Oatly, the Swedish oat milk giant, is reportedly considering selling its struggling business in China after facing challenges in the market for several years. The company has been evaluating options to accelerate growth and maximize the value of its China division, with potential buyers looking to reach a deal as soon as this year. Oatly's difficulties in China have intensified since the Covid-19 pandemic, leading to a decline in revenue in the region while facing manufacturing costs and supply chain difficulties globally.

Despite efforts to restructure its business and introduce innovative products specific to the Chinese market, Oatly has struggled to gain a strong foothold in China's competitive dairy-free market. The company's strategic review, expected to be completed by the end of 2026, could result in the sale of its China business to boost its valuation. Exiting China could be a significant move for Oatly in light of its declining valuation since going public in 2021, highlighting the challenges the company faces in the region amidst a changing market landscape.