---
title: "How Much Did Dairy Companies' Spring Festival Sales Drop Year-on-Year Amid the Epidemic?"
description: "The epidemic has severely impacted China's dairy industry, with liquid milk sales during the Lunar New Year period dropping by about 40% year-on-year. The decline varies by company, with the worst-hit seeing only 30% of last year's sales, while the best performer maintained 87.76%."
author: "刘骥"
publisher: "New Distribution"
email: "zhaobo258@gmail.com"
telephone: "+8615854817671"
published: "2020-02-10"
categories: "Management & Methods"
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# How Much Did Dairy Companies' Spring Festival Sales Drop Year-on-Year Amid the Epidemic?

> The epidemic has severely impacted China's dairy industry, with liquid milk sales during the Lunar New Year period dropping by about 40% year-on-year. The decline varies by company, with the worst-hit seeing only 30% of last year's sales, while the best performer maintained 87.76%.

Impact of the epidemic:
On January 15, 2020, the first phase of the China-US trade agreement was signed, bringing a temporary end to the two-year trade war. Just eight days later, Wuhan was locked down.
The epidemic first hit service industries that require person-to-person contact, such as catering, retail, tourism, and transportation.
The Spring Festival is traditionally the "New Year movie season" for Chinese cinema. However, with the epidemic, all New Year films were cancelled, leaving the entire film industry with no revenue. In 2019, the Spring Festival box office was around 5.8 billion RMB.
In the consumer sector, the film industry is just a "small part." The catering and retail industries, as the "big part," and tourism generated over 1 trillion and 500 billion RMB in revenue respectively in 2019.
**Given China's annual GDP of around 100 trillion, a rough estimate suggests these two industries alone cost the Chinese economy 1%.**
This year's epidemic is easily compared to the SARS outbreak in 2003. In 2003, despite the impact of SARS, the Chinese economy even achieved double-digit growth of 10% for the first time in seven years, surprising many economists.
Looking back, China joined the WTO in 2001, and 2003 was the peak of China's enjoyment of globalization and demographic dividends.
It was from 2003 that the Chinese economy accelerated year after year to 14.2% in 2007, then fell to 9.7% due to the financial crisis.
The period from 2003 to 2007 became the "golden five years" of China's economic development. With such momentum, the impact of the SARS epidemic on the economy was easily absorbed, and it was hard to even notice from annual data alone.
**In the dairy industry, 2003 was right in the middle of the "golden decade of dairy development" from 1998 to 2008. Looking back, dairy sales grew by as much as 40.6% that year.**
After the SARS epidemic in 2003, the public's awareness of balanced diets and immune regulation improved, leading to the birth of excellent products like Guangming Jianeng in the low-temperature yogurt category.
As the concept of household consumption of dairy products gradually became routine, two years later, in 2005, super single products like Telunsu were born.
**-01-**
**Back to the point: what impact does this year's epidemic have on dairy companies?**
Comparing shipments on February 8 this year with the same period last year is meaningless because February 8, 2019, was the fourth day of the Lunar New Year, a prime time for visiting relatives and friends.
So we conducted phone and WeChat surveys on data from the Lantern Festival (February 19, 2019) and this year's Lantern Festival (February 8, 2020). The data sources include the top four liquid milk brands—Yili, Mengniu, Guangming, and Junlebao—plus regional leading enterprises (New Hope, Weigang, Yinqiao, Jiabao, Tianyou, Huahuaniu, Changfu, Tianrun, Yantang, Huang's, Zhuangyuan, Gucheng). Before the deadline, we also checked Tmall for updates.
Note: To protect corporate confidentiality, all data will be anonymized.
This is a regional leading enterprise mainly selling room-temperature milk. The decline compared to the same period in the Lunar New Year is quite severe.
This regional leading enterprise's decline is not as severe as the first one, but still alarming.
A leading enterprise in the north, mainly selling low-temperature products, saw a decline of 36%, which is already commendable.
The president of this listed company only revealed that this year's situation is very difficult. Later, through other channels, I learned that this dairy company's situation is actually good, performing at an excellent level compared to the industry.
The best-performing dairy company maintained 87.76% of last year's shipment volume.
Now let's look at my chat record with the Tmall dairy products manager:
I won't go into the details of the survey process, and some companies did not directly answer with numbers, while some had not replied by the deadline. So we can only provide a preliminary, imprecise statistic: **Among the companies surveyed that provided responses, the worst decline was to only 30% of the same period last year (Lunar New Year year-on-year), while the best was 87.76%.**
Taking the decline data collected from various companies and combining it with Nielsen's 2019 brand share data for a weighted average, **overall, during the COVID-19 epidemic, China's liquid milk sales during the Lunar New Year period dropped by about 40% compared to last year.**
**-02-**
**Summarizing the findings from this small-scale survey:**
**1. Companies mainly selling room-temperature products saw steeper declines than those mainly selling low-temperature products.** This is clearly related to the national call to "not visit relatives and friends."
**2. The decline in East China was milder than in other regions.** Consumers in East China have higher milk consumption awareness and the highest awareness of dairy products' health benefits. Therefore, in East China, especially Shanghai, fresh milk shortages even occurred frequently.
**3. Dairy companies in South China did not see severe declines.** Because in that region, the Spring Festival is traditionally a low season, so the epidemic had little impact on sales.
**4. Companies mainly delivering milk to households saw severe declines.** First, many residential communities were closed, prohibiting outsiders from entering; second, many delivery workers could not return to the market, leading to a sharp drop in delivery capacity.
**5. In terms of channels, small supermarkets were much more resilient than hypermarkets.** Because residents could walk to small supermarkets without taking public transportation, reducing infection risk.
**6. E-commerce dairy sales during the epidemic did not see the expected growth.** It's not that people couldn't go shopping and relied on e-commerce; rather, social logistics capacity dropped sharply, and community channels and fresh food platforms could not significantly boost mainstream e-commerce's "mediocre" performance.
**7. State-owned enterprises and dairy companies bearing social responsibilities faced greater pressure**, such as Guangming Dairy's commitment to not rejecting a single drop of milk.
The dairy industry was already under pressure from China's slowing economic growth, with only single-digit growth last year. It can be said that the economic trend is a gray rhino for dairy companies, and this "gray rhino" continued to charge toward the dairy industry, but encountered the sudden "black swan" of the epidemic.
