China market
BottledinMineral
Water
China
Market
Bologna, 2013
MARKETING REPORT
January, 2014
Overview of Bottled Mineral Water Market in China
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•
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The bottled water market in China consists of various types of bottled water,
including mineral water, sparkling water and purified water. Economic growth,
urbanization, increase in disposable income and changes in lifestyle and
consumption behavior have led to substantial growth in the bottled water
market in China.1
Over the five years through 2012, revenue for the Water Supply industry in
China has been increasing at an annualized rate of 8.0% to total $16.0 billion in
2012.
In recent years, the Chinese government has been promoting the
commercialization of the Water Supply industry, which has contributed to
revenue growth. Most companies in the industry now have private and foreign
capital.2
1. Source: China Bottled Water - Market Report, New Zealand Trade and Enterprise, 2012.
2. Source: Water Supply Market Research Report, IBISWorld, 2013
Trends
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•
•
•
With Improving health consciousness and growing urbanisation and their
enhanced health awareness, more consumers, especially those living in urban
areas, prefer to purchase bottled water instead of drinking tap water.
Wealth accumulation of consumers in the low-tier areas has resulted in a marked
increase in their general consumerism.
The water contamination problem in China and concern about how to improve
the standard of daily drinking water have also been the focus of attention for
consumers in the low-tier areas. This has resulted in them switching from tap
water to bottled water.
Manufacturers contributed to increased penetration of the benefits of bottled
water to consumers through a series of marketing campaigns.2
2. Source: Water Supply Market Research Report, IBISWorld, 2013
Characteristics of Premium and Mass-Market Bottled
Mineral Water
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•
•
Retail price of premium bottled mineral water (500ml) is not less than 8CNY
(1,3USD; 0,96EUR). Retail price of Mass-market bottled mineral water (500ml)
is less than 5CNY (0,81USD; 0,6EUR).
Distribution channels are diverse for bottled mineral water, the retailing price
is not the only criteria applied to identify a brand’s positioning in either the
premium or mass-market segment, consumer perception is also a key
consideration.
Premium bottled mineral water in China is primarily consumed by middle to
high income consumers and institutional purchasers such as major
corporations and government organizations with a large middle to high
income customer base and significant bulk purchase demand.3
3. Source: Bottled Water in China,Euromonitor International, 2011
Sales Volume of Premium Market and Mass-Market Bottled
Mineral Water 2007-2014E (in thousands of tonnes)
6000
5000
4000
3000
2000
2254
2555
2925
3359
3740
4213
4718
5250
Premium Market
CAGR 2010-2014:
20,5%
1000
0
157
198
242
286
416
482
541
603
2007
2008
2009
2010
2011
2012E
2013E
2014E
4. Source: Tibet 5100 Water Resources Holdings Ltd., Global offer, 2011
Mass-Market
CAGR 2010-2014:
11,8%
Retail Sales Value of Premium and Mass-Market Bottled
Mineral Water 2007-2014E (CNY in Millions)4
12000
11064
9906
10000
8802
8000
6285
5398
6000
4068
4000
4616
7573
6818
9611
8620
Mass-Market
2010-2014
CAGR: 11,8%
7690
5208
4392
3579
Premium
Market 20102014 CAGR:
20,5%
2829
2000
0
2007
2008
2009
2010
2011
4. Source: Tibet 5100 Water Resources Holdings Ltd., Global offer, 2011
2012E
2013E
2014E
Main Leaders of Mass-Market Bottled Mineral Water
Wahaha, Master Kong, and Nongfu Spring
Hangzhou Wahaha Group was the clear leader of bottled
water by capturing 13% volume share in 2012.5
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•
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Mainly benefited from advantages in distribution networks
especially in low-tier cities and rural areas
Is affordable to consumers with low disposable income
High quality of the products
5. Source: Bottled Water in China,Euromonitor International, Apr 2013
Brand Shares of Bottled Water by Off-trade Value 2006-2010
1. Source:China Bottled Water - Market Report, New Zealand Trade and Enterprise, 2012
Brand Shares of Mass-Market Bottled Water by Off-trade Value 20103
13.7
41
10.2
8.6
7.1
3.1 3.3
0.6
2.3 0.8
6.8
2.6
4. Source: Tibet 5100 Water Resources Holdings Ltd., Global offer, 2011
Wahaha
Master Kong
Nongfu Spring
C'estbon
Robust
Sensation
Ice Dew Water
Mizone
Health
Watson's
Nestle Pure Life
Others
Main Leaders of Premium-Market bottled Mineral Water
Tibet 5100, Evian, Perrier, Vittel, San Pelegrino.
Tibet 5100 (Market share by sales is 28,5%)
• Positioned as a premium brand by emphasizing the uniqueness and
purity of a glacial spring mineral water, which is sourced from a unique
glacial spring at 5,100 meters above sea level.
