enterprises: Feihe Leading a Multi-Player Landscape with Full Financial Analysis

6.1 China Feihe (HK 6186) — The Flagship Under Pressure and Seeking Breakthrough

Feihe is the absolute leader in China's infant formula market, No. 1 in China sales volume for seven consecutive years and globally for four consecutive years. FY2025 full-year revenue: RMB 18.11bn (down ~12.7% vs FY2024's RMB 20.75bn); net profit: RMB 2.09bn (down ~43% vs FY2024's RMB 3.65bn); gross margin maintained above approximately 60%.

The three core causes of revenue and profit decline: (1) 2025 births fell sharply to 7.92mn, directly shrinking demand; (2) intense market competition and price concessions to maintain share; (3) additional expenses from the RMB 1.2bn birth subsidy plan and overseas expansion.

Feihe's ultra-premium products (above RMB 400/can) reached RMB 7.14bn in FY2024, up 19.6% year-on-year, making them the fastest-growing part of Feihe's portfolio. The "all-age nutrition" strategy (including adult milk powder, senior formula, and specialist nutrition) is Feihe's core strategic response to the contraction of the infant formula market.

6.2 Ausnutria (HK 1717, Yili-affiliated) — Global Leader in Goat Formula

Ausnutria's core brand Kabrita (Jiabeiaituo) holds No. 1 in global goat formula sales volume for seven consecutive years. FY2025 full-year revenue: RMB 7.488bn (+1.2% year-on-year). Domestic market revenue RMB 2.579bn (-15%), while international business revenue ~RMB 974mn (+50.7%); Middle East revenue +65.5%, CIS +40.1%. International business growth rate exceeding 50% compound over three years has become the group's most important growth driver.

6.3 Yili (600887) — Jinlingguan's Double-Digit Growth Logic

Yili's infant formula brand Jinlingguan is China's second-largest domestic infant formula brand. FY2024 milk powder and dairy products revenue: RMB 29.675bn (+7.53%), with Jinlingguan infant formula achieving double-digit growth — a rare performance against the industry trend of overall market decline.

6.4 Mengniu (HK 2319) — Infant Formula Remains a Weak Point

Mengniu's infant formula lines include the self-owned "Ruibuen" brand and Bellamy's Organic (acquired from Australia in 2019). FY2024 group revenue: RMB 88.675bn (-10.1%); net profit: approximately RMB 105mn (-97.8%), with the near-total profit collapse primarily attributable to Bellamy's goodwill impairment of approximately RMB 3.6bn.

6.5 Junlebao — The "Third Major" Dairy Company's IPO Narrative and Formula Pressure

Junlebao submitted its A1 prospectus to the Hong Kong Stock Exchange in early 2026. FY2024 full-year group revenue: approximately RMB 19.8bn (+13%), but infant formula revenue approximately RMB 5.371bn, slightly declining year-on-year. Formula pricing targets the domestic "value premium" positioning.

6.6 Beingmate (002570) — From "First Listed" to Near Restructuring

Beingmate, once China's "first listed infant formula stock," FY2024 revenue RMB 2.773bn (+9.7%), net profit RMB 103mn (+116.92%). In July 2025, the controlling shareholder filed for pre-restructuring due to a liquidity crisis, placing the brand's future ownership in question.

6.7 H&H International (HK 1112) — Ultra-Premium Formula and Health Products Dual-Wheel

H&H's FY2024 full-year revenue: RMB 13.05bn (-6.3%). BNC (Baby Nutrition & Care) business revenue RMB 4.38bn. Biostime's ultra-premium market share rose counter-cyclically from 12.4% to 13.3%, demonstrating strong retention among its target consumer base despite an overall ultra-premium market contraction of 17.7%.

七　Industrial Geography: Milk Supply and Production Footprint from Heilongjiang to the Netherlands

7.1 Heilongjiang: Feihe's Foundation and China's Premium Milk Source Region

Heilongjiang's Kedong County, part of the 47°N Golden Milk Belt alongside the Netherlands (52°N), New Zealand (37°S), and Normandy France (49°N), provides superior conditions for infant formula milk supply. Feihe's 600,000+ mu forage base, modern enclosed pastures, and co-located wet-process factory form an integrated system that is difficult to replicate within any short timeframe.

