Irish baby formula has rare edge in China's consumer market
Ireland's bet on China as a key market for infant formula sales is borne out by research showing its one of just two consumer categories where Chinese shoppers think foreign products are superior.
Along with wine, infant formula is one of just two segments where more Chinese buyers (52pc) said they prefer (27pc) or somewhat prefer (26pc) foreign brands to their domestic alternatives.
Only 9pc of consumers expressed a preference for fresh fruit and poultry from abroad.
The preferences in part reflect the growth of a generation of post 1990s of consumers, who are reshaping buying habits in the world's most populace country.
In their latest survey McKinsey has identified four key trends among Chinese consumers, which will help companies formulate their operational strategies in China.
Across the majority of categories surveyed, brand origin matters less than before to Chinese consumers, once consumers feel that they are getting value for money. In eight of the 17 consumer categories surveyed by McKinsey, respondents showed a preference for local brands over foreign brands - citing local brands' edge in terms of value, quality, and after-sales.
Amongt the exceptions is non-domestically produced infant formula, which commands a premium in Asia among the growing middle classes.
Ireland is primed to capitalise on this market, producing 10pc of all infant formula consumed across the world, according to figures from Bord Bia.
Ireland is the second largest supplier to China - after the Netherlands. Danone, Abbott and Wyatt, three of the biggest infant formula producers in the world manufacture here and buy their milk in the Irish market.
One of the fastest-growing and increasingly influential segments in China is, what McKinsey refer to as the "post-90s" generation of people born between 1990 and 1999. Unlike their parents, they've grown up as China's economy raced ahead, with greater wealth, exposure to Western culture, and access to new technologies.
This generation makes up 16pc of China's overall population today, but McKinsey expect it to account for more than 20pc of consumption growth in the country between now and 2030.
Just over 50pc of those surveyed in this generation said that they were not concerned about brands, but the actual product, suggesting that product quality rather than branding is becoming increasingly important.
Consumers in China remain confident and as a result of this, are willing to spend more on discretionary items. However, despite the consumer confidence, McKinsey warns that risks remain, including concerns high levels of debt that the economy and households are taking on.
In addition, income growth has slowed, easing to 6.3pc in 2016, from 10.1pc in 2012.
A final trend highlighted by the survey is that consumers in China are more becoming more health conscious.
Two-thirds of the survey respondents saying that they are seeking ways to lead a healthier lifestyle, although only around 30pc of Chinese adults are overweight.
McKinsey surveyed nearly 10,000 consumers aged between 18 and 65 took place across 44 cities and seven rural villages and towns in China.