Introduction: Electrolyte water is becoming a new growth driver in the beverage market. After the relaxation of pandemic prevention policies, the number of new COVID-19 cases nationwide has been increasing. Following the sell-out of yellow peach canned goods, ibuprofen, and Lianhua Qingwen, electrolyte water also experienced panic buying. Previously, multiple media outlets reported that electrolyte water sold out on various platforms. Searches related to electrolyte water surged; on the social platform Xiaohongshu, multiple science videos and articles about electrolyte water received over 100,000 likes. As of now, platforms such as JD.com, Taobao, and Meituan have resumed normal sales. At this special juncture, the panic-bought electrolyte water became a hit product in the beverage market at the end of 2022, accelerating the popularization of the 'electrolyte' concept among consumers and bringing more changes and possibilities commercially.
The Past and Present of Electrolyte Water From a commercial perspective, this is a crucial opportunity to redefine the consumption scenarios of electrolyte water, much like how Wanglaoji pivoted to hotpot during the SARS period, reinterpreting herbal tea with the classic slogan 'Afraid of getting heaty? Drink Wanglaoji.' Can electrolyte water replicate the success of Wanglaoji? Before answering this, we must first address: What is electrolyte water? Simply put, water and electrolytes are essential for maintaining human life. Electrolytes include sodium, potassium, and other trace elements needed by the body. A deficiency can cause symptoms like dizziness and fatigue. Drinking electrolyte water helps replenish these to maintain balance. In the National Health Commission's 'Diagnosis and Treatment Protocol for COVID-19 (Trial Version 9),' under 'General Treatment,' it states: 'Ensure adequate energy and nutritional intake; pay attention to water and electrolyte balance to maintain internal environment stability.' Additionally, the Chinese Center for Disease Control and Prevention's 'Public Prevention Guide for COVID-19: Temporary Dietary Nutrition Guide' also mentions 'appropriately supplement drinking water containing a certain amount of electrolytes.' In other words, after contracting COVID-19, symptoms like diarrhea and fever with sweating can lead to loss of water and electrolytes, causing imbalance. Supplementing electrolytes helps stabilize the internal environment. This is why electrolyte water was panic-bought.
Before the buying frenzy, electrolyte water was popular only in niche areas, such as fitness and sports enthusiasts; ordinary consumers did not pay special attention to it. In fact, electrolyte water has been around for nearly 60 years and appeared early in the Chinese market. In 1965, electrolyte water was invented in the United States by researchers at the University of Florida, named 'Gatorade,' to help American football players avoid dehydration during hot and humid games. In 2001, Gatorade merged with PepsiCo and became a Pepsi brand. In China, Jianlibao was the first to launch a beverage with alkaline electrolyte in 1984, but due to limited consumption scenarios and consumer awareness, it did not make waves. During the SARS outbreak in 2003, increased health awareness brought electrolyte water some market attention, but sales did not surge significantly. That same year, Japan's Pocari Sweat entered the Chinese market and remains a major player. Early players were mainly foreign brands; besides Pocari Sweat, Pepsi's Gatorade entered China in 2005, focusing on professional sports events. Because early players were foreign and focused on sports, electrolyte water did not penetrate daily consumption scenarios. It remained known only to a niche group and was lukewarm for years. It wasn't until the era of nationwide fitness and growing health consciousness that more companies began to enter, gradually bringing electrolyte water into daily scenarios. After this buying spree, electrolyte water has accelerated its entry into daily consumption, with the concept 'drinking electrolyte water maintains electrolyte balance' entering the public eye. This presents a golden growth opportunity for businesses. Can major players capitalize on this to continue the hit product myth and expand consumption scenarios?
Expanding Consumption Scenarios: From Sports to Daily Life Currently, the overall beverage market has reached a trillion-yuan scale, and the functional beverage segment has reached tens of billions. Can electrolyte water seize this opportunity to open up a larger market? Currently, there are two main consumption scenarios: sports and daily life. Let's first look at sports.
Market Entry via Sports Scenarios From its history, sports is the primary consumption scenario for electrolyte water, including Gatorade and Pocari Sweat, both of which started in the sports market. In terms of demand, electrolyte water is a necessity for sports enthusiasts. Entering through sports scenarios is a key step for market penetration. Clear scenarios and demand naturally attract business investment. American brand Gatorade was the first to benefit. Leveraging North America's 37% share of the global sports drink market, Gatorade quickly captured over 80% of the global sports drink market share. In 2005, the dominant player began expanding into China, Asia's largest economy. However, due to limited consumer awareness, Gatorade could only target professional sports, failing to open up daily sports scenarios. Not only foreign brands struggled; Jianlibao, which introduced the concept to China, also remained lukewarm. It wasn't until 2021, when the pandemic spurred home fitness trends and outdoor activities like cycling and running, that consumer health awareness increased, ushering in a 'fitness-for-all' era. That year, Genki Forest's Alien electrolyte water launched, leveraging favorable conditions to enter via sports scenarios and push electrolyte water into the spotlight. Data shows that in 2021, on Tmall's Double 11 functional beverage store ranking, Alien surpassed Thai Red Bull and Japan's Pocari Sweat to take the top spot. In 2022, Alien's monthly sales exceeded 100 million yuan in Q1, and in the first nine months, it grew rapidly with a 149% year-on-year increase, reaching 1 billion yuan in sales, becoming the company's second super product.
