Liu Chunxi, CEO of Inner Mongolia Yili Industrial Group Co., Ltd.; Member of the Academic Committee of the International Dairy Federation (IDF) China National Committee and Chief Expert of the Marketing Working Committee; Vice President of China National Light Industry Council; Vice President of Dairy Association of China (DAC); Director of the Belt and Road Dairy Alliance, DAC; Expert Member of China Dairy Industry Strategy Committee; Vice Chairman of China Dairy Industry Association; Vice President of China National Food Industry Association; Vice President of China National Advertising Association; and Vice President of China Food and Drug Industries Quality and Safety Promotion Association.
4.2H - Hall A1
The main market for dairy products is shifting to lower-tier cities. Tier-3 and below cities account for 53.6% of dairy shoppers, particularly so for shelf-stable milk, cheese, and infant formula. Well received as refrigerated milk is in tier-1 and tier-2 cities, there is still room to increase the penetration rate.
High-tier cities are approaching channel saturation. Online channels, like PDD, Douyin, and take-outs, accelerate dairy products consumption in lower-tier cities. The number of consumers in tier-3 to 6 cities has surpassed that in tier-1 to 2 cities in 84% categories. Lower-tier cities boast of a large population, and entry-level consumers and young people in small town are exhibiting a stronger spending tendency.
How should dairy brands leverage the massive growth potential in lower-tier Cities?