Reviewing the brand journey of Evergrande Spring Water, we believe it did many things right, but a proper brand positioning at the outset would have increased its chances of success.
What Evergrande Spring Water Did Right
The most correct move by Evergrande Spring Water was not following Nongfu Spring into natural water, nor following C'estbon and Wahaha into purified water. Instead, it evolved the drinking water category by creating the natural mineral water segment.
We believe the most important element of brand positioning is trend; if you fail to see the trend, you are against the times. For example, after Xiaoxiandun created the category of fresh stewed bird's nest with a 14-day shelf life, other bird's nest brands that did not follow this trend inevitably faced market shrinkage. Evergrande Spring Water focused on Changbai Mountain natural mineral water, clearly recognizing the category evolution trend of drinking water. Purified water is healthier than boiled water, mineral water is healthier than purified water, and natural water is healthier than mineral water. Along this category evolution trend, natural mineral water is healthier than natural water. Build your core advantage on the inherent weaknesses of competitors. We think this step was not thorough enough; Evergrande Spring Water should have renamed the category, not using "Changbai Mountain natural mineral water" but rather "deep mineral water" or "volcanic mineral water," listing Changbai Mountain as one of the water sources. One benefit of this is that it could unite with natural mineral water brands like Ganten to jointly grow the new category, making more allies. For example, if a melon seed brand positions itself as large particles, then rename the category to large-particle melon seeds. If focusing on the high-suction feature of range hoods, create a category of high-suction range hoods. If focusing on SUVs under 150,000 yuan, clearly define the category as economy SUVs. If opposing Dong-E E-Jiao, which is mainly for gifting, and making E-Jiao for self-consumption, then clearly define your category as self-use E-Jiao.
After clarifying the category, you need to rename it. Naming means birth.
First Mistake: Brand Extension
Whether a brand can extend depends on the competitive environment and the company's strength.
If there were no other drinking water brands, the name Evergrande Spring Water could be used because consumers have no choice. If the oatmeal category has no strong brand, then even if the brand equals melon seeds in the mind, it can extend to oatmeal.
But in the natural water category, there is Nongfu Spring, so the name Evergrande Spring Water is not good enough because consumers prefer expert brands. Even if the company thinks it is strong, it is insignificant to consumers because they only focus on the product at hand.
Arawana created the corn oil category, but the largest market share belongs to Changshouhua. When consumers choose corn oil, they do not care and cannot know that behind Arawana is the billion-level Yihai Kerry Group; they only care which brand appears more professional.
Arawana spans the major categories of rice, flour, and oil, clearly less professional in corn oil than Changshouhua.
However, even if the competitive environment allows brand extension, we do not recommend it because it leaves hidden dangers for the brand.
Motilium was once a brand for treating indigestion, then extended to treating stomach diseases. In an environment without strong competitors, this could work.
But this left an opportunity for Jiangzhong Jianwei Xiaoshi Pian, which focused on aiding digestion and repositioned Motilium as a brand for treating stomach diseases, not suitable for minor ailments like aiding digestion. Qiaqia has extended all the way to nuts and oatmeal; following this inertia, it might continue extending, though there seems no problem in the short term. But it also leaves opportunities for later entrants. If Qiaqia blindly listens to the advice of unprofessional design companies, it will repeat the fate of Evergrande Spring Water, Bawang Herbal Tea, and Motilium. We believe tragedies like Evergrande Spring Water will always exist, not only due to the brand's internal thinking inertia but also the great responsibility of unprofessional design companies.
Second Mistake: Misjudging Competitors
Evergrande Spring Water's advertisement—"What we transport is not surface water"—was clearly aimed at Nongfu Spring, and this attack did hit Nongfu Spring's pain point.
Given the severe water pollution in China, can Nongfu Spring's water sources be immune? Evergrande Spring Water's offensive forced Nongfu Spring to respond promptly, launching ads like "Fang Qiang Finds Water" and "What Kind of Water Gives Birth to What Kind of Life."
But Evergrande Spring Water misjudged its competitor. Priced at 4-5 yuan, it treated Nongfu Spring at 2-3 yuan as its rival, which is puzzling.
If Luckin Coffee benchmarking Starbucks, Qinghua Lang benchmarking Moutai, Feihe benchmarking imported milk powder, and Xiaomi benchmarking Huawei are converting the other's high potential, is the more expensive Evergrande Spring Water benchmarking Nongfu Spring raising or lowering its own status?
Why not benchmark brands like Evian or Alpz that cost dozens of yuan per bottle?
Some unprofessional design companies say to focus on consumers, not competition; consumers feed you, competitors don't.
In fact, unless it is a company that created an era like iPhone, Ford, or Microsoft, which can ignore competition, all other brands are competing for market share in an existing market. The first element of brand positioning is predicting trends; the second is analyzing the competitive environment.
Do unprofessional design companies really not know this? They pretend not to know.
We can even say you don't really know who your competitors are. For example, Dong-E E-Jiao's early competitors were not same-category brands but other nourishing brands; the early task was to make consumers choose E-Jiao over Cordyceps, ginseng, and deer antler. Dong-E E-Jiao should encourage, drive, and even help same-category brands to grow the E-Jiao market together.
But when same-category brands threaten its leadership, it must manage competition. Chinese companies are already struggling; we sincerely hope those unprofessional design companies stop confusing the public and serve clients with real skills and sincerity.
