If last year's soda water market merely hinted at a trend, this year's full-blown, flourishing market will surely reshape your perception of the category. Leading brands such as Nestlé, Watsons, Wahaha, Tsingtao Beer, Uni-President, Nongfu Spring, Coca-Cola, Budweiser, and Yili have entered the fray. Judging by the new product launches and upgrades from these dozens of major brands, the entire soda water market is experiencing a new peak. This is completely different from the soda water situation a decade ago. No one ever imagined that the once-ephemeral soda water category could revive so fiercely, attracting countless companies.

-01- Background of the Arena According to Nielsen data, from 2017 to 2018, the overall sales of the soda water market grew by 36.9%, far exceeding the overall beverage growth of 3.1%. In 2020, the estimated market size is 20 billion yuan, and in the next five years it will exceed 46 billion yuan, with a growth rate of over 15%. From the product attributes of new launches, it is clear that most products revolve around the two keywords "soda" and "sparkling," or combine them in the naming. Although, from a composition standpoint, these do not fully align with the objective definitions of soda water and sparkling water, the reason brands flock to them is the massive traffic and the perception of the new generation of young consumers towards soda sparkling water. However, behind this trend is one company that cannot be ignored: Genki Forest. It can even be said that Genki Forest defined soda sparkling water. We see that on Tmall's Double 11 and 618 beverage charts, Genki Forest has firmly secured the top spot, a position that is hard to shake. Before Genki Forest became popular, many brands had already tested the waters in this field, but sales remained lukewarm. Watsons is one of the earlier brands in the soda water category, once dominating most of the mainland soda water market with its 4-yuan price point. It primarily offered classic canned soda water until this May, when it launched a new bottled product, though it is still rarely seen in the market and not yet widely known. There is also the veteran soda water brand Mingren, a traditional pharmaceutical company focused solely on the soda water category. Mingren's products emphasize health, positioned at a 3-yuan mass-market price point. However, its target consumers have always been those whose perception is still stuck on alkaline water, which is quite limited and fails to win over the younger generation of consumers. In June 2018, Mingren launched a new colorful soda series product, "Mingren Soda Sparkling Water," featuring zero calories, no sugar, and plenty of bubbles. After its launch, it was intended to capture the youth market, but due to a lack of new approaches in channels and promotion, it hasn't caught up with its own older products.

-02- Why Genki Forest? Founded only four years ago, why has Genki Forest been able to revitalize a category and even defeat many established players in the market? What is the underlying logic?

1. Background: Consumption Upgrade and the Rise of the New Middle Class Over the past decade, China's consumption structure has undergone significant changes. The true drivers of change and consumption upgrades are the new middle class, aged 20 to 45, who prefer mid-to-high quality, follow trends, and are willing to share. From 2020 to 2025, China will see 500 million new middle-class consumers. What is their consumption psychology? Low-priced items are increasingly untenable; they seek the spiritual satisfaction brought by quality and brands. Essential needs are replaced by taste, style, and labels; pragmatism is replaced by emotion, atmosphere, and scenarios; necessary items are replaced by desired and trendy ones. Products must not only provide a function but also soothe the mind and emotions. Genki Forest has precisely captured this new middle-class demographic, primarily white-collar workers in first- and second-tier cities. By focusing on their daily life trajectories, Genki Forest launched a concentrated assault on elevator ads, convenience stores, and Xiaohongshu, quickly gaining its core loyal user base. Catching the dividend of consumption upgrade is not luck for Genki Forest; it found the right channels and strategies. In fact, POPSS sparkling water, launched by Baorun in 2017, was formidable in terms of product formula, target audience, and market investment. It even had Wang Ziwen as a spokesperson and appeared in popular shows like "Running Man" and "Ode to Joy 2." However, years later, the product has not taken off. The reason is that its promotional efforts were heavy but ineffective. So, in today's consumer market, while consumption is upgrading, if brands continue to fight price wars, promotion wars, and traffic wars in a homogenized market, there is no way out. Brands need to reshape and upgrade, symbolizing youth and trendiness.

