Fierce Competition In Milk Powder Market, Flying Crane Wants To Attack The Second Line Milk Powder Market

With the homogenization of the milk powder Market and fierce competition, the high-end milk powder market is placed high hopes, while small brands are facing a crisis of clearing. In the future, more and more strong competition is needed. High-end and ultra high end milk powder is expected to continue to drive the growth of the industry.

Recently, the leading domestic product Heilongjiang feidhe Dairy Co., Ltd. (hereinafter referred to as Feidu dairy industry) announced the first report card after the listing. Data show that in 2019, feidhe realized revenue of 13 billion 722 million yuan, an increase of 32% over the same period last year, and realized a net profit of 3 billion 935 million yuan, an increase of 75.5% over the same period last year. In addition to the double growth of revenue and net profit, Feida dairy industry achieved a gross profit margin of 70% in 2019, an increase of 2.5 percentage points over the same period last year.

As for the reasons for the growth of performance, the financial report shows that one is the growth of the income of Feida flying sails and the ultra high-end organic milk powder products, which has contributed to the growth of the income of high-end infant formula products. Two, the rise of the brand power of Feida crane has contributed to the growth of the income of its ordinary infant formula products; the three is the growth of other dairy products (mainly adult milk powder) of Feida cranes.

In the fierce competition, can the high margin rate of the flying crane industry in the three or four tier cities continue?

According to data, in the past 2016-2019 years, Feida dairy industry's revenue growth rate was 3%, 58.1%, 76.5% and 32% respectively, while the net profit growth rate was 1.2%, 178%, 93% and 75.5% respectively. It can be seen that the growth rate of Feida dairy industry has slowed down in 2019 compared with the rapid growth in 2018.

In this regard, dairy expert Song Liang said that the growth rate of flying crane is not accidental. As a leading enterprise of domestic milk powder, the market share of flying crane in the three or four line cities has been very high, and it has been difficult to realize the rapid growth. More importantly, the current infant formula market is not incremental competition, but stock competition. It is very difficult for enterprises to achieve high growth.

　　 Development of Feida dairy industry

Feida dairy industry started in Qigihar, Heilongjiang, and was founded in 1962. It is one of the earliest milk powder enterprises in China. Feida dairy focuses on the development of infant formula. Its products include "star flying", "super flying sails" and "flying sails". It is known as the safest infant milk powder brand. It is the first infant infant formula company with real industrial chain, and has created 55 years of safe birth record.

In 2008, the outbreak of Sanlu tainted milk powder caused the collective cold of the domestic milk powder brands. The imported milk powder brands occupied the domestic market and seized the trust of consumers. In those years, the domestic milk powder basically drew an equal number with the "unsafe milk powder". In order to cope with the crisis, Feihe dairy industry vigorously excavated the advantages of local resources, and broke the fence in the market of imported milk powder with the slogan of "flying crane, which is more suitable for the milk powder of the Chinese baby", and became the first domestic milk powder brand with a turnover of tens of billions.

It is noteworthy that Feihe dairy industry has always been dominated by three or four line cities, and the second tier market is the world of foreign milk powder enterprises represented by Wyeth, and Feihe dairy industry decides to attack like a second tier market, and is bound to fight a tough battle. In this regard, Fehe stated at the performance briefing that the company started the layout of a second tier city in 2017, and the core of the overall strategy is to focus on attack.

What is the future development of Feida dairy industry? Will there be a shuffle in the domestic dairy market? Let's wait and see.