• Highest quality standards
• Is consumed primarily by middle to high income consumers and
institutional purchasers such as corporations and government
organizations in China3
3. Source: Tibet 5100 Water Resources Holdings Ltd., Global offer, 2011
Top Six Manufactures of Premium Mineral Water Ranked by
Sales Volume (%), 20103
3. Source: Tibet 5100 Water Resources Holdings Ltd., Global offer, 2011
Top Ten Brands of Premium Mineral Water Ranked by
Sales volume, 2010
3. Source: Tibet 5100 Water Resources Holdings Ltd., Global offer, 2011
Top Six Manufactures of Premium Mineral Water Ranked by
Sales Volume, 20103
Tibet 5100 Water Resources Holding Ltd. (5100 Tibet,
Glacier Spring Water)
24.3
Groupe Danone (Evian, Volvic, Badoit)
28.5
1.6
1
Nestlé S.A. (Perrier, San Pellegrino, Vittel, Acqua Panna,
Contrex)
Heilongjiang Emperial Spring Drinks Co., Ltd. (Emperial
Spring)
2.9
4.9
Pamir Tianquan Co., Ltd. (Pamir)
26.9
Qingdao Laoshan Spring Co., Ltd. (Classic 1905, Laoshan
Mineral Water)
Others
3. Source: Tibet 5100 Water Resources Holdings Ltd., Global offer, 2011
Key Growth Drivers of China’s Premium Bottled
Mineral Water Market
• Increase in urban population and urban disposable income in
China.
• Growing health consciousness.
• Change in consumer behavior.
• Growth in the number and scale of large corporations.
• Procurement behavior of large institutional purchasers
• Drive to improve customer service
Pricing of Premium and Mass-Market Bottled Water
Mass-Market bottled water
Overage price 1-2CNY7
(500 ml)
0,16-0,33USD
Premium market bottled water
Overage price
(500 ml)
(0,12-0,24EUR)
Wahaha
(596 ml)
1-2CNY7
0,16-0,33USD
(1,2-3,6EUR)
Evian
(500 ml)
(0,12-0,24EUR)
Nongfu
(500 ml)
1CNY8
0,16USD
(0,12EUR)
Sources:
6. Want China Times,11/2013
7. Olans, 2013
8. China Daily, 2012
9. Global Times (China), 2012
10-30CNY6
1,65-4,95USD
8,80-9 CNY6,8
1,40-1,48USD
(1,05-1,08)
Tibet 5100
(330 ml)
8,5-10,5CNY7,9
1,40-1,73USD
(1,02-1,2EUR)
Distribution area of Acqua Norda products
Nanchang10 Kunming
Chengdu
Fuzhou
Urban
7,677,100
4,468,076
Rural
14,047,625
2,707,294
GDP(2012) Per
capita (Billions)
43,417CNY 52,144 CNY
53,250CNY
6,442 USD 8,268 USD
8,719USD
(5,225EUR)
(6,408EUR)
Population (2012)
(Total GDP - CNY 373.478
bln USD 59.22 bln)
(5,225EUR)
5,042,565
(Prefecture
level city)
3,583,429
6,432,212
28,894CN
Y
4,731USD
Area Urban
2,129 km2
12,177 km2
617 km2
(3,477EUR)
2,622 km2
Prefecture-level
12,132 km2
12,177 km2
7,372 km2
21,473 km2
10. Source: Nanchang Economic Information Center, 11.Wikipedia – free encyclopedia, 2014
12. Source: Forbes, 11/2013
Key Factors of Acqua Norda Promotion in
China Premium Market
• Target audience: middle to high income consumers and
institutional purchasers
• Distribution area: industrial cities
• Distribution channels: institutional sales, food service
and retail
• Beautiful design of the bottle
Key Factors of Acqua Norda Promotion in
China Mass-Market
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Target audience: low income consumers
Distribution area: rural zones
Distribution channels: food service and retail
Competitive price of the
product
Acqua Norda SWOT Analysis
Strengths
•High quality of the product
•We have a net of the distributors
Weaknesses
•The brand Acqua Norda is not known in
China
•Good image of Italy as a country with
high quality standards of food and
beverages
Opportunities
•CAGR of Mass-Market and Premium
Bottled Mineral water is very high
•Increase in urban population and urban
disposable income in China
•Change in consumer behavior
Threats
•High level of competition
•We may be unable to manage future rapid
growth.
•The bottled water industry could face
slower growth.
Conclusion
• Population growth and accelerating urbanisation
are expected to be key driving factors for the
growth of bottled water over the forecast period.
• Chinese-style healthy drinks booming
• Increasing importance of branding in the fierce
competitive environment
• Packaging change affects consumer choice
• Food safety problem continues to challenge the
confidence of local consumers
References
1.
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4.
5.
6.
7.
8.
9.
10.
11.
12.
China Bottled Water - Market Report, New Zealand Trade and Enterprise, 2012,
http://www.prclive.com/pdf/uploads/Bottled%20water%20in%20China%20-%20September%202011.pdf
Water Supply Market Research Report, IBISWorld, 2013, http://www.ibisworld.com/industry/china/watersupply.html
Bottled Water in China, Euromonitor International, 2011,
Tibet 5100 Water Resources Holdings Ltd., Global offer, 2011,
http://hk.5100.net/files/pdf/Tibet%205100%20Water%20%20(1115.HK)_Prospectus%20ENG.pdf
Bottled Water in China,Euromonitor International, Apr 2013 , http://www.euromonitor.com/bottled-water-inchina/report
Want China Times ,11/2013, http://www.globaltimes.cn/content/749313.shtml
Olans, 2013,
http://webcache.googleusercontent.com/search?q=cache:9u3uKd6ZNkcJ:www.gzolans.com/en/shownews.asp
%3Fid%3D167+&cd=10&hl=ru&ct=clnk&gl=ru
China Daily, 2012, http://chinabevnews.wordpress.com/category/china-mineral-water/
Global Times (China), 2012, http://www.globaltimes.cn/content/749313.shtml
Wikipedia – free encyclopedia, 2014, http://www.wikipedia.org
Nanchang Economic Information Center, http://english.nc.gov.cn/aboutnanchang/economy/
Forbes, 11/2013, http://www.chinainternetwatch.com/category/economy-trade/
Thank you for your attention!