「议食圈」整理编辑 ● ●● The mineral water industry was once stable, with major players like Kangshifu and Nongfu Spring each holding their own territories. However, since JDB launched Kunlun Mountain premium mineral water, the industry landscape has been disrupted, and subsequently Evergrande and Sinopec have joined the fray. How much gold does this industry actually hold? How will the battle among these giants unfold? These are questions worth watching. Since Evergrande launched Evergrande Spring, the domestic water market has been anything but calm. Will the market landscape, seemingly balanced among Nongfu Spring, Kangshifu, China Resources C'estbon, Kunlun Mountain, Tibet 5100, etc., change with the entry of newcomers? How much gold does the water industry really contain, attracting so many outside giants to pan for gold? Big Companies Cross Over to Sell Water Water Industry Becomes a Hot Potato In January 2015, Evergrande announced its foray into the water industry, and Evergrande Spring was born. With Evergrande's strong financial backing, the full-channel layout of Evergrande Spring was quickly completed. Additionally, the water source in Changbai Mountain allowed Evergrande to "declare war" on the world. Under the concept of "one source supplying the globe," Evergrande Spring has signed contracts with distributors in 28 countries, aiming to export globally like France's Evian, leaving the market with much anticipation. Now, Sinopec, the "oil seller," is venturing into the water industry. Sinopec recently announced that it will join forces with Tibet Plateau Natural Water Co., Ltd. to create "Easy Joy·Zhuoma Spring" natural glacier drinking water, marking its cross-industry entry into water sales. Sinopec has confidence in selling water, with its 23,000 Easy Joy convenience stores nationwide serving as the foundation. The Easy Joy stores within Sinopec's relatively closed gas stations already sell water, but these brands are not Sinopec's own. Rather than helping others raise their children, it's better to raise one's own. With water profit margins exceeding 50%, this cake is substantial. Regarding Sinopec's entry into the water industry, Zhu Danpeng, a researcher at the China Food Business Research Institute, told reporters that Sinopec already has its own channels and previously sold water through OEM and joint operations. Creating its own brand water will inevitably boost the company's profits. The entry of major enterprises like Evergrande and Sinopec into the water industry is bound to change the brand landscape, a consensus already formed within the industry. "Sinopec's water (Easy Joy·Zhuoma Spring priced at 2 yuan per bottle) will inevitably squeeze the market share of other branded waters, and sales of other brands in Sinopec convenience stores will definitely shrink," Zhu Danpeng said. In Zhu's view, with rising health awareness and the concept that drinking water is healthier than soft drinks, the water industry is poised for explosive growth with broad prospects. Additionally, the relatively high gross margins in water are also reasons attracting big players to enter the market. Similarly, Liang Mingxuan, a food industry researcher at CIC Consulting, told reporters that the stable development of drinking water within the overall beverage industry is a key reason for many companies to cross over. The participation of outsiders like Evergrande Spring and Sinopec will also have an impact on other water companies. Regarding Sinopec and Evergrande selling water, Zhu Danpeng stated that Sinopec's water business is a sure win, while Evergrande's strategy of entering the FMCG industry to sell water is correct and beneficial for its medium- to long-term development. Its main challenge lies in market operations. Brand Landscape Will Change Competition Intensifies in the 5-Yuan Price Range Data shows that in 2013, the market shares of Kangshifu, Nongfu Spring, Wahaha, China Resources C'estbon, and Coca-Cola in the drinking water industry were 23%, 22%, 18%, 9%, and 7%, respectively. Among these, purified water, mineral water, natural water, and mineral water accounted for 44%, 28%, 13%, and 9% of drinking water, with other types at 6%. Additionally, purified water and mineral water have shown slow growth, while natural water is developing rapidly. High-end waters like Tibet 5100 Glacier Mineral Water and Kunlun Mountain also hold certain market shares. However, with more companies entering the water industry, the brand landscape is bound to change. In fact, water companies like Nongfu Spring and Kangshifu have been cultivating the industry for years and have established brands that are hard for newcomers to shake. Tibet 5100 Glacier Mineral Water (with 300ml bottles averaging at least 7 yuan) and Kunlun Mountain, given the relatively few domestic high-end mineral water brands, have also secured their market shares, making this segment difficult to disrupt. "The top and bottom of the pyramid are less affected, but competition in the mid-price range and mid-to-high-end brands will intensify, and the competition between Kunlun Mountain and Evergrande Spring, both using full-channel sales, is also fierce," Zhu Danpeng said. A representative from Nongfu Spring interviewed by reporters also stated that the launch of Evergrande Spring has not impacted Nongfu Spring. In fact, after Evergrande Spring's launch, there were rumors that it squeezed Kunlun Mountain's market share. Since then, Kunlun Mountain's advertisements have become more frequent in the media. Although there is no sales data for Evergrande Spring currently, from channel distribution, it can be seen in places ranging from high-end venues to small tobacco and alcohol shops. In Zhu Danpeng's view, Evergrande