Full Analysis of China’s Billion-Dollar Bottled Water Market

Liquid Gold: The Rise of Bottled Water in China’s Thirsty Market in 2024

What is more refreshing than drinking water in this hot weather in Shanghai? China is the world’s largest market for bottled water. The poor tap water quality, increasing health awareness, higher income levels, and international tourism is fueling the demand for good-quality water.

The latest market analysis by Credence Research, Inc. reveals a robust expansion in China’s bottled water industry. Between 2023 and 2030, the market is projected to grow at a compound annual growth rate (CAGR) of 7.9%. From a valuation of USD 46,518.5 million in 2022, it is anticipated to surge to USD 85,466.8 million by 2030. This growth is attributed to a combination of socio-economic factors and changing consumer behaviors in China, home to over 1.4 billion people and a growing middle class. Here are the primary drivers of this market’s expansion:

• Changing Consumer Preferences:
  • Healthier Beverage Choices: Increasing awareness about the health implications of sugary and artificially flavored beverages is steering consumers towards bottled water.
  • Quality Consciousness: There is a heightened demand for guaranteed clean and safe drinking water.
  • Lifestyle Shifts: A broader trend towards healthier living is influencing beverage choices, favoring bottled water.
• Urbanization and Convenience:
  • Migration to Urban Centers: As more individuals move to cities, the inadequacies of municipal water systems often lead them to opt for bottled water.
  • Varying Water Quality: Inconsistencies in tap water quality across different regions enhance the appeal of bottled water as a reliable alternative.
  • On-the-Go Consumption: The fast-paced urban lifestyle supports the convenience of portable, safe bottled water, facilitating its consumption outside the home.

Examples:

• Health Initiatives: Companies like Nongfu Spring have launched advertising campaigns highlighting the purity of their water, appealing to health-conscious consumers.
• Urban Marketing Strategies: Brands often sponsor city events or place vending machines in strategic urban locations, such as subway stations and public parks, to increase visibility and accessibility.
• Product Innovations: The introduction of eco-friendly packaging and added health benefits, such as vitamins and minerals, cater to niche consumer demands for sustainability and wellness.

The combination of these factors underscores the dynamic growth within China’s bottled water market, positioning it as a leader in the global beverage sector.

However, China’s bottled water market is highly fragmented and localized. Few leading companies are holding more than half of the market share. This article will present you with the landscape of China’s water market and some of the leaders of the industry.

Overview of China’s water market

Poised to become a superpower, China confronts some of the most serious environmental threats in the world. Statistics show China is among the world’s 13 thirstiest countries.  As a country with the largest population, about 400 of 699 cities are short of water, threatening the daily consumption of more than 30 million citizens and causing annual economic losses of more than US$ 14.5 billion.

The government is taking reasonable measures, one of them was to invest US$ 87 billion in environmental protection programs focusing on water, drinking water, and air pollution control. We could optimistically expect a great improvement in China’s water treatment industry in the near future.

There are a lot of active Chinese companies in the field of water and water treatment or drinking water, this number has been increasing and is expected to increase further. This is an emerging environmental industry where China is opening its environmental protection industries to overseas investors and expects the sector to grow at an annual rate of 14-17% in the following years.

The mistrust over water safety boosts the bottled water market

7,500 rotten pig carcasses were found floating in the Huangpu River. As the river supplies 80% of tap water to Shanghai, you can imagine in what state people and mass media were at that time… Although the authorities have guaranteed the quality of the city’s drinking water, residents have remained concerned about water safety, and many of them have stopped drinking tap water and are buying bottled water instead.

The fast growth in this market is because of the mistrust over water safety. The country only has about 6.5% of the planet’s renewable water resources to sustain one-fifth of the world’s population. Chinese chose to drink boiled tap water or bottled water instead of using a home water filtration system.

