Source丨Zebra Consumption

The peak bottled water season has just ended, and while the FMCG giants have temporarily eased off, the second-tier small giants are all taking action.

Tibet Water Resources plans to change its name to re-emphasize the strategic position of 5100 mineral water, aiming to return to the core business of bottled water; Runtian's backdoor listing via ST United is steadily progressing; and Quanyangquan from Northeast China is focusing on expanding into Beijing and the central China market.

They all know that selling water is still profitable. In the first half of this year, both Quanyangquan and 5100 achieved growth through their bottled water businesses. At the same time, the bottled water business still has structural opportunities due to the premiumization trend and the rise of new channels.

However, the all-out war among the giants also puts them under immense pressure, serving as a wake-up call for Quanyangquan, Runtian, and 5100 to fight with their backs against the wall. The CR5 of the bottled water market has reached 60%, and the next few years will determine whether they can remain in the mainstream market.

Second-tier bottled water companies are gearing up

Last week, Tibet Water Resources (01115.HK), the parent company of 5100 Tibet Glacier Mineral Water, announced that it would change its company name from "Tibet Water Resources Co., Ltd." to "5100 Tibet Glacier Co., Ltd."

Using the bottled water product name as the company name signals the company's return to its core business after cross-industry attempts, making water the focus going forward.

In fact, this is not the first time the company has changed its name.

Tibet Water Resources was established in 2005 and secured an order from China Railway Corporation the following year. At that time, with a high-speed rail ticket, one could get a free bottle of 5100 mineral water at major train stations. This obscure local brand thus became famous.

Around 2015, the cooperation ended, and the company's business plummeted. Tibet Water Resources, which used to easily earn 300-400 million yuan a year, saw its performance gradually decline and has recorded consecutive losses in recent years.

In desperation, it launched a highland barley beer brand and changed its name from "Tibet 5100 Water Resources Co., Ltd." to "Tibet Water Resources Co., Ltd.," removing the 5100 attribute.

However, competition in the beer market is even fiercer than in bottled water. The new brand, Highland Barley Beer, failed to gain significant market share, and the business remained sluggish, becoming a major reason for the company's continued losses in recent years.

In times of crisis, the water business came to the rescue. Leveraging the brand advantage of "Tibet's Good Water" and actively expanding new channels, 5100 mineral water sales increased by 54.1% year-on-year in the first half of this year, with revenue up 117.6%. The listed company Tibet Water Resources reported revenue of 169 million yuan for January-June 2025, up 21.4% year-on-year, and net profit of 36.191 million yuan, up 300.5%.

The company then renamed itself again to highlight 5100 mineral water, demonstrating its determination to reinvest in the bottled water business.

On the other side, in the Jiangxi market, Runtian's plan to inject assets into ST United (600358.SH) is also proceeding in an orderly manner.

Runtian is a long-established bottled water brand in Jiangxi. In its early years, it focused on the local market with a 1-yuan water strategy. In recent years, it has focused on building the mineral water brand Runtian Cui. It currently holds a 60% market share in Jiangxi Province, is known as "Jiangxi Province Water," and ranks among the top ten bottled water companies in China.

However, Runtian's plans to go public have been unsuccessful for years. Coincidentally, ST United, also owned by Jiangxi state-owned assets, has been struggling with low business performance and urgently needs restructuring. The two hit it off, similar to the capital story of Quanyangquan.

Quanyangquan, formerly known as "China's First Forestry Stock" Jilin Forest Industry, acquired the Quanyangquan mineral water business in 2017, becoming the "First A-share Mineral Water Stock." By this calculation, Quanyangquan went public earlier than Nongfu Spring and China Resources Beverage.

In its early days, Quanyangquan mainly focused on the Northeast market, and in recent years expanded to the outskirts of Beijing. At the same time, like 5100 mineral water, it has been pursuing pan-national expansion through channels such as PetroChina and airlines.

In its 2025 interim report, the company stated that it is focusing on developing the central China market and is in talks with regional supermarket chains such as Hubei Huangshang, Zhongbai, Haolinju Yuehuoli, and Henan Baixin.

Whether it is Quanyangquan, which is already listed, Runtian, which is planning to go public, or 5100, which is returning to the bottled water business, they are all building strength for the upcoming bottled water war.

The bottled water market still has opportunities

In 1989, C'estbon launched the first bottle of bottled water in Shenzhen. Its founder, Zhou Jingliang, is hailed as the "Father of China's Packaged Water." Later, he also founded Ganten.

In 1995, Wahaha launched both mineral water and purified water products. The following year, it invited Jing Gangshan as spokesperson, singing "My Eyes Only Have You," and quickly became the first-generation leader in bottled water. Later, with Wang Leehom as spokesperson for 20 years, Wahaha purified water became one of China's classic FMCG products.

In 1996, Zhong Shanshan founded Nongfu Spring (09633.HK). From "Nongfu Spring is a bit sweet" to "Nature's Porter," the brand gradually rose to the top of the bottled water market.

