Some say 2025 is the first year of retailer private brands. Strictly speaking, this judgment is not accurate. Private brands are not new; Sam's Club, Hema, Aldi, Pangdonglai, and even many regional supermarkets have already tried private brands to varying degrees. But if we say 2025 is the watershed where Chinese retailers' private brands move from 'testing the waters' to 'scale competition,' it might be closer to the truth. More and more retailers are no longer satisfied with making a few low-price substitutes; they are beginning to treat private brands as a product strategy, supply chain strategy, and even platform brand strategy. Among them, dairy products have become the most typical battlefield. New retail platforms like Hema and Dingdong Maicai continue to launch new dairy products; domestic supermarkets like Pangdonglai and Yonghui have entered the dairy track through joint customization; foreign retailers like Walmart and Aldi use high-quality, low-price products to create bestsellers. If we look at retailers' dairy moves in recent years, we find they are not accidental launches but form several clear strategies. The first type is the hard discount strategy represented by Walmart and Aldi. The core logic is: Narrow SPU, narrow SKU, using very few SKUs to break through the price band. For example, a pure milk product called "Little Green Bottle" from Wojixian has become a phenomenal bestseller among young people due to its low price (9.9 yuan/1000ml) and high quality (e.g., protein up to 4.0g). Data shows that since its launch, it has ranked first on Walmart's bestseller list, with sales reaching 1.873 million units. Besides the unconventional packaging—using PET bottles to cross over into the "fresh milk" image instead of traditional Ecolean, Belypak, or Tetra Paks—it highlights low price and high quality. Additionally, the membrane filtration technology replacing traditional processes raises the maximum protein content of ordinary Holstein milk from around 3.6g to 4.0g. The second type is the new retail platform strategy represented by Hema and Dingdong Maicai. The core logic is: Wide SPU, narrow SKU, using scenarios and trends to drive new product growth. Take Hema as an example: its dairy category covers fresh milk, yogurt, organic milk, A2 milk, functional milk, and many other subcategories, but each subcategory does not have a large number of SKUs; instead, it uses a few private brand products combined with a small number of branded products. Products like Hema's Good Night Milk and Greek-style dry yogurt are not simply "cheaper milk" but are creating new consumption scenarios and emotional value. Especially Good Night Milk: within a week of its launch in May 2025, it showed "9,000+ people have ordered this month" on the Hema app, soaring to the top of the fresh milk chart, becoming a unique phenomenon in the functional milk category. Dingdong Maicai's approach is similar. Products like milk skin yogurt, dry yogurt, low-GI grassland yogurt, and Mongolian milk chew yogurt cheese are all innovations around flavor, health, regional characteristics, and social sharing attributes. Since 2025, its series of low-temperature yogurts have continued to be popular; each of the milk skin yogurt, dry yogurt, and low-GI grassland yogurt has become a million-seller per month, driving a 300% year-on-year increase in sales for its private brand Dingdong V5 yogurt series. Even now, it still shows rapid growth: for example, the Mongolian milk chew yogurt cheese launched early this year achieved sales of over 300,000 yuan in the first half month, with a 7-day repurchase rate exceeding 25%. These two retailers share a common feature: wide SPU. For example, Hema's dairy category is rich, with nearly 30 subcategories and nearly 59 SKUs, basically covering the dairy products in the Chinese market. But each subcategory contains a few SKUs: one private brand; and one or two other dairy brands. The third type is the joint customization strategy represented by regional supermarkets like Pangdonglai. For example, Pangdonglai and Mengniu's Selected Pasture launched pure milk, using the "big brand pasture + platform endorsement + full process traceability" approach to lower consumers' trust threshold for private brand dairy products. The key to this type is not low price but trust transfer: consumers trust Pangdonglai and also trust leading dairy companies; the joint customization effectively combines the retailer's channel trust with the dairy company's quality capability. But it is undeniable that some regional supermarkets have not yet formed a system, remaining at the stage of "just sticking a label." The result is severe homogenization, unstable quality, and no price advantage. For example, a regional chain supermarket's private brand pure milk does not sell well. Why do retailers favor dairy for private brands? Retailers' increased focus on dairy private brands is not driven by a single factor but by the combined effect of supply, demand, channel, and brand forces.

