Would you believe us if we told you camel milk:
These are some of the claims camel milk powder brands have used to launch their products onto the Chinese market. While some have been proven to have a lick of truth, the evidence has been derived from unsubstantiated scientific research, non-transferable animal experimentation, industry financed research or anecdotal experimentation.
According to China Skinny’s Dairy Tracker, camel milk powder accounted for 61% of revenue for the top 120 milk powder products on Tmall in August 2020, having increased from 21% in December 2019 (see below). This shows robust performance even in the face of the COVID-19 which saw many dairy products and categories suffer throughout the first half of 2020 and beyond. China Skinny investigates how camel milk powder got its start in China and the implications for foreign brands.
Camel milk products have traditionally supported nomadic and pastoral cultures from Africa through the Middle East to the Steppe, but now it is taking the broader Chinese market by storm.
In China, up until the mid- to late-noughties camel milk use was largely restricted to rural families in the North-Western provinces of Inner Mongolia and Xinjiang. Xinjiang has traditionally dominated in terms of camel numbers, largely due to geographical and cultural proximity to camel domestication, but in recent years their stock of camel has dramatically fallen with Inner Mongolia replacing Xinjiang as the leading province.
While camel husbandry used to be a family affair in these provinces, excitement around product benefits drew in commercial interests around the time of the Global Financial Crisis. These interests invested in the expansion of local camel herds with numbers almost doubling from 228,000 in 2009, to 405,000 in 2019.
Initial interest was driven by the nutritional content of the camel’s milk which is widely understood to contain higher concentrations of calcium, phosphorous, potassium and sodium than traditional cow’s milk, as well as containing less lactose and more protein. It has long been touted as a super food amongst nomadic cultures and in the Arab world whose uses for it vary greatly, but it wasn’t until groups such as the United Nations’ Food and Agricultural Organization (FAO) claimed camel’s milk as having massive potential in as early as 2006, that commercial and scientific interest soared.
In China, the product was allowed to enter the market more as a health supplement rather than food and beverage with many brands taking advantage of the nascent industry’s lack of regulation. While China’s commercial law bans brands from promoting therapeutic values of food items, many Chinese brands have been able to get away with citing unsubstantiated scientific studies or pushing articles that flat out promote camel milk powder as a super food with a myriad of miraculous properties (see list of claims in intro).
Despite some brand and advertising agencies having been fined for claiming all sorts of things, or using phrasing such as camel milk has “obvious curative effects on tuberculosis, diabetes, cancer and AIDs(Chinese)”, or simple product exaggeration (Chinese) many have found ways of indirectly pushing these claims.
Running with these claims, many camel milk powder brands entered the market in an almost predatory manner, targeting elderly consumers in lower tier cities where the product claims received less scrutiny, older KOLs in campaigns resonate more and levels of gullibility were perhaps higher, both in terms of the claims, but also in terms of how ecommerce channels and brands operate.
This hit a sour note particularly with younger consumers who found their parents or grandparents falling victim to the extraordinary claims and high prices of camel milk powder, particularly around mid-2019. There are many articles on the likes of Zhihu (Chinese) and Hupu (Chinese) accusing camel milk powder products of being so-called “IQ taxes”, referring to products for which consumers have limited knowledge, are vulnerable to misinformation and end up paying top dollar.
It is worth noting again at this point that many of the claims we began this article with do maintain a kernel of truth, however the vast majority of research has either not been substantiated or successfully repeated, and/or it has been conducted on animals such as mice wherein the results are not necessarily applicable to people.
Nonetheless, sales for camel milk powder have persisted, weathering the peak COVID-19 market dip in February better than other dairy products. This is reflective of the fact that consumers are looking for products with richer nutritional content (many camel milk powder products on Tmall title themselves as probiotics or nutritional products) and that strengthen the immune system.
As mentioned, many of the claims the camel milk powder brands fuel are on shaky ground at best, but most of this research is undertaken on the product in its raw state, not the milk powder that hits the shelves.
It is widely recognised camel’s milk is slightly lower than cow’s milk in saturated fat, has 10 times more vitamin C (not that cow’s milk has every been considered a good source), as well as more calcium and potassium. Camel’s milk is also believed to be higher in protein than cow’s milk. These tests however, tend to be undertaken on the raw milk itself, so how does this translate to milk powder products on ecommerce in China?
Our analysis indicates that elevated prices and fat content is consistent with widespread understanding of camel milk. For example, camel milk powder costs 7 times the price of cow milk powder for the same volume which is to be expected considering the elevated costs of producing camel milk, the lower yield (1 cow will produce 50,000 litres of milk in 3 years, whereas a camel will only produce 4,000-7,000 litres) and demand currently outsripping supply.
However, camel milk is also believed to be higher in protein and calcium, but that does not translate to the powdered products on the market, despite brands maintaining the claims. Protein content is at almost half that of cow milk powder, while calcium levels are 18% lower. This discrepency may be the result of nutritional loss during processing, enchancements or additives in cow milk powder to meet market demand, or misinformation. Regardless, the reality is that the product consumers buy does not reflect the claims levied on raw camel milk.
Perhaps the above discrepancy is the reason why most of the top-selling camel milk powder listings now offer 2-for-1 or buy-1-get-1-free type deals, which could indicate the apparent solid market growth was more of a ‘flash in the pan’ scenario, hurt by the unsustainability of exaggerated claims. Having said that, the category is here to stay and does present an opportunity for foreign dairy companies, especially in a post-COVID market. With the category having been founded on a notion of being a ‘universal cure’ and the spread of it’s ‘IQ tax’ stigma online, brands will likely have to undertake a marketing cleanup effort moving forward, much in the same way brands were forced to after the Melamine scandal of 2008.
China Skinny’s Dairy Tracker enables us to pick up and follow trends like these in the market in the knowledge that the data we use is clean and reliable, and marries well with direct consumer data we collect through online surveys. To find out how our Dairy Tracker can help you or how your company can gain access, email us here or visit our overview page. If you’re already looking to invest in China and need help putting together some of that ‘careful marketing’, don’t hesitate to contact us for strategic consultation.