In 2013, China surpassed America, becoming the world’s biggest bottled water market by volume. According to China Daily, the market has steadily grown in the years from 2010 to 2015, from 19 billion to 37 billion liters of bottled water. It is expected to reach US$76.2 billion by the year 2027. China is the world’s biggest bottled water market in terms of increasing.

The three leaders of the water market in China

Kang Shi Fu (康师傅)

Kangshifu Water respects the national drinking water hygiene standard (GB5749). It was part of the Chinese beverage industry’s top 20 in the 30th year after the reform and opening-up policy. In 2008, the company was named China’s Beverage Industry Water Saving Outstanding Enterprise.

Kangshifu is also well-known for its food products in China.

Nong Fu Spring (农夫山泉)

Nongfu Spring Co. Ltd., formerly known as “Zhejiang Thousand Island Lake Yangshengtang Drinking Water Co., Ltd.”, is headquartered in Hangzhou, Zhejiang Province, holding a company of Yangshengtang. It was founded on September 26, 1996. The company is a drinking water production company in mainland China with eight high-quality water source bases.

Nongfu Shanquan has recently made a great marketing campaign, sponsoring some popular web shows such as “the rap of China”.

An online poster featuring “Nongfu Spring Purified Water” has sparked considerable attention by showcasing a significant shift in Nongfu Spring’s packaging—from its classic red to a new green design, with a bottle size of 550ml. The poster highlights that the water is sourced from multiple pristine locations, including Qiandao Lake and Danjiangkou Dam, among a total of ten sources. Despite its online buzz, this new product line has not yet hit the shelves of major e-commerce sites or brick-and-mortar stores.

Nongfu Spring in 2024 has been a stalwart in the natural drinking water market for over two decades, championing the health benefits of its products. However, in a seemingly bold strategic pivot, the unveiling of its purified water line came just a day before its competitor C’estbon, a subsidiary of China Resources Beverages, filed its IPO application on the Hong Kong Stock Exchange. Notably, Nongfu Spring’s choice of green for its bottles—a color predominantly associated with C’estbon—suggests a direct challenge to its rival’s market share.

This marketing strategy shift has not gone without controversy. In March, Nongfu Spring was embroiled in a dispute with another beverage giant, Wahaha, which was intensified by nationalist undercurrents among some Chinese consumers. The latest discussions on Weibo, identified by hashtags like #Nongfu SpringGreen Bottle Purified Wate, reveal a wave of consumer backlash. Many netizens criticize Nongfu Spring’s new move as contradictory to its long-standing promotion of natural water’s health advantages, accusing the company of undermining its own established brand ethos.

Wahaha (哇哈哈)

Wahaha Purified Water, since its listing in 1996, has built its excellent quality image with its world-leading production equipment, advanced secondary reverse osmosis technology, and ozone sterilization process. It is highly favored by chines consumers and has been recognized by the country as the “national inspection-free products” and won the “China Top Brand” award.

China’s Wealthiest Tycoon Amasses Fortune from Bottling Nature’s Essence

Zhong Shanshan, currently recognized as China’s richest individual, has carved out a vast empire with his flagship enterprise, Nongfu Spring, by tapping into the pristine waters of China’s ecologically vital rivers and mountains.

Nestled in the untouched wilderness of the Wuyi Mountains, a UNESCO World Heritage Site in southern China, a striking yellow factory stands out against the dense, misty forests that have stood for millennia. This region, known for its ancient Taoist temples and rich biodiversity including pangolins and clouded leopards, is now also home to the most prominent name in Chinese bottled water — Nongfu Spring.

Hydration Nation: Bottled Water at the Heart of China’s Beverage Boom 2024

This facility annually draws over a million tons of water from these ancient woodlands, bottling it and distributing it across the region, capped with the brand’s distinctive red tops.

This operation forms part of a broader investigative series by Bloomberg Green, titled “Water Grab,” which delves into how private entities are profiting from public water resources.