Pandemic Boost and Scenario Expansion In December, with adjustments to pandemic prevention policies, a wave of infections swept the country, leading to panic buying of products that could alleviate symptoms, including vitamin C effervescent tablets, yellow peach canned goods, and electrolyte water, which saw huge sales growth. This pandemic served as free market education, introducing electrolyte water to more consumers. During the buying frenzy, electrolyte water accelerated its entry into daily scenarios. Data shows that in mid-December, Alien's weekly sales on e-commerce platforms grew 1,327% month-on-month, and on home delivery platforms, weekly sales grew 1,000%. JD Supermarket data from December 12 showed that from December 1-12, electrolyte water transaction value grew over 10 times. Pocari Sweat and Nongfu Spring's Jianjiao both sold out, with manufacturers increasing production lines and manpower. According to Baidu Index, searches for 'electrolyte water' and 'electrolyte beverage' began to surge from December 5, peaking on December 15. In the past month (2022.11.30-2022.12.29), the overall heat for 'electrolyte water' surged 5,923% month-on-month. On Xiaohongshu, there are over 60,000 posts about electrolyte water.
△ Baidu Index search heat for 'electrolyte water'
With the pandemic's boost, electrolyte water became a national beverage. In fact, the trend toward daily scenarios was already emerging. According to Tmall Innovation Center's '2022 Electrolyte Water Trend Report,' demand in scenarios like outdoor travel, fatigue from work/study, poor physical condition, and gaming/esports has been stimulated, becoming new consumption scenarios. In Japan, Pocari Sweat has refined consumption moments to include hot summer days, colds, after drinking, after bathing, and light indoor exercise. Data shows that from March to May 2019, Pocari ranked first in Japan's sports drink market, surpassing Coca-Cola and Suntory. Moreover, Pocari has become a national beverage in Japan, consumed by all age groups. It can be said that electrolyte water has formed a 'dual-core' characteristic of sports + daily life. With sports as the core scenario, developing sub-segments in daily scenarios is a future trend.
Who Will Dominate the Electrolyte Water Market?
Electrolyte Water as a New Beverage Trend Although electrolyte water is a sub-category under functional beverages, its growth suggests potential to become the next blockbuster product. According to Tmall Innovation Center's '2022 Electrolyte Water Trend Report,' from April 2021 to March 2022, functional beverages grew 38%, the fastest among beverage categories. Within functional beverages, electrolyte water led with 225% growth, making it a new growth driver. The buying spree further fueled sales. According to CBNData and Tmall's '2021 Beverage Consumption Trend Insight' report, from 2019 to 2021, the number of non-sports consumers purchasing electrolyte water on the platform increased 12 times. On the other hand, the overall beverage market is primarily driven by young consumers. Specifically, in the electrolyte water market, new white-collar workers, middle class, and Gen Z are the main consumers, aligning with overall trends. Consequently, along with established players, many companies have entered the electrolyte water segment.
More Players Entering Previously, China lacked a dominant electrolyte water product. Although many companies had beverages containing electrolytes, they did not promote them as such, emphasizing sports drinks instead. To fill this gap, Alien's product manager stated they aimed to create a truly electrolyte-rich beverage to change consumer misconceptions. With Alien's sales exceeding 1 billion yuan in the first nine months, Genki Forest proved the potential, attracting more companies to accelerate their entry. On May 24 this year, Pocari Sweat invited a famous actress as brand ambassador to expand daily consumption scenarios in China, but with limited effect; it was the buying spree that introduced Pocari to consumers. As a trend, traditional beverage giants are not missing out. Nongfu Spring launched the third-generation 'isotonic' Jianjiao in 2021, and C'estbon, a rival, upgraded its sports drink 'Moli.' Following Alien's success and traditional companies' entry, other players joined, including Meirishandao, Shuilisu, Panpan, and Liziyuan, and even sportswear brand Decathlon launched a low-sugar sports drink. Additionally, beyond liquid electrolyte water, solid electrolyte drinks (electrolyte powders) have become a focus. Pocari's Tmall flagship store shows that its electrolyte powder monthly sales are three times that of its liquid electrolyte water. Meirishandao and Shuilisu are also focusing on solid electrolyte sub-segments. Overall, electrolyte water has attracted more players, and the category is expanding from liquid to solid. It is expected that electrolyte water sales will continue to grow in 2023. On this new trend, who will win or lose, and what hot products will emerge, remains to be seen.
Final Thoughts: Thanks to the electrolyte water buying spree, the 'electrolyte' concept has entered the public eye. With the nationwide fitness trend and growing health awareness, electrolyte water has moved from sports to daily scenarios, with the 'sports + daily' dual-core characteristic becoming the main trend. As a new beverage trend, the influx of players has intensified competition. How companies innovate in the electrolyte water segment and launch more satisfying products will be a key test.