Over the following years, with the comprehensive development of the consumer market, bottled water penetration continued to rise, the market size grew rapidly, and leading brands emerged one after another, staging a "big water, big fish; big fish, lively water" drama in the bottled water market.

The market expects the bottled water sector to exceed 300 billion yuan in 2025, firmly holding the top position in China's beverage market. Among them, the five giants—Nongfu Spring, China Resources C'estbon, Ganten, Wahaha, and Master Kong—together hold 60% of the market share.

Although the five giants are all powerful, compared to the beer market where CR5 exceeds 90%, the bottled water market offers more room for small and medium-sized giants to survive, and has already nurtured a number of second- and third-tier brands. Among them, Quanyangquan, Runtian, and 5100 are the standouts.

The primary reason is that, unlike beer, which is more industrialized, the bottled water business relies on water resources. Not just Nongfu Spring, everyone is a porter of nature.

This leads to a situation where any region rich in water resources can give birth to its own bottled water brand. As long as companies obtain the approval, they can take water, package it, and sell it. The cost of the product itself is almost negligible; it still comes down to brand and channel operation capabilities.

In addition, bottled water is heavy and low-priced, making it more constrained by sales radius than beer products. National brands like Nongfu Spring mostly build factories near water sources to serve local markets. Quanyangquan and Runtian can thus hold on to their home markets.

At the same time, the bottled water market is clearly stratified. In terms of value, natural mineral water > natural water > purified water and other drinking water. Leading brands mostly enter the market with lower-priced natural water or purified water. In contrast, small and medium-sized giants mostly establish themselves with mineral water, standing at the top of the industry's value chain.

As a result, second-tier mineral water giants generally have relatively higher profitability. Quanyangquan, which sells mineral water, had a gross margin close to 45% last year, far exceeding the industry average.

Moreover, as the entire bottled water market embraces premiumization and various new channels reshape the market landscape, the biggest changes are actually happening for those second-tier companies that were once pushed to the wall.

Looking at the latest performance, besides 5100, Quanyangquan and Runtian have also achieved growth far exceeding the industry. Last year, Runtian's operating revenue and net profit increased by 9.39% and 21.49% year-on-year, respectively. In the first half of 2025, Quanyangquan's beverage business saw growth rates of 14.50% in sales volume, 11.63% in revenue, and 10.02% in net profit.

Fighting for the last few tickets

The relatively balanced state of the bottled water market and the steady increase in value have been gradually disrupted since last year.

Competition in the entire beverage market has entered a white-hot stage. Data shows that in 2024, the number of new products in China's beverage market increased by 496,000, up 17.8%.

Giants like Nongfu Spring and China Resources Beverage (02460.HK) have all faced growth pressure, especially in their bottled water businesses. As a result, led by Nongfu Spring, the giants are attacking on all fronts, with the focus on bottled water.

On one hand, Nongfu Spring, based on its classic red-bottle natural water business, launched a green-bottle purified water to attack the core markets of China Resources C'estbon and Wahaha. On the other hand, based on its original mineral water business, it launched a highly cost-effective mineral water new product in December last year, with a promotional price of 18 yuan for 15 bottles.

In the first half of the year, Nongfu Spring secured three new water sources, one of which is in the Nyenchen Tanglha Mountains in Tibet, which may in the future replace the "Tibet's Good Water" perception of 5100. Is Tibet Water Resources feeling the chill?

Driven by Nongfu Spring, the most intense war in the bottled water market spread from 2024 to 2025, and eventually the entire industry joined this extreme involution.

China Resources Beverage's strategy is similar: on one hand, it promotes large-format water and launches the Jialinshan brand alongside C'estbon; on the other hand, it launches the high-end mineral water brand C'estbon Dew.

Wahaha achieved performance growth in 2024 through the "traffic effect," but faced sudden changes in 2025. Recently, in addition to Wahaha, it has spun off brands like Waxiaozong and Waxiaozi.

This fragmentation and restructuring pose challenges for both Wahaha and Hongsheng Beverage Group. But for other small and medium-sized brands in the market, it has invisibly added several strong competitors, increasing pressure.

In the past 20 years, the average price of bottled water in China has risen from over 1 yuan to over 2 yuan, and the mainstream product price has shifted from 1 yuan to 3 yuan. In the last two years, the overall price of natural water and purified water has been forced down from 2 yuan to around 1 yuan, and mineral water prices have dropped from over 3 yuan to around 2 yuan.

Therefore, whether it is Quanyangquan (600189.SH), Runtian, 5100, or other small and medium-sized brands, they all have to build strength for the upcoming protracted war.

How should we view the future landscape of China's bottled water market? Perhaps we can learn from the beer and baijiu industries. A few national brands plus a few local brands, or a few leading big brands plus a few differentiated brands, will take the vast majority of the market; not only will the industry CR5 continue to rise, but perhaps the industry CR10 could reach over 90%.

However, the latter half of the ranking is still not fully determined, and everyone is fighting for the last few tickets.