Zhong Shanshan, who started his career as a journalist and later ventured into health supplements, has built a staggering net worth of approximately $63 billion, surpassing tech moguls from TikTok and Alibaba Group Holding Ltd. His wealth largely flows from Nongfu Spring, which operates 11 other extraction sites across China, sourcing water from some of the nation’s most sensitive ecological areas to meet the growing demands of the middle class.

Why Water is a Highly Profitable Commodity in China

Water has turned into a highly lucrative business in China for several reasons:

• Growing Middle Class: China’s expanding middle class is increasingly health-conscious and willing to pay a premium for products perceived as pure and beneficial, such as bottled water from pristine sources.
• Urbanization: As more people move to cities, the stress on public water systems grows, and the quality of tap water can be inconsistent. This drives demand for reliable and safe bottled water.
• Marketing of Purity: Companies like Nongfu Spring have successfully marketed their water as not only a drink but a lifestyle choice, associating their brands with purity and nature, which appeals strongly to consumers.
• Limited Water Resources: In many areas of China, pollution and overuse have limited the availability of clean water, making bottled water an essential rather than a luxury.

Zhong Shanshan’s Nongfu Spring leverages these dynamics, tapping into both the physical springs of China’s landscape and the spring of consumer demand, to build a business empire on the foundation of water—one of the planet’s most vital resources.

How to market your products in China’s water market?

Bet on digital channels to develop your reputation in China. Even the biggest companies and brands are using social media to reach their consumers. Chinese people are very connected online and the impact of social networks on individuals is immense in China.

Social media marketing

Chinese social media platforms, particularly WeChat, have a significant presence in China, with over more than 1.26 billion users as of 2023. WeChat offers various features that can be beneficial for businesses, such as creating an Official Account to enhance brand awareness and act as a newsletter.

Additionally, WeChat allows users to establish their own store, share video content, and run advertisements, among other functionalities.

While WeChat is essential for building brand loyalty among existing followers, it operates within a closed ecosystem.

To expand your customer base and reach new audiences, other social media platforms like Weibo, Little Red Book, Douyin, or Kuaishou can provide a boost to your brand. Utilizing these platforms alongside WeChat can help you effectively engage with a broader range of potential customers.

To promote yourself effectively on Chinese social media it is necessary to:

• create an official account, which is essential to build trust in users
• post new comments and frequent updates
• manage the community and interact with users and Kols
• cross-marketing with other platforms

Build a Chinese website that will be optimized for Baidu

Chinese people are known to make a lot of research online. Baidu is the first search engine in China, you can find all kinds of questions (it is almost like if you have any question, you will find that someone else has already asked it on Baidu before).

Then Chinese consumers and distributors must be able to find you on Baidu, the most popular search engine in China. As we use Google to check brands that we are interested in, Chinese customers and distributors will try to look you up in Baidu, to learn more about your brand.

Anyway, being well-positioned in the Chinese internet sphere is very needed if you want to develop your visibility among consumers. It is also about a question of trust, the more easily your target consumers can find your brand and information on it, the more they will be reassured.

To build a great website follow some easy tips:

• The website must be in Chinese Mandarin, as Baidu doesn’t rank high as foreign websites
• Leave the contact information on the homepage (and here the most important contact will be your WeChat Official Account and phone number)
• You can have an option of a live chat, which will increase your conversion rate, it’s a very popular tool in China
• Your website must be hosted in Mainland China or Hong Kong/Singapour (To put it simply your website will load faster and get a ranking boost on Baidu).
• The content must be adapted to Chinese tastes, be original, and frequent (It will give your Website authority on Baidu)

Invest in Storytelling and Packaging to sell your soda brand in China

Investing in storytelling and packaging is crucial when it comes to selling your water brand in China. Chinese consumers value not only the quality of the product but also the story behind it.

By crafting a compelling narrative that resonates with their values and aspirations, you can create a strong emotional connection with your target audience.

Additionally, paying attention to packaging design is essential, as it plays a significant role in capturing consumers’ attention and influencing their purchasing decisions.