  1. Dairy is the best catalyst for retailers to do private brands
  • Dairy is an ultimate traffic driver Milk, as a high-protein, sugar-free, low-fat food with natural health attributes, is increasingly popular. Besides the initial breakfast, leisure, and bedtime scenarios, it has long extended to meal replacement, parties, work afternoon tea, and many other scenarios. Drinking a glass of milk daily is a high-frequency, rigid daily need. Retailers use such high-frequency repurchase traffic to attract customers to visit stores or log into apps frequently, driving sales of other high-margin products.
  • Profit amplifier When raw milk supply exceeds demand, dairy companies and pastures face greater pressure to reduce inventory. To release excess milk sources, more low-price dairy products appear on the market: supermarkets, convenience stores, and community e-commerce are flooded with new milk "faces"; small and medium pastures also supply bulk fresh milk to bakeries, township milk bars, and other channels at lower contract-off prices, usually half the price of regular fresh milk, sometimes as low as about 3 yuan/jin. This change directly lowers the dairy price band and provides opportunities for retailers to do private brands. Compared to operating branded products, retailers doing private brands can sell at prices 20%-30% lower than branded products, forming a clear price advantage; on the other hand, profits may be 5%-10% higher than operating branded products. At the same time, private brands can save on brand promotion fees and exclusive channel development costs, further reducing costs. Therefore, for retailers, dairy private brands are not just "selling one more product" but re-mastering pricing, profit, and product definition rights during a window of loose supply.
  • Leverage dairy to amplify the platform's brand halo Most Chinese retailers' private brands are still at the "big brand alternative" stage, far from becoming true "big brands" in consumers' minds. Therefore, private brands should not only look at sales scale but also brand power, market attention, and user-driven word-of-mouth. From cases like Sam's Club, Walmart, and Hema, once retailers launch new products with distinct selling points, flavor innovation, or emotional value, they are likely to form user reviews, planting, and sharing on social platforms, creating a closed loop of "new product launch—user review—drive purchase—generate more content." Dairy is precisely a category suitable for carrying such micro-innovation. Whether it's milk source, protein, low GI, or concepts like milk skin, dry yogurt, or Good Night Milk, they can create topics and increase the frequency of brand-consumer interaction. For example, Dingdong Maicai's grassland milk skin yogurt, once it becomes a hit, brings not only sales growth but also strengthens the platform's product power and brand trust.
  1. The supply chain for dairy basic categories is already very mature
  • Maturity of product manufacturing itself In a traditional retail company, when products on the shelf are from brand companies, if quality issues arise, it is the brand's responsibility; retailers do not need to be responsible for the product itself. When retailers, to achieve short-chain supply chain efficiency, source directly from factories, or sometimes choose smaller second- or third-tier factories because big brands quote higher prices, they invisibly amplify certain risks; at this point, retailers have taken the brand's interests and must also take over the brand's responsibilities and obligations. For dairy factories, the current milk source selection standards, feed composition ratios, sterilization temperatures, packaging costs, factory inspection, quality control, and other processes and key points have all been standardized and formalized, and this standardization has no obvious difference or specificity for any milk production factory. This is the maturity of product manufacturing itself. Therefore, retailers can use private brands to choose factories for OEM, contract manufacturing, and operations. As the proportion of private brands gradually increases and the weight of responsibility grows, they can ensure basically no risk.