Third Mistake: Frequently Changing Slogans and Misusing Endorsers
We believe brand endorsers are a presentation of brand positioning; endorsers should match the brand's tone. For example, Wahaha purified water has long used Wang Leehom as its endorser; Wang's simple, focused, and healthy image aligns with Wahaha's brand tone.
Nike, Anta, and Li Ning all use sports stars as endorsers, which fits their brand tone. When Nike competed with Adidas, it deliberately emphasized rebellion and youth, using flamboyant athletes. After becoming the top sports brand, it intentionally showcased its endorsers' dominance, victory, and success to match its brand status.
Under Armour, in contrast, presents athletes' hard training and self-discipline in ads, forming a clear opposition to Nike.
Since Evergrande Spring Water's positioning is Changbai Mountain natural mineral water, its brand tone should be more professional, focused, and profound, but its chosen endorsers did not match this characteristic, or their similar traits were not presented.
Not to mention changing endorsers frequently, which not only blurred its brand image but also increased cognitive burden. From entertainment stars to sports stars, from beauty to health, from sports人群 to children, it's hard to know if it was rich and willful or desperate.
Fourth Mistake: One Source Supplying the World
The characteristics of the drinking water category determine that only purified water and mineral water can be produced without location restrictions. The reason is simple: the water sources for purified and mineral water are not limited by origin.
To expand supply, Nongfu Spring has laid out eight major water sources: Qiandao Lake in Zhejiang, Changbai Mountain in Jilin, Danjiangkou in Hubei, Wanlv Lake in Guangdong, Taibai Mountain in Shaanxi, Tianshan Manas in Xinjiang, Emei Mountain in Sichuan, and Wuling Mountain in Guizhou. As transport radius increases, transport costs rise. The only solution is building water sources, which is a huge cost for Nongfu Spring but also a solid moat. Evergrande Spring Water using a Jilin Changbai Mountain source to supply the northern market is already difficult, let alone supplying the world. This positioning had weaknesses from the start but was not taken seriously.
Brand positioning is not the east wind after everything is ready; it is the starting point of the brand.
Every brand has weaknesses. For example, Xiaoguan Tea's weakness is appearing old-fashioned, Qiaqia's weakness is spanning melon seeds, nuts, and oatmeal, purified water's weakness is lacking minerals, and Dong-E E-Jiao's weakness is being too gift-oriented. These are attack points for other brands and areas that brand owners should promptly address.
But it is rare to see a brand like Evergrande Spring Water actively digging pits and setting its own weaknesses. Fifth Mistake: No Category Education
What customers truly buy is not the brand but the category. Brand success is becoming the representative of a category. For example, when customers buy Nongfu Spring, they are actually buying natural water, and Nongfu Spring has become the representative of that category. When customers buy Feihe milk powder, they are actually buying domestic milk powder more suitable for Chinese babies, and Feihe has become the representative of that category. Category education requires patience and enough time to become common sense for customers. In the natural mineral water category, neither Evergrande Spring Water nor Ganten has done good category education. Ganten has a mining license, but it has not truly invested resources in promoting the category; instead, it has played an ad of "aristocrat in water" for years, telling customers the love story of mathematician Descartes and the Swedish princess. In category education, Nongfu Spring has done better. Nongfu Spring conducted a narcissus cultivation comparison experiment on CCTV's science channel, using natural water and purified water respectively, concluding that narcissus grown in natural water grew faster. To deepen customers' impression of natural water, Nongfu Spring hid its brand to promote the category, not mentioning the brand, and publicized how natural water benefits children's health. These category education activities subtly shaped customers' preference for natural water, and Nongfu Spring is the representative brand of natural water. But category education requires patience and enough time. Evergrande Spring Water followed the experience of real estate and football, but FMCG differs from monopolistic markets. Practices in monopolistic and semi-monopolistic markets are ineffective in fully competitive markets.
Attempting to create a brand simply, crudely, and quickly through mass communication is what we call "a storm in a teacup." It seems to make earth-shattering moves, but because it ignores customer sovereignty and the laws of customer cognition, its influence is limited to a local time and space.
Category education is like igniting a grassland, not a sea. You need to find the combustible material in customer cognition; advertising is just the tiny spark. Grasslands have combustibles; seas do not.
Evergrande Spring Water's approach was like trying to ignite a sea with a match.
If It Could Be Done Over
What should Evergrande Spring Water have done? At the very least, it should have renamed the brand, putting Evergrande Group's name on the back of the packaging. Most importantly, it should have correctly analyzed the competitive environment, identified competitors, and found its core benefit point. Then all PR, advertising, endorser choices, and product pricing should start from this core benefit point, with all tactics executed around the strategic core.
It sounds simple, but in practice, mistakes are often bizarre. Because the consequence of not valuing brand positioning is finding creative ways to die. Evergrande Spring Water's failure proves that even with a lot of money, you cannot change customer cognition. The name "Evergrande" is already tied to real estate; in customer cognition, Evergrande Spring Water feels like Bawang Herbal Tea: one is drinking water with a cement taste, the other is herbal tea with a shampoo taste. Some might ask why Evergrande Football succeeded. Because football is a market with insufficient competition, where the power of customer cognition is not as strong. But in the fully competitive FMCG market, customer sovereignty is strong enough; any brand ignoring cognitive laws will be punished by natural laws. Evergrande Spring Water guessed the beginning but not the end. It clearly created the natural mineral water category but did not truly make the new category the first choice for customers. This is partly due to path dependence, applying monopolistic market practices to a fully competitive market, and partly due to ignoring customer cognitive laws; even spending 6 billion on advertising cannot create a brand.