China’s Booming Dairy Market Amid Evolving Tastes | Tractus


Benefiting from the rapid development of China’s economy and improvements in people’s eating habits, China’s dairy market has grown steadily since the early 90s. The total market size in China reached approximately US$68.2 billion (RMB498.1 billion) in 2022. However, the amount of annual dairy consumption per capita in China was only 50kg in 2022, still lagging compared to the level of developed countries such as Europe and the United States – In 2021 that figure jumped to 667 pounds (302.5kg) in the United States. However, recent government campaigns in China have touted the health benefits of dairy products, advocating for increased consumption. Meanwhile, public health awareness has gradually improved,  especially since the COVID-19 outbreak, which further elevated consumers’ health consciousness. Given these factors, the growth outlook for China’s dairy market is optimistic.

Source:; MarketIDX

Besides supermarkets and grocery stores, online shopping platforms play a vital role in distribution in China. In 2022, the retail dairy product sales from online channels accounted for nearly 20%. As the penetration of online channels deepens, different digital marketing methods including short videos, live broadcasts, and private domains support dairy companies to achieve promotion goals.

The consumption scenarios of dairy products in China have diversified vastly over the past few years catering to different demands – in addition to the familiar breakfast scenario, dairy products have also gained popularity in the sports and fitness scenes. Nowadays, dairy companies in China are expanding their offerings to the target market by introducing additional functional products through formula and process upgrades. For example, they offer meal-replacement milkshakes for weight loss groups, as well as digestive aid milk products for children and the elderly. The launch of innovative products not only enriches consumers’ choices but also accelerates the formation of market segmentation.

People aged between 21-35 years old are the main purchasing group in the dairy market. After the COVID-19 outbreak, Chinese consumers’ consumption concepts and shopping behaviors underwent considerable changes. Consumers now yearn for healthier, more diversified, and higher-quality dairy products. Currently, liquid milk dominates the dairy market in China. The production and import volume of dry dairy products such as milk powder, cheese, and condensed milk in China have been increasing in the past few years. Cheese, as an important emerging market, is expected to become the fastest-growing window of opportunity in China’s dairy market.

Source: MarketIDX
Source: Trade Data Monitor  

The evolution of consumption habits in China coupled with the increasing awareness of public health is untapping new opportunities in the dairy market. The market is generally shifting from scale growth to product upgrades, paving the way for high-end, healthy, and functional dairy products to carve out a place in the market. In order to be competitive, dairy companies should pay more attention to production and quality assurance and enhance ingredient promotion and consumer education in the China marketing process.

Facing the increasingly competitive domestic Chinese dairy market, international dairy companies interested in entering the market need to better understand the changing consumption trends and the diversified market demand. Tractus has over 25 years of experience advising our public and private sector clients on their market expansion strategies and implementation plans, from developing tailored market research reports and identifying opportunities for growth to designing market entry strategies and supporting distributor identification and qualification, sales outsourcing, and entity establishment. Contact us today to learn more about how we can help your business achieve success in China.

To get more insights on our work in the dairy industry, read about how we helped U.S. Dairy Export Council (USDEC) open their first Center of Excellence in Singapore.

Authored by

Miranda Dai is Senior Research Analyst based in our China office (Shanghai).

Latest Insights

Cash-Rich MNCs Eye Acquisitions in Southeast Asia and Taiwan in 2024 as Family Business Valuations Ease

Cash-rich multinational corporations (MNCs) are increasingly looking towards Southeast Asia and Taiwan for potential acquisition ...

India’s Medical Device Sector: Market Insights and Opportunities for Foreign Investors

The medical device sector in India is currently experiencing more growth than it has seen in the last decade due to the diversified ...