A well-designed, visually appealing packaging can make your water brand stand out on the shelves and attract potential customers. So, by investing in storytelling and packaging, you can effectively sell your water brand in the competitive Chinese market.

Go Digital, Try E-Commerce

Chinese consumers are more willing to purchase online because of the convenience and the greater range of available items on e-commerce platforms.

Nowadays, Chinese consumers have a huge appetite for foreign products, and e-commerce platforms have become the channels of choice for Chinese shoppers looking to purchase such items. Take a look at the most popular e-commerce platforms JD and Tmall here.

Our agency offers a complete range of services for e-commerce marketers from e-commerce consulting to digital marketing operations. We have developed many successful e-commerce projects because we know how to effectively promote your e-commerce business in China by using the latest digital tools.

Douyin, the influential platform

Douyin, the Chinese version of TikTok, has become an influential platform in shaping public perception and communication strategies across various sectors, including water conservation and management in China :-).

1. Marketing Campaigns on Water Conservation

Douyin serves as a powerful tool for spreading awareness and educating the public about water conservation techniques. Government agencies and environmental NGOs often post short videos that demonstrate simple water-saving methods or explain the impacts of water wastage.

• Example: A popular video series features tips on fixing leaks, using water-efficient appliances, and collecting rainwater, which have collectively garnered millions of views, significantly raising public awareness about daily water conservation.

2. Highlighting Water Pollution Issues

Activists and environmental groups use Douyin to document and highlight issues of water pollution. By sharing videos of polluted water sources, they mobilize public support for clean water initiatives and pressure authorities to take action.

• Example: Clips showing industrial discharge in rivers have gone viral, leading to rapid response actions from local governments to investigate and penalize the polluting entities.

3. Promoting Water-Related Cultural Events

Douyin is a platform for promoting cultural events related to water, such as river festivals or water-themed art installations, which aim to celebrate water’s cultural significance and promote conservation messages.

• Example: The Dragon Boat Festival, with its focus on river races, uses Douyin for live streaming the events and features posts that delve into the historical importance of protecting the country’s waterways.

4. Influencer – KOL

Water companies and conservation organizations often partner with influencers on Douyin to reach a broader audience. These influencers create engaging content that either promotes sustainable water brands or educates about conservation.

5. Crisis Communication

During water-related disasters, such as floods or droughts, Douyin has been an effective channel for crisis communication. Authorities and news outlets use it to provide updates, safety tips, and information on emergency resources.

• Example: During the 2020 Yangtze River floods, emergency management offices used Douyin to broadcast live updates, safety advisories, and evacuation notices, which were crucial in managing the disaster response effectively.

Douyin’s visual and immediate nature makes it an ideal platform for engaging and informing the Chinese public about water-related issues, whether it’s through raising awareness, mobilizing for action, or providing emergency communications. Its widespread use ensures that important messages reach diverse audiences efficiently and effectively.

We are your local partner in China! Contact us!

The bottled water market in China has experienced significant growth in recent years. With increasing concerns about water quality and safety, bottled water has become a popular choice among Chinese consumers. The market is highly competitive, with both domestic and international brands vying for market share.

One of the key drivers of growth in the Chinese bottled water market is the rising middle class and their increasing disposable income. As people become more health conscious, they are willing to spend more on safer and higher-quality drinking water. Additionally, the growing urban population and rapid urbanization have also contributed to the demand for bottled water.

We are a China-based marketing agency offering cost-effective solutions to foreign brands interested in tapping into the Chinese market. Our team of Chinese and foreign experts has the experience and know-how needed to succeed in this lucrative, yet complicated market.

Gentlemen Marketing Agency offers many digital marketing and e-commerce solutions, such as web design, e-commerce and social media marketing strategies, localization, market research, KOL marketing, and more.

Don’t hesitate to leave us a comment or contact us, so that we can schedule a free consultation with one of our experts, that will learn about your brand and present you the best solutions for your China market strategy.