Spring and Kunlun Mountain have almost identical pricing and channels, so competition between them exists. Zhu noted that although Evergrande Spring and Kunlun Mountain are priced in the mid-to-high range, they adopt a full-channel strategy. However, high-priced water doesn't sell well in small shops. If it doesn't sell, retailers stop stocking it, and water left on shelves can be affected by dust, harming the brand image. The mismatch between price positioning and channels is a problem both face, so he is not optimistic about their long-term development. Furthermore, competition in the 5-yuan price range will intensify, as water experts have concluded. "Brands in this price range won't grow too fast. Who will rise or fall will be seen in the first quarter of 2015." "Competition in the 2-5 yuan range is fierce and uncertain. For example, Kunlun Mountain, Evergrande Spring, and Zhuoma Spring will all make more marketing efforts, leading to more uncertainty," Liang Mingxuan said. In fact, reporters visited some water sales points in Beijing, where they found that most water sold in tobacco and alcohol shops is low-priced, and water above 5 yuan doesn't sell well. Water Sources Receive Unprecedented Attention Water Companies Engage in "Underground Battle" Over Water Sources After Evergrande launched Evergrande Spring, the most prominent words in its advertisements were undoubtedly "Changbai Mountain water source." Evergrande Spring, sourced from Changbai Mountain, heavily promotes the "world's three major golden water sources" as a selling point. Evergrande Spring's ambition of "one source supplying the globe" is also based on its water source. "The world's three major golden water sources, pure and pollution-free, rich in stable natural minerals," is Evergrande's confidence. This is why Xu Jiayin, chairman of Evergrande Group, has always wanted to build Evergrande Spring into China's largest mineral water enterprise with a capacity of ten million tons. Additionally, in March 2014, the National Health and Family Planning Commission website published a draft for the national standard for "Packaged Drinking Water." The draft had two highlights: first, the name "drinking mineral water" was banned; second, the "total colony count" and pH indicators that had long troubled water companies were removed. As a result, brands of "drinking mineral water" face the risk of exiting the market, with Kangshifu's mineral water facing this challenge. In July, Kangshifu promoted its mineral water as a new product on its website, with the Changbai Mountain water source also being a selling point. According to reporters, while Evergrande vigorously promoted the Changbai Mountain water source, Nongfu Spring and Wahaha also increased their water source promotions. Among them, Nongfu Spring's documentary on finding water sources touched many consumers and demonstrated the company's perseverance and commitment to finding quality water. In fact, in the summer of 2014, the Changbai Mountain water source was the most favored in the water industry, and water companies launched a new round of underground battles around Changbai Mountain. Furthermore, Sinopec, which just announced its entry into the water industry, also uses the concept of Tibetan glacier water for its "Easy Joy·Zhuoma Spring." In the high-end water market, Tibet 5100 Glacier has dominated, thanks to "glacier water." Additionally, Kunlun Mountain natural mineral water originates from the Yuzhu Peak of Kunlun Mountain in the Sanjiangyuan area of Qinghai Province. "Water source determines water quality is a recognized truth in the industry. Consumers are upgrading from safe water to healthy water for daily drinking, and having a water source with healthy quality is undoubtedly one of the indicators for consumers to choose good water," an industry insider told reporters. In fact, two years ago, water companies rarely mentioned water sources; everyone was quietly making products. Now, water sources have been elevated to unprecedented heights. In the view of industry insiders, the water industry is highly homogeneous, and playing the water source card is a way to differentiate and achieve better sales, a result of intensified competition. Small brands without good water sources will retreat to their local markets. A person with years of experience in the water industry told reporters that more and more water companies emphasizing water sources is beneficial to consumers and reflects a responsible attitude towards consumers. However, in Liang Mingxuan's view, natural water and mineral water companies are actively promoting their water sources, especially high-end water. For ordinary mineral water and natural water, promoting the water source is inevitable, as it is a key factor in attracting consumers when price and channels are the same. For high-end mineral water, overemphasizing the water source may be biased; companies should focus more on building and promoting brand value. -END- Original Selection Click the title below to read directly: [Line Sales Representative Practical Operation Guide (with full PPT download attached) Excellent Product Recommendation: The best domestic FMCG distributor learning platform Dedicated to providing professional, practical, and actionable tutorials for companies and distributors Committed to helping Chinese FMCG distributors grow rapidly Reply with number 「1」 to view 1067 articles essential for distributors Including 14 categories and 57 knowledge points From manufacturers to customers, practical and management-focused All practical content If you haven't followed yet, please long-press the QR code below Project Consultation | Promotion Cooperation Please call To join the group, click: Read Original