29 Jan 2020
Posted in Consumer
South Korea baby milk market expected to reach US$381m by 2023, says GlobalData
The South Korean infant milk market, which was US$354m in 2018, is expected to reach US$381m by 2023 at a compound annual growth rate (CAGR) of 2.7%, says GlobalData, a leading data and analytics company.
Among the Asian countries, South Korea holds third position in terms of percentage of premium baby milk in the overall baby milk market. It has approximately 45% of overall baby milk market as premium market. As per 2018 Q4 survey conducted by GlobalData, 63% of South Korean respondents stated that they are willing to pay more for better quality baby products.
Dharma Teja, Consumer Insights Analyst at GlobalData, says: “Increasing gross domestic product (GDP) per capita and rising middle class urban population are creating enough room for parents to spend more on their kids. Although falling birth rates are appearing as a major hindrance for market, manufacturers want to capitalize on the existing premium market by launching new products.”
Recently, New Zealand-based a2 Milk Company has expanded its existing baby milk portfolio in South Korea by launching ‘a2 Platinum infant and toddler range’, which is a premium offering. Keeping up with the trend, IlDong Foodis, which holds approximately11% value in baby milk market, launched ‘True Mom Premium fresh’ and ‘Premium goat milk infant formula’ in recent past.
The presence of the import brands has been rising gradually in the market, where most of these brands are premium and found in online stores. As Korean parents seek the US and European standards due to their reputation of being healthy and safe, market for these products holds potential.
Dharma Teja concludes: “Falling birth rates is one of the major constraints that market is facing currently, but the government is taking measures to overcome this problem. Some of the few measures taken by government are increasing the duration of maternity and paternity leave, raising maternity pay, reducing work hours for pregnant woman and state subsidies on children education. Over the past decade, the government had spent a total of US$129bn on measures to improve the population growth and it is optimistic about seeing turnaround in birth rate very soon. This is likely to impact baby milk manufacturers positively.”