Consumer discretionary spending growth remained close to recent levels in September, according to our latest monthly survey of 1,000 Chinese consumers, despite a moderation in household income growth and consumer confidence and an increase in living costs. 

Yashili’s revenue has fallen on increased competition in its core lower-tier markets from both international and domestic players, while its strategic shift away to its e-commerce channel is taking time to gain traction.

Beingmate saw sales, margins and popularity decline YoY in 1H14, but a shift in strategy and market dynamics should drive a rebound moving into 2015.

While last year’s Fonterra recall damaged both sales and margins, a rebound in popularity and improved product mix bode well for the French dairy company’s China operations.

China’s largest infant milk formula producer by revenue remains strong, but is facing significant challenges in remaining number one given strengthening competition from multinational rivals, sluggish development of its online channels and regulatory headwinds.

Multinational brands continue to dominate China’s infant milk formula market and rapid online channel expansion is likely to support further growth for these companies. However, industry consolidation and supportive government policies could boost larger domestic formula-makers in the medium term.

Each quarter, China Confidential surveys around 2,000 Chinese urban, middle-class consumers in more than 100 cities nationwide on their brand preference and spending behaviour across a range of products.

Huishan Dairy has grown rapidly, supported by heavy advertising and quality control advantages, and we expect growth to remain strong, though investment plans and competition may weigh on margins in the short term.