Heilongjiang Province has designated the infant dairy products industry cluster as a key provincial cultivation industry, with a target of exceeding RMB 50bn in industry scale by 2030.

7.2 Inner Mongolia: Yili and Mengniu's Milk Supply Base

Inner Mongolia's Hohhot (Yili headquarters) is China's largest cattle-breeding province. Yili's Jinlingguan infant formula production line sources exclusively from designated Inner Mongolia core pastures ("Jinlingguan exclusive pastures"), separated from the liquid milk milk pool to support the "high-quality raw material" brand narrative.

7.3 Netherlands: The Most Important Milk Source Country for Imported Premium Formula

The Netherlands is one of the world's most important exporters of premium infant formula ingredients and finished products. Representative enterprises include FrieslandCampina (Friso, full Dutch production chain), Ausnutria's Hyproca factory (Dutch goat milk powder), and Kabrita's Dutch OACC organic certified pastures.

7.4 New Zealand and Australia: Home of a2 Milk and Bubs

New Zealand's Fonterra supplies Feihe and a2 Milk with premium raw materials through the world's largest dairy cooperative. a2 Milk's 2025 acquisition of the Yashili NZ factory further deepens its control of local production capacity. Australia's ACO organic certification system supports Bubs' organic goat formula and Mengniu Bellamy's Organic.

7.5 France and Ireland: Danone Aptamil's European Foundation

Danone Aptamil's main raw materials come from Brittany, France and western Ireland. Danone's LactoLabo research team in France conducts long-term research on HMOs and prebiotics' effects on infant gut microbiota.

7.6 Southeast Asia and the Middle East: Core Target Markets for Domestic Brand Overseas Expansion

Southeast Asia (Indonesia ~4mn births/year, Vietnam ~1.2mn, Philippines ~1.6mn, Thailand ~600K) and the Middle East (Saudi Arabia ~500K, UAE ~170K) are core targets for China's brand overseas expansion. Tianxia Gongchang covers 4.8 million genuine active Chinese factories including large numbers of B2B suppliers across the infant formula supply chain — from pasture equipment manufacturers (milking robots, TMR feed vehicles, farm management systems), spray-dryer manufacturers, filling-capping equipment suppliers, food-grade metal can packaging factories, infant formula testing and certification service providers, to the many specialty chemical enterprises involved in infant formula-related materials (emulsifiers, mineral premixes, probiotic powders). In an era of declining birth rates and accelerating competitive restructuring, precise factory-level customer data is one of the core tools for B2B enterprises in this supply chain to achieve efficient market reach.

八　Subcategory Deep Dives: Goat Milk, Organic, Cross-Border, and Channel Analysis

8.1 Cow Milk Formula Premiumization and the Ultra-Premium Segment

Feihe's ultra-premium product revenue reached RMB 7.14bn in FY2024, up 19.6% year-on-year. Danone Aptamil Essensis achieved double-digit growth in H1 2025. H&H Biostime's ultra-premium share rose counter-cyclically from 12.4% to 13.3%.

Ultra-premium formula's ingredient technology competition has reached unprecedented depth: products with "6-type HMO" formulas (3 fucosyl HMOs + 3 sialyl HMOs) have appeared in 2025, more fully replicating the HMO combination naturally present in human milk.

8.2 Goat Milk Formula: A RMB 20bn Subsegment's Moat and Challengers

China's infant goat formula market has been in rapid expansion since 2015, growing from approximately RMB 3bn to RMB 16.7bn in 2023, a CAGR of approximately 25%. It is projected to surpass RMB 20bn in 2025. Kabrita holds approximately 84% of China's imported infant goat formula market (by both volume and value), a near-monopoly position that underpins its sustained profitability. Challengers include Bubs Australia, Heshi Dairy, Yipin Dairy, and Feihe's goat formula series.

8.3 Organic Formula: Global CAGR 7.6% Sustained High-Speed Growth

The global mild organic infant formula market was approximately USD 3bn in 2024, projected to reach nearly USD 5bn in 2031, CAGR approximately 7.6% (2025–2031). China's organic infant formula consumption penetration is currently approximately 5%–8%, with growth significantly faster than the industry average. Representative products include FrieslandCampina Friso Chun Yue Organic, Feihe Xingrui Organic, Mengniu Bellamy's Organic, imported HiPP Bio (Germany), and Holle (Netherlands).