**-03-**
Okay, let's wrap up the depressing industry data and talk about countermeasures.
Grassroots staff care about "tactics," such as marketing communication strategies, product strategies, and issues like community marketing. In fact, the practitioners who follow this official account are highly skilled. Just look at the Moments posts of peers to know how to combine dairy product characteristics with current hot topics for educational communication.
Insightful people have even begun to plan to put a "blue hat" (health food certification) on their products, decisively applying for health food approval to legally promote immunity.
There's no need to dwell on general tactics, nor waste precious time listening to so-called paid courses online.
**Today, I want to talk more about "the Way."**
When a country, institution, company, or organization faces a major external crisis, the urgency of mobilization capability far exceeds marketing capability! In a word, **a company's mobilization capability is far more important than its marketing capability.**
Please look at my chat record with this company executive:
This is a chat between me and the head of a company with a large sales scale. It shows the company's excellent **mobilization capability**.
Mobilization capability refers to the ability of a country (or institution, company, organization) to call up, convert, and organize human, material, financial, and spiritual resources for war. Mobilization capability is the subjective condition for turning mobilization potential into actual strength. The size of mobilization capability determines the degree to which mobilization potential is converted and utilized.
In the early days of the Soviet Union's Great Patriotic War, the Soviet Union was stunned by Germany's blitzkrieg, losing 2.68 million Red Army troops and mechanized forces deployed at the front.
To use an analogy, Germany's marketing strength and market capture capability were far superior to the Soviet Union's.
But after the Great Purge, the Soviet Union's top-down power concentration could penetrate every aspect of society without discount. Absolute obedience from top to bottom brought about a high degree of national ideological unity and strong cohesion. The entire Soviet Union was unprecedentedly united under Stalin's leadership, and the propaganda machine awakened national consciousness.
At the same time, the Soviet Union, having completed industrialization before the war, possessed a complete industrial system, which enabled it to unleash terrifying military mobilization capability.
It is often said that the Soviet Union's victory was built on human waves, but continuously pushing people forward is itself a manifestation of strength.
In contrast, France, after just one heavy blow, completely lost its will to fight. Isn't that a total failure of the French high command's mobilization capability, leading to a quick surrender even while still having half its army and colonies?
The Soviet Union was completely different from France in this regard. The will to fight was exported from the top and deeply embedded in all corners of society. The advantages of centralization were fully utilized in extraordinary times.
At this point, let me add a side note: **In the face of any major crisis (including this COVID-19 epidemic), one must rely on the advantages of centralization to overcome difficulties. Mobilize organizational strength to build Huoshenshan Hospital in such a short time; mobilize the propaganda machine to make quarantine and mask-wearing reach every household; mobilize social forces to organize epidemic prevention teams and supplies... Without the advantages of centralization, other countries might have collapsed long ago.**
Even the United States, which constantly talks about democracy and freedom, relied on the centralized dictatorship of Roosevelt's New Deal during the economic depression of the 1920s and 1930s to escape misery (see "The Glory and the Dream," Volume 1).
Even excellent companies (like Apple) and excellent sports teams (like Liverpool) are centralized. Even if you're not into electronic products or football, you've probably heard of the autocratic styles of Jobs and Klopp. That is, organizations like Apple and Liverpool have superior mobilization capability compared to their competitors.
Today's rapid information exchange means that any marketing activity is almost an open secret to peers.
If a product is launched on the southeast coast, a nearly identical copy soon appears on supermarket shelves in the northwest plateau.
Small details shared by dairy colleagues in the southwest on Moments can quickly be studied and cracked by peers in the northeast, becoming marketing weapons for northeastern dairy companies.
The flow of marketing and R&D talent, and exchanges organized by third-party additive companies, quickly homogenize product contents.
Even at the initial outbreak of COVID-19, while every household was still celebrating the New Year, the marketing actions (market promotion, public welfare activities, PR strategies, adjusting annual marketing goals, changing annual marketing themes) of the first dairy companies to awaken were surprisingly consistent.
Which dairy companies can stand out from nearly similar marketing levels and make up for the losses caused by the epidemic? We'll wait and see their mobilization capability.
Source: Mingtai Mingguan Marketing Consulting (ID: mental1999)


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## Citation metadata

- Publisher: New Distribution
- Author: 刘骥
- Published: 2020-02-10
- Canonical: https://xinjignxiao.com/en/articles/how-much-did-dairy-companies-spring-festival-sales-drop-year-on-year-ami-f311cdeb/
- Original source: https://mp.weixin.qq.com/s/uP4mTLKZa2nREESsPoyINQ

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