Stacking Shelves, page-751

Excerpts from GS overnight (Cut and Paste): 

Baby products: The IMF sales growth was largely flattish in Jan 2019, much slower thanNov-Dec levels. This applies to diapers and other baby products as well. We believe thiswas due to: 1) Exit of Taobao daigou merchants; and 2) negative impact from lower newbirths in 2018. A2 continued to outperform the overall category while Danone lost share.

We note that the M&B stores channel is showing very strong growth (sales up 16% in2018) and gaining share over modern trade. A2 sales grew strongly as it expandednetwork in M&B stores in 2018, while Yili sales also grew 32% yoy. Specifically on brands, Danone’s offline sales were up 15% ending Nov-Dec 2018, whileNestle and A2 were up 6% and 179% respectively, all seeing some acceleration vs.previous period.

Local brands gaining share: In 2018, the local brands broadly gained share over MNCs(except for A2). This was driven by strong expansion in low-tier cities and high channelpromotions offered by local brands. Feihe and Yili were the highest share gainers.

IMF sales went up by 1% yoy in Jan, significantly slower than 55% in Dec. Aptamilmaintained its leading position while A2, Mead Johnson and Wyeth saw yoy marketshare gain in Jan. Among domestic players, Firmus saw significant market share gainfrom 4% to 7% yoy, while other major brands saw generally stable share. Diaper salesgrowth was at 6%, with flattish volume growth. The top 3 players were Pampers,Moony and Huggies.