8.4 Cross-Border Daigou Market: Premium Demand in a Regulatory Gray Zone

Cross-border infant formula channels include bonded cross-border e-commerce (Tmall International, JD International), cross-border direct mail, and daigou (personal importers). Popular cross-border products include Germany's HiPP Bio, Netherlands' Holle, Japan's Snow Brand Megmilk, and European versions of Aptamil. Regulations have been tightening since 2024, targeting the daigou gray market while protecting legitimate bonded channels.

8.5 Mother-and-Baby Store Channel: Deep Restructuring and the Way Forward

Head mother-and-baby chain stores (Kidswant ~570 stores, Aiyingshi ~350 stores, Leyou International ~500 stores) maintain their irreplaceability through "in-store experience + professional services + community operations." Brand operating costs in this channel (sales incentives for floor staff, display fees, promotional fees) account for approximately 30%–40% of infant formula selling expenses, but single-customer value is high (primary sales scenario for ultra-premium products) and stickiness is strong.

九　Technology Evolution: The Formula Revolution from Dry to Wet Process, from DHA to HMO

9.1 The Essential Difference Between Dry and Wet Processes

Dry blending mixes nutrient dry powders with base milk powder at ambient temperature. Lower upfront equipment investment; suitable for heat-sensitive components (probiotics, certain vitamins). Disadvantages include less uniform micro-nutrient distribution and lower product solubility than wet process.

Wet process (spray drying) dissolves all raw materials in a liquid medium, then spray-dries them in a sealed tower. Advantages: extremely uniform nutrient distribution at the molecular level, superior solubility, better retention of active components (immunoglobulins, lactoferrin) under low-temperature spray drying.

9.2 OPO Structured Lipids: The Absorption Revolution

OPO (sn-2 palmitate, also called structured triglyceride OPO) addresses the difference between human milk (approximately 70% of palmitic acid at the sn-2 position) and conventional vegetable oil (palmitic acid mainly at sn-1/3 positions). The sn-1/3 positioned palmitic acid can form insoluble calcium soaps ("calcium soap") in the infant gut, causing hard stools ("stool hoarding"). OPO structured lipids are the direct solution. A 2020 meta-analysis in Nutrients (21 randomized controlled trials) demonstrated that high-OPO formula feeding results in softer stools, more frequent bowel movements, lower fecal calcium content, and higher calcium absorption rates.

9.3 HMO Human Milk Oligosaccharides: The Core of the Next Decade

HMOs are the third largest solid component in breast milk by concentration (approximately 12–14g/L), proven to play crucial roles in early infant development: gut microbiome colonization (acting as exclusive "food" for Bifidobacterium infantis and similar), immune system development (modulating innate and adaptive immunity), and brain development (certain sialyl HMOs are related to ganglioside synthesis and synaptic development).

Currently approved for addition in China's infant formula market include: 2'-fucosyllactose (2'-FL), lacto-N-tetraose (LNnT), 3-fucosyllactose (3-FL), 3'-sialyllactose (3'-SL), and 6'-sialyllactose (6'-SL). Global leading brands have launched products with 6 types of HMO. HMO raw material costs are currently high (approximately 10–100 times conventional prebiotics GOS/FOS), but are expected to decline significantly as biosynthesis scales up by 2027–2030.

9.4 A2 Protein: A Patented Moat Mature Over Five Years

a2 Milk's A2 protein formula, based on the scientific distinction between A1 and A2 beta-casein types and the associated digestive tolerance research, has evolved in China from a niche cutting-edge track to a mainstream premium sub-branch. The A2 protein subsegment's share of China's infant formula market value reached 20% in 2025, growing at approximately 14% year-on-year.

9.5 Probiotics and Prebiotics: Multi-Dimensional Combinations of Synergistic Nutrition

H&H Biostime's proprietary probiotic formula (core strain B. breve M-16V, exclusively licensed from France's BioCodex) and its clinical evidence base built over more than 20 years of investment represent a deep scientific moat. Danone Aptamil's Essensis platform combines GOS/FOS prebiotic combinations (8:1 ratio, patented formula) validated in clinical research with the latest HMO research. The commercialization of HMOs has further enriched the prebiotic functional landscape.

9.6 Blockchain Traceability and Full-Chain Digitalization

Feihe's "one code per can" full-chain traceability system based on blockchain technology allows consumers to trace all the way to the specific pasture (GPS location), specific batch of cattle (lactation records), specific spray-drying date, and specific factory inspection report (containing 300+ indicator details) by scanning the can's QR code.