  • Two-way benefit from digesting excess milk sources and OEM dividends To control milk sources, dairy companies and their controlled or social pastures annually sign contracts to fix and constrain both parties' behavior, specifying key elements such as annual purchase completion rates and milk price standards. But the market has many uncertainties. Sometimes, even if the minimum purchase completion rate is fulfilled, the brand itself cannot digest all the milk, leading to a problem: how to handle the remaining raw milk? Raw milk has no storage period; if it cannot be digested, it can only be spray-dried into powder at a huge loss (a loss of 1,000 yuan per ton is not uncommon). To digest excess milk sources, large dairy companies are willing to do OEM for retailers. This is also a result of mutual benefit under the condition of oversupply. At the same time, big-brand OEM also helps retailers cross the threshold of quality endorsement when entering the market initially. As retailers continue to encroach on the existing dairy consumption market, even if both parties are in the same field, retailers will increase marketing investment and traffic tilt to bring higher exposure to private brands, forming a direct and confrontational competitive relationship with brand companies. The 2026 financial report shows: Mengniu's liquid milk revenue fell from 82 billion in 2023 to 73 billion in 2024 and then to 64.9 billion in 2025, declining by nearly 10 billion each year. Among this, it cannot be denied that retailers' private brands have caused large-scale market diversion. This has become a hidden worry for most dairy companies: they have changed from partners to strong competitors in the same track. The real opportunity for dairy companies is not low price, but irreplaceability "If you can't beat them, join them" is a wise survival philosophy in the new era and market competition context! For brand companies, doing OEM for retailers' private brands or jointly launching customized products can achieve cost reduction and efficiency improvement through scale and intensive production-sales linkage. Customized product orders are stable and scalable, helping to fully utilize dairy companies' production capacity. But for dairy companies, how to maintain a balanced control where OEM or customized business always occupies a certain proportion is a comprehensive test of their own brand's market performance and sales impact. Layout of deep processing fields to control the discourse power of high-value-added dairy raw materials. In 2026, leading dairy companies represented by Mengniu, Yili, and Junlebao have successively laid out deep processing fields, such as mascarpone original cheese, D90 demineralized whey powder, lactoferrin, and other high-value-added production lines, which have been completed and put into operation, completing the substitution of imported dairy raw materials and high-value-added products, further amplifying their role as a "reservoir" for raw milk. If you can't be the first, be the only one, and become irreplaceable in retail channels. Some dairy brands, such as Kasi and Jane, firmly grasp the long-tail market in the dairy industry with distinctive, high-end images, and still have room for development and growth.

Final Thoughts

Retailers entering dairy is not a simple cross-border move or a short-term price war. Retailers are no longer satisfied with "selling others' goods" but are beginning to try to define products, organize supply chains, restructure price bands, and make private brands part of their platform capabilities. Dairy has become the first battlefield because it is high-frequency, rigid demand, with a mature supply chain, and enough room for innovation. But private brands may seem simple in logic, but they are not easy to do well. The quality control system, supply chain management capabilities, R&D capabilities, and brand trust that brand companies have built over decades will not automatically transfer just because retailers put a private brand label on products. For retailers, the real challenge is just beginning. Making a few bestsellers is not difficult; the difficulty lies in managing hundreds or thousands of private brand SKUs stably over the long term. Making a low price once is not difficult; the difficulty is finding a long-term balance among price, quality, efficiency, and trust. The competition for private brands has just begun. It seems the threshold is extremely low—find a factory, design packaging, stick a label, and put it on the shelf. But those that truly stand out and are remembered by consumers are few. Most retailers have not thought clearly from the beginning about the core question: Why should consumers choose you? What reason do you give them that others cannot? Bestsellers are easy to copy, but what cannot be copied is the reason consumers choose you. June 4-5, 2026, Hangzhou | The First China Private Brand Industry Chain Conference—Dingdong Maicai, Metro, FamilyMart, Tmall Supermarket, and other leading retail decision-makers will speak on-site, not just about bestsellers, but about the real logic behind them. In the supply-demand matching session, retailers, factories, and brand companies will be on-site to talk.