Changes Of Online Traffic and Conversion Rate Of Baby Food During The Epidemic Period

By Lucy

13:25:00, Mar. 8, 2020


The Coronavirus 2019 (COVID-19) exerts different influences on different categories of goods. Most Maternal and infant products, such as milk powder, are the necessities, and which got the lest influence from the COVID-19. After the epidemic, the milk powder market will usher in a turnaround. Experiences of milk powder companies during the epidemic have suggested that companies that can better use new technology and the big data get more opportunities.


The Coronavirus 2019 (COVID-19) exerts different influences on different categories of goods. Most Maternal and infant products, such as milk powder, are the necessities, and which got the lest influence from the COVID-19. After the epidemic, the milk powder market will usher in a turnaround. Experiences of milk powder companies during the epidemic have suggested that companies that can better use new technology and the big data get more opportunities.


The impact of COVID-19 on milk powder industry


Judging from the current situation, offline sales are most affected by the fact that most stores did not open or had a short running time during the epidemic. There’s no communication between customers and the staff any more, and customers just come and leave with goods they want. Some areas are also affected by the logistics and the shortage of inventory. However, one thing to mention is that the milk powder market has not been affected much.


From the data published by Alibaba, the number of daily visitors to baby food in 2020 has increased from 1.1 million in 2019 to 1.8 million, which was promoted by the development of the whole e-commerce. The suspension of shipments during New Year’s Festival, the traffic drops to about 0.6 million (a drop of 66.66%). After the Festival, the number of visitors increased to 1.67 million, a decrease of 7.22% compared to the data before the turn of year. The change is small.


Milk powder and complementary foods are the necessities. Thus, even under the epidemic, the traffic just declines slightly, a decrease of 7.22% compared to the data before the turn of year. In terms of sale, compared to milk powder, the situation of complementary foods is not optimistic. After the New Year’s Festival, the sales of milk powder have basically returned to that before the turn of year, but the daily sale of complementary foods has dropped from 9.5 million before the turn of year to about 0.6 million, dropped by 16 times. Festival has been over, but under the impact of the epidemic, the daily sale of complementary foods just returns to 4.7 million, a decrease of 50.52% compared to the data before the turn of year, which indicates that the epidemic has a greater impact on complementary foods.


At the same time, we can find that although offline sales are greatly affected, the most affected areas are the logistics and the terminal distribution in third and fourth markets, and the first and second ones were less affected. At the same time, brands with better online layouts like a2, Aptamil, Friso, Wyeth and Firmus have benefited more and their sale keeps growing.


Reflections: the lessons to milk powder companies 


The epidemic tested all milk powder companies, distributors and big chain brands of Maternal and infant products. To a large extent, it also tested some of our logistics and distribution systems and some of our business models. It also reflects the current problems of some milk powder companies. For example, the dependence of logistics and terminal distribution systems on the third-party and little attention paid to the construction of membership system etc. Perhaps after this epidemic, the milk powder market will accelerate its upgrading in these aspects.


1. Rapid online and offline integration


Through this epidemic, we will find that the proportion of online and offline transactions is increasing. “House economy” makes customers be more dependent on online shopping platforms like various fresh food e-commerce and O2O platforms. Song Liang, a senior industry analyst said that “for the traditional Maternal and infant industry, what needs to be achieved is to establish an effective combination of online and offline business and to apply more efficient online activities to solve the trading problem and the issue of consumption. Meanwhile, we should make use of offline specialization to improve and maintain the customer stickiness”. 

Therefore, for milk powder companies, changes in consumer shopping behaviors during the outbreak require them to reorganize their marketing channel strategies and re-plan their product portfolio, specifications, and pricing to meet needs of different consumer groups and their shopping purposes presented by different channels.


2. Improvement of current supply chain and logistics to allow current milk powder market gets chances 


Although the overall supply chain and logistics in China have been greatly improved, through this epidemic, it was found that the supply chain and logistics are still insufficient to deal with emergencies. With the suspension of express delivery caused by the epidemic, many places have experienced problems with insufficient milk powder supply because of the dependence of the sinking markets, the third and the fourth markets on the third-party logistics companies.

Song Liang previously stated that "the future transaction between the buyer and the seller must make sure ‘short process, reasonable price and timely service’, that is de-intermediation. In addition, the commercialization of the Internet, to a large extent solves the problem of information symmetry between buyers and sellers, and realizes precise, one-to-one consumption through a digital logistics system, which can help to achieve the realization of de-intermediation from the warehouse to the consumer's home”. This epidemic will become a catalyst for change. So, the sourcing from the origin, front warehouse, contactless distribution and continuous penetration of door-to-door service will get a quality improvement.

For milk powder companies, it helps them better penetrate into the market and better optimize their product structure to meet the increasingly diverse and refined demand of Chinese consumers better.


3. The advertising platform for brands is being changed, and platforms like communities, collective buying and short videos are attracting eyes


The epidemic is accelerating the change of information platform. We will find that short video platforms such as Tiktok (Douyin) and Kuaishou have played a huge role in spreading the news of the epidemic. Firstly, during this epidemic, authorities and government agencies also make livestreaming on such platforms to publish news and improve the credibility of social media. Secondly, during the epidemic, the community and collective buying models are rapidly established, especially in areas with severe outbreaks such as Hubei, Hunan, and Jiangxi. Properties provide residents with daily necessities. Some Maternal and infant shop owners have also established the membership system to give short-distance assistance and goods distribution for users who purchase Maternal and infant products, especially the milk powder and diapers.


In the future, except for optimizing the media advertising plan, milk powder companies should also continuously change their methods to maximize the use of social media to meet diversified consumer needs.


In addition, during the outbreak, the demands for nutrition products, especially immune nutrition products, such as lactoferrin, probiotics, and vitamin C are soaring. Whether it’s worth to entering the nutrition market also needs to be reconsidered by milk powder companies. In the future, companies can take products collocation as a sale strategy and take the milk powder and nutrition products as the core of promotion.


All in all, milk powder companies should apply big data well for its great importance in the integration of online and offline channels, the construction of membership systems, and the transformation of logistics and supply chains. By this way, companies can get more opportunities in future technological competition.

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