十　Risk Matrix: Triple Pressure of Birth Rates, Food Safety, and Price Wars

10.1 Sustained Birth Decline: Long-Term Ceiling Risk for Market Scale

2025 births fell to 7.92mn, a historic low. Even in the most optimistic policy scenario, births are likely to remain in the 700–900mn range before 2030. This means the basic demand pool will continue to contract, and the industry must maintain revenue scale through per-unit price increases (premiumization), product line extension (children's and adult nutrition), and overseas expansion.

10.2 Ongoing Compliance Pressure and Technology Gap Risk from New National Standards

Every formula adjustment (adding a new HMO type, introducing a new probiotic strain, changing an OPO supplier) must go through the formula registration process again, typically taking one to two years, creating significant product iteration lag costs.

10.3 Tail Risk of Food Safety Incidents

In the era of highly transparent social media, any food safety incident can trigger a large-scale consumer panic within hours and a catastrophic brand crisis. Leading enterprises' 300+ factory inspection indicators, rapid response mechanisms (30-second brand PR), and full-chain traceability systems (batch-level recall capability) are the most important moat against this tail risk.

10.4 Price Wars: The Inevitable Result of Stock Competition

The most intense price war in infant formula industry history was triggered in 2023–2024 by market contraction combined with new national standard transition period inventory overhang. Discount intensity reached 40%–50% for some brands, severely squeezing industry profits. The Research Institute predicts that the price war will ease as inventory clearing completes and competitive structure further stabilizes in 2026–2027.

10.5 Channel Transformation Risk: Power Shift from Mother-and-Baby Stores to Live-Stream E-Commerce

The migration of channel power toward e-commerce platforms and content platforms represents a real challenge to the brand control logic of enterprises (such as Feihe and Yili Jinlingguan) highly dependent on mother-and-baby store channel operations.

10.6 Substitution Effect of Breast Milk Formula vs. Breastfeeding Rates

Breastfeeding rates in Tier 1 cities have risen from approximately 27% in 2015 to approximately 50% in 2023, creating structural volume compression in the Stage 1 market. Brands must weight their strategies more toward Stage 2, Stage 3, and older-children formula to compensate.

十一　2026–2030 Outlook: Structural Opportunities in Stock-Market Competition

11.1 Market Scale: A Moderate Decline Followed by a Platform Period

Based on birth population trends (projected 700–900mn/year in 2026–2030), continued premiumization (ultra-premium share rising from 30% to 40%–45%), and continued concentration gains, the Research Institute projects:

  • 2026E: RMB 105–115bn
  • 2027E: RMB 100–110bn (trough range)
  • 2028E: RMB 100–110bn (stabilizing)
  • 2029–2030E: RMB 105–115bn (moderate recovery)

Overall CAGR 2025–2030: volume dimension ~-3% to -1%, price dimension ~+2%–4%, combined value CAGR approximately -1%–3%. A potential inflection point may appear around 2028–2029.

11.2 Domestic Brands: Market Share to Break Through 75%–80%

Domestic brand market share is projected to rise from approximately 70%–75% in 2025 to approximately 75%–80% by 2030, driven by continued registration system strengthening, domestic R&D capability improvement, and channel deepening.

11.3 Goat Milk and Organic: Breaking the 30% Market Penetration Threshold

The combined market scale of goat formula and organic formula (currently ~RMB 25–30bn, approximately 20%–25% of infant formula total) is projected to exceed RMB 45bn by 2030, with combined penetration rising from approximately 20%–25% to approximately 30%–35%. CAGR approximately 8%–12%, the most certain structural increment in the industry.

11.4 Overseas Expansion: The Second Growth Curve for Domestic Brands

Combined overseas infant formula revenue for leading domestic brands is projected to grow from currently approximately RMB 2–3bn to over RMB 10bn by 2030, with Feihe and Ausnutria as the primary contributors. Southeast Asia and the Middle East are the most realistic incremental markets.

11.5 CR10 Concentration: Approaching 95% in the Ultimate Oligopolistic Structure

By 2030, the top 10 brands' combined share is projected to approach 93%–95%. 10–20 additional brands are expected to exit the market between 2025 and 2030.

