Mengniu Dairy and its competitor engaged in their annual marketing campaigns during the Spring Festival period. Online users actively suggested that Yili invite actress Ma Yili for an endorsement with the slogan "Drink Yili in the Year of the Horse." Subsequently, similar suggestions were made for Mengniu, proposing the tagline "Ma Yili also drinks Mengniu." Yili followed the advice and secured Ma Yili as a brand ambassador, forming a diverse endorsement group that included other celebrities with the surname Ma. In contrast, Mengniu opted for a different approach, featuring comedians and focusing on a humor-driven campaign.
Mengniu recently released its 2025 earnings forecast, revealing a net profit between 1.4 billion and 1.6 billion yuan. Despite a significant year-on-year increase, this figure was largely influenced by substantial impairment charges on assets such as Bellamy's and Modern Dairy. Excluding these impairments, the adjusted net profit remained below market expectations. Meanwhile, the company's revenue is projected to decline by 7% to 8% year-on-year, falling to approximately 81.5 billion yuan, a level last seen in 2021.
The performance gap between Mengniu and Yili has widened significantly. In the first half of 2025, Yili reported revenue of 61.933 billion yuan, while Mengniu's revenue stood at 41.567 billion yuan, a difference of 20.366 billion yuan. Yili's net profit reached 7.235 billion yuan, compared to Mengniu's 2.046 billion yuan, which is about one-third of Yili's earnings.
The primary disparity lies in their奶粉 businesses. During the first half of 2025, Mengniu's奶粉 revenue was 1.68 billion yuan, whereas Yili's奶粉 segment generated 16.578 billion yuan, nearly ten times larger. Yili's奶粉 business now accounts for 26.76% of its total revenue, while Mengniu remains heavily reliant on liquid milk, which constitutes about 80% of its sales.
Industry analysts note that the over-reliance on liquid milk poses structural risks, especially as China's dairy market enters a phase of saturation. Consumption patterns are shifting toward non-direct consumption products like奶粉 and cheese, highlighting the need for diversified product portfolios.
Another factor influencing Mengniu's position is the rise of Junlebao Dairy, formerly a subsidiary. Mengniu divested its 51% stake in Junlebao in 2019, which has since grown into a formidable competitor. Junlebao has filed for an IPO in Hong Kong, aiming to challenge the dominance of Yili and Mengniu. Its product range includes奶粉, fresh milk, and yogurt, with significant market shares in several segments.
Under CEO Gao Fei, Mengniu has implemented a "One Body, Two Wings" strategy, focusing on stabilizing its liquid milk business while expanding into functional nutrition products and international markets. The company has also undertaken financial restructuring through impairment charges. Although revenue has declined, segments like ice cream and cheese have shown double-digit growth.
Looking ahead, industry experts suggest that Mengniu must prioritize奶粉 and high-value-added categories to capture upcoming market opportunities. As raw milk prices are expected to stabilize, optimizing product mix and enhancing brand appeal will be crucial for competitive recovery.
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