Sweden’s oat milk giant OATLY announced in its semi-annual report for 2025 released on the evening of July 23 that it has initiated a strategic review of the Greater China region, including exploring the possibility of operating its business independently in the region. Analysts suggest that this move may be related to OATLY’s profitability in China.
According to a report by Observer on July 26, OATLY’s CEO Jean-Christophe Flatin stated, “After reshaping operations in the Greater China region, it is time to step back and consider how to accelerate its development and maximize its value.” This news had already been circulating in a limited scope a week before its official announcement.
In response, dairy independent analyst Song Liang told the media that this may be related to OATLY’s profitability in China. In the European and American markets, especially in the United States, OATLY’s profit margin is much higher than in the Chinese market. “The current market size of OATLY in the Greater China region is still only $100 million, and it can even be said that the profit from the Chinese market contributes little to OATLY’s overall performance,” Song Liang said.
Song Liang believes that the core reason why OATLY is attempting to divest from the Greater China market is due to the less optimistic outlook in the Chinese market. In February 2025, OATLY announced the cessation of construction on its second factory in China, indicating a cautious approach to the company’s growth in the Chinese market.
Industry insiders told Observer that in 2024, OATLY’s annual revenue in the Greater China region was $115 million. Assuming the industry average market sales rate is 2-3 times, OATLY’s valuation in the Greater China region should fall between $230 million to $345 million, and with a valuation of $200 million, the market sales rate is only 1.74 times.
Currently, OATLY is priced at around 16 yuan per liter on the Taobao channel in China, significantly lower compared to the initial price when the brand entered the Chinese market, and even lower than some equivalent milk prices. However, in Europe, the price of milk of similar specifications is almost half that of OATLY.
Analysts suggest that price reduction may bring short-term benefits to the brand, but in the long run, it may dilute OATLY’s high-end positioning and further complicate the company’s situation of increasing sales without increasing profits.
Prior to this, Starbucks sold a portion of its equity in China operations, General Mills considered selling part of the Häagen-Dazs business in China, and Nordic jewelry brand Pandora expressed intentions to restructure its China operations, making OATLY just one of the foreign consumer goods companies withdrawing from China.
Public records show that OATLY was founded in 1994 and is an innovative company focused on oat milk production, headquartered in Malmö, Sweden. Its oat milk products use patented enzyme technology to preserve the essential beta-glucan in oats. Its main products include oat milk, oat yogurt, ice cream, and cream.