11.6 Technology Direction: Full-Spectrum HMO, Precision Nutrition, and Sustainable Production

Key technology competition directions for 2026–2030: full-spectrum HMO formulas evolving from 2–6 types toward 10+ types; personalized precision nutrition (infant gut microbiome analysis, genetic polymorphism assessment, digital growth tracking); and sustainable production and carbon footprint management (ESG reporting requirements and consumer green awareness).

十二　Conclusions: Long-Termism in a Can of Formula

12.1 Core Conclusions

China's infant formula industry is undergoing a historic transformation in which "volume contraction" and "quality upgrading" are occurring simultaneously. Market total is shrinking while internal structure is profoundly evolving. Under the institutional constraints of the formula registration system, market concentration will continue to rise, and the medium-to-long-term competition between leading players will enter a more refined new phase — no longer driven by channel coverage and advertising saturation, but by the depth of formula technology iteration, precision consumer communication capability, and control of global supply chains.

The rise of domestic brands has evolved from "weak-side recovery" to "structural advantage." Feihe's Heilongjiang milk supply moat and ultra-premium product portfolio, Yili Jinlingguan and Ausnutria Kabrita's dual-brand matrix, and Junlebao's channel control in lower-tier markets — the depth of these three moats already transcends mere brand recognition; they represent genuine supply chain capability, R&D depth, and channel cultivation.

Tianxia Gongchang covers 4.8 million genuine active Chinese factories, including large numbers of B2B suppliers in the infant formula supply chain — from pasture support equipment manufacturers (automated milking systems, TMR feed vehicles, farm information management systems), spray-dryer equipment suppliers, filling-capping equipment suppliers, food-grade metal can packaging factories, and infant formula testing and certification service providers, to the many specialty enterprises involved in infant formula-related materials. Against the backdrop of declining birth rates and accelerating competitive restructuring, B2B enterprises in the infant formula supply chain can leverage precise factory-level customer data to achieve efficient reach and be the first to secure quality target customers in stock-market competition.

12.2 Summary of Core Judgments

  1. Market scale: ~RMB 110–126bn in 2025; stabilizing at ~RMB 105–115bn by 2030; moderate decline without collapse risk; premiumization is the core path to offsetting volume contraction.
  2. Domestic dominance: Domestic brand market share to reach 75%–80% by 2030, with formula registration as the most important institutional safeguard.
  3. Ultra-premium growth: Ultra-premium and premium combined market share projected to exceed 45% by 2030; unit price increases are the primary mechanism for maintaining industry revenue scale.
  4. Goat milk and organic: Combined CAGR approximately 8%–12%; the most certain structural increment in the industry; combined penetration to reach 30%–35% by 2030.
  5. CR10 approaching 95%: Highly concentrated market structure is irreversible; 10–20 brands expected to exit by 2030.
  6. Overseas expansion as the second curve: Southeast Asia and Middle East are the most realistic incremental markets; leading brands' combined overseas infant formula revenue likely to surpass RMB 10bn by 2030.
  7. Feihe faces renewed pressure: Net profit halved in FY2025 (RMB 2.09bn vs FY2024 RMB 3.65bn); medium-term focus on all-age nutrition and overseas expansion second curve realization speed.
  8. Danone Aptamil as the strongest imported brand counter-player: Using ultra-premium scientific differentiation as its core, it continues to gain share even as the overall market declines.

