A crisis has emerged that about a third of the milk powder market could evaporate in China, where the population declined for the first time in 61 years due to a decline in birth rates.On the 23rd, Ada Lee, an analyst at Bloomberg Intelligence (BI), an economic research institute under Bloomberg, predicted that the size of China's milk powder market based on retail prices will be reduced from 173 billion yuan (about 31.5 trillion won) in 2021 to 1,170 billion yuan (about 21.3 trillion won) in 2025. The size of the market could decline by 32.3% in four years.These forecasts are based on a situation where the birth rate has decreased by 10% each year while the selling price remains at the current level. In fact, China's National Bureau of Statistics data showed that the number of Chinese births was 9.56 million last year, down 9.98% (1.06 million) year-on-year. The number of births per 1000 people was 6.77, down 0.75 from the previous year.The decline in birth rates is a crisis in the baby products market, including milk powder. This is because it is impossible to make up for the price just because sales are decreasing as the competition between milk powder companies is fierce over the smaller pie. The report also mentioned the possibility that the Chinese government, which emphasizes raising fertility rates, will not tolerate price increases.
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