Over 700k offline events will be difficult to sustain performance. Feihe's net profit in 2025 is nearly halved year-on-year, with sales expense ratio surging to nearly 40%.

Ask AI · Why didn’t Feihe’s high marketing spend boost performance?

“An average of 1,917 in-person seminars held every day”—the figure comes from Feihe’s 2025 annual report disclosure and quickly drew outside attention. As a leading player in infant formula powder, Feihe held more than 700k offline events over the past year, covering formats such as the Mama Love Seminar, carnivals, and roadshows.

Notably, the number of Feihe’s offline events has declined for three consecutive years. Phoenix WEEKLY Finance has found that Feihe held 950k offline events in 2023, 920k in 2024, and dropped to over 700k in 2025. Even so, it still maintains a high density of nearly two thousand events per day.

From the perspective of marketing efficiency, in 2025, Feihe’s sales and distributor spending was RMB 700k, basically in line with the previous year. However, its sales expense ratio ((sales costs corresponding to every 1 yuan of revenue)) rose from 34.6% in 2024 to 39.5% in 2025. Compared with peers, in 2025 Mengniu’s sales expense ratio was 26.3%, Ausnut was about 25%, and Synutra was 16%.

Even with big-budget marketing, performance did not improve in step. During the reporting period, Feihe achieved operating revenue of RMB 950k, down 12.7% year over year; net profit attributable to shareholders was RMB 920k, down 45.7% year over year. Revenue from its infant formula powder business—accounting for more than 85% of Feihe’s total revenue—also fell by more than 16% year over year.

Milk industry analyst Song Liang told Phoenix WEEKLY Finance that Feihe has continued to maintain high-density offline connections because, in recent years, brand, pricing, and market information have all been under pressure. It needs to rebuild connections with channels and consumers through face-to-face communication.

But judging by the results, all this is more of a defensive strategy and has not successfully been converted into growth momentum.

From the channel side, in 2025, revenue generated from Feihe’s sales to offline customers accounted for 73.3% of total dairy product revenue; in 2024, this proportion was 77.1%, and in 2023 it was 79.6%. In addition, Feihe’s offline outlets dropped from more than 110k in 2020 to 70k in 2025. What’s worth noting is that although Feihe invests heavily in building its own channels and offline system, final product sales still heavily depend on the distributor network.

With offline operations “less successful” and contraction underway, Feihe has turned its attention to online channels. In its latest financial report, Feihe said directly that to capture the rapid growth of e-commerce sales and attract the attention of younger consumers, the group’s products are also sold directly on the largest e-commerce platforms, as well as on its own website and mobile applications.

Industry analysts pointed out that Feihe’s online setup is not simply about selling goods; rather, it integrates resources across the full ecosystem to coordinate the private-domain strategy. Specifically, Feihe channels customers who buy infant formula powder offline to the online “Star Mom Club” through a points reward mechanism, and then uses points redemption and other interactive methods to increase customer engagement. The deeper users are influenced by relevant content and products, the more likely they are, when making decisions, to continue purchasing Feihe. However, judging from Feihe’s e-commerce revenue, in 2025 it was around RMB 14.72 million, which has yet to form scale.

Besides insufficient marketing efficiency and the weakening of offline channel advantages, inventory issues are also starting to stand out. By the end of 2025, Feihe’s inventories were RMB 700k, up from RMB 2.15 billion in the same period last year. The inventory turnover ratio declined from 3.17 in 2024 to 2.72 in 2025.

To further expand the market and find new growth points, in recent years Feihe has used “a one-stop nutrition solution across the full lifecycle” as a pivot, attempting to extend its business comprehensively to children, adolescents, and middle-aged and elderly groups. It has rolled out products such as adult functional nutrition powder and mid- to older-age milk powder, and accelerated its layout of categories like cheese—aiming to break reliance on a single infant formula business.

But overall, the transformation is still in the cultivation stage. In 2025, other dairy product revenue—including adult milk powder, liquid milk, and rice porridge as complementary foods—rose 36.1% year over year to RMB 2.06 billion, with a gross margin of 1%.

“Adult functional nutrition is the industry’s next red-hot growth track. Feihe’s prior layout was insufficient and its positioning was vague. If it refocuses its positioning from this year, it may start to gain traction in about three years.” Song Liang said.

After the financial report was released, Everbright Securities issued a research report stating that, considering demand for infant formula powder is still somewhat soft, it would reduce Feihe’s attributable net profits for 2026–2027 to RMB 7.16B and RMB 18.11B, respectively. The previous forecasts were RMB 1.94B and RMB 110k. It also said that, as a leading domestic milk powder company with strong brand power and channel control capabilities, Feihe will maintain its “Buy/Accumulate” rating.