Data Sources

  1. China Feihe (HK 6186) FY2025 Annual Results Announcement (Revenue RMB 18.11bn, Net Profit RMB 2.09bn) — HKEX https://www.hkex.com.hk/
  2. Ausnutria Dairy (HK 1717) FY2025 Annual Results Announcement (Revenue RMB 7.488bn, Kabrita International Revenue +50.7%) — HKEX https://www.hkex.com.hk/
  3. Yili (600887) 2024 Annual Report (Milk Powder and Dairy Revenue RMB 29.675bn, Jinlingguan Double-Digit Growth) — SSE https://www.sse.com.cn/
  4. H&H International (HK 1112) FY2024 Annual Results (Revenue RMB 13.05bn, BNC RMB 4.38bn) — HKEX https://www.hkex.com.hk/
  5. Junlebao A1 Prospectus (First Three Quarters Revenue RMB 15.1bn, FY2024 RMB 19.8bn) — HKEX https://www.hkex.com.hk/
  6. Beingmate (002570) 2024 Annual Report Summary (Revenue RMB 2.773bn, Net Profit RMB 103mn) — SZSE https://www.szse.cn/
  7. National Bureau of Statistics: 2025 National Population Statistics (Births 7.92mn, Birth Rate 5.63‰) https://www.stats.gov.cn/
  8. National Bureau of Statistics: 2024 National Population Statistics (Births 9.54mn) https://www.stats.gov.cn/
  9. SAMR Infant Formula Registration Announcement (1,276 valid formulas, 77 newly approved in 2025) https://www.samr.gov.cn/
  10. Taiqing Testing "2025 Infant Formula Registration Review" https://www.hntqtest.com/
  11. Baobei360 "New National Standard Three Years In: 1,276 Infant Formula Products Pass Registration" https://m.baobei360.com/
  12. DairyReporter "How is China's infant milk formula market shaping up in 2025?" https://www.dairyreporter.com/
  13. NutraIngredients "China's infant formula sales up for major players in first half of 2025" https://www.nutraingredients.com/
  14. NutraIngredients "HMOs infant formulas gain traction in China, Vietnam amid regulatory interest" https://www.nutraingredients.com/
  15. NutraIngredients "a2MC doubles down on China label infant formula with new plant purchase" https://www.nutraingredients.com/
  16. NutraIngredients "The a2 Milk Company to enter China's pediatric supplements market" https://www.nutraingredients.com/
  17. Gonyn.com "2025 China Infant Formula Market Scale ~RMB 130bn" https://www.gonyn.com/
  18. Qianzhan "2025 China Mother-and-Baby Subsegment Analysis: Infant Formula Market Intensely Competitive" https://www.qianzhan.com/
  19. 21Jingji "Yili, Mengniu 'Battle' Infant Formula Market: Each Wrote Off Over RMB 3bn in Goodwill" https://www.21jingji.com/
  20. Ausnutria Official Announcement "Kabrita Global Goat Formula Market Share Over 60%" http://ausnutria.com/
  21. Chinabgao "2025 China Infant Formula Market Scale Projected at RMB 125.554bn" https://m.chinabgao.com/
  22. iMedia Research "2024–2025 China Goat Milk Formula Market Consumer Trend Insights Report" https://www.iimedia.cn/
  23. Chyxx "2026–2032 China Infant Formula Industry Competitive Dynamics and Development Strategy Analysis Report" https://www.chyxx.com/
  24. Nfcmag "Consumer Reference: Imported Formula Sales Recovering in China, Ultra-Premium Sells Better" https://m.21jingji.com/
  25. Danone Official: Q1 2025 Professional Nutrition Double-Digit Growth https://www.danone.com/
  26. FrieslandCampina Official: H1 2025 Professional Nutrition Revenue +18.1% https://www.frieslandcampina.com/
  27. Sina Finance "Feihe 2025 Revenue RMB 18.11bn Net Profit RMB 2.09bn, 7 Consecutive Years China Sales No.1" https://finance.sina.com.cn/
  28. Eastmoney "Ausnutria 2025 Revenue RMB 7.488bn, International Business the Core Engine" https://finance.eastmoney.com/
  29. Heilongjiang Provincial Government "Qiqihar: Building a 'New Global Infant Dairy Products Highland'" https://www.hlj.gov.cn/
  30. MyGuancha "A Sudden Week: Yili, Mengniu, Ausnutria, H&H International Release Latest Financials" http://www.myguancha.com/
  31. Tencent News "Ausnutria FY2024 Net Profit +35.3%, Kabrita Global Goat Formula Share Over 60%" https://news.qq.com/
  32. Mordor Intelligence "Global Infant Formula Market Size, Growth to 2032" https://www.mordorintelligence.com/
  33. Gelonghui "2025 Global and China Mild Organic Infant Formula Market Research" https://m.gelonghui.com/
  34. The Paper "Junlebao Submits A1 Form to HKEX: First Three Quarters Revenue RMB 15.1bn" https://www.thepaper.cn/

This report was compiled by the Industry Research Institute. Data current as of June 2026. Tianxia Gongchang covers 4.8 million genuine active Chinese factories, providing precise factory-level data for B2B sales across the infant formula supply chain — helping suppliers efficiently reach quality target customers in an era of stock-market competition. Report content is for research reference only and does not constitute investment advice.