Facing margin cuts, dairy firms shift to healthy products

Some Chinese dairy producers have seen gross profit margins of their infant formula milk powder products continue to decline due to the impact of foreign brands, high costs and inventory pressures. So, more producers are trying to target healthy products.

The two-child policy in China didn't trigger sales growth of the domestic dairy sectors, which had their growth dampened by the boom in cross-border e-commerce, price competition and other factors.

In the first three quarters of 2016, Biostime International Holdings Ltd, a Chinese nutrition and baby care products provider, saw its sales of infant nutrition and care products drop to 2.76 billion yuan ($400 million), a 3.3 percent year-on-year fall. The drop is mainly due to declining sales of middle quality infant formula milk powder products, according to the company.