2. Product Strength The second factor in Genki Forest's success is its effective capture of the product dividend from the rise of health consciousness. In packaging, Genki Forest adopts a fresh Japanese style, with the prominent label "0 sugar, 0 fat, 0 calories," clearly expressing the brand's attitude in its appearance, which also meets consumers' needs for aesthetics and health. In the product itself, Genki Forest focuses on the concept of soda sparkling water, leveraging the similar stimulating taste of sparkling water to carbonated drinks to tap into the massive carbonated beverage market. In consumers' minds, carbonated drinks are irresistible yet bittersweet—they love the unique taste but worry about the health risks of high sugar. Now, a drink with the same taste but healthier is available—who wouldn't be tempted? In fact, with increasingly mature food R&D technology, decarbonation is already a trend. The two cola giants, the pioneers of carbonated drinks, are also moving in this direction. And with the innovation in soda water, fueled by Genki Forest's explosive popularity, the market is becoming more vibrant, with major brands eager to try. For example, Tsingtao Beer has added seaweed extraction technology to soda water, and Yili has developed a beer-flavored sparkling water. These new attempts will inject fresh vitality into the category.

3. Marketing Strength To further segment the new middle class, according to Mintel's report, more women, young consumers (aged 20-29), and middle-to-high-income earners (household monthly income of 8,000-15,999 yuan and 16,000 yuan or above) are the main consumers of soda sparkling water in the market. To win over these groups, Genki Forest has implemented marketing strategies across online and offline dimensions. Online, it has maintained continuous exposure on social media platforms like Xiaohongshu, coupled with active promotion by celebrities and KOLs, allowing it to quickly reach a large number of precise consumers in the early stages. Offline, Genki Forest chose Focus Media elevator advertising, which best matches its target audience. It is said that after the online explosion, Genki Forest invested several hundred million yuan in advertising on Focus Media, leveraging its influence over 300 million precise C-end consumers to successfully transform from an internet-famous brand to a star brand. In an environment where traditional advertising methods have become ineffective, where are the target groups for brands like Genki Forest? Certainly not those watching TV at home, nor those who can tolerate 15-second or longer ads in mobile videos. So, how does a brand attract the attention of these people? Genki Forest precisely selected Focus Media elevator advertising to ignite the urban mainstream population. Because elevators are a daily necessity for the new middle class, Genki Forest effectively seized the moment when young urban white-collar workers enter and exit apartment buildings and office towers, embedding the 0-calorie, 0-fat, 0-sugar brand proposition into the minds of target consumers, achieving brand breakout and rapidly increasing awareness.

-03- Spring and Autumn Hegemony, Initial Pattern Set Genki Forest's achievements are undoubtedly due to favorable timing, geographical advantage, and human harmony, allowing it to lead the pack and temporarily sit on the throne. At this point, the soda water arena's pattern is initially set, but as later entrants continue to invade and encroach, the industry landscape is not yet fully decided, and the future remains full of variables.

Suggestions for Brand Owners:

1. Continue Investing in Market Education In China, although soda water has general awareness, it still lingers on the alkaline water concept from years ago. Consumers are still confused about the current soda sparkling water. Abroad, sparkling water is more often used in dining settings. In China, the awareness of sparkling water is far from sufficient, so it's inevitable that some mixed-quality products appear in the market, which is detrimental to the category's development. Promoting the establishment of category industry standards requires a sense of responsibility and mission from major brands. But if this step is taken, it will have a long-term impact on product standardization and consumer education.

2. Continuous Product Innovation Consumers are always curious and eager for new products, which is why brands are constantly developing new ones. For the currently not fully expanded markets of soda water and sparkling water, how can your product surpass the inherent perception brought by Genki Forest and become the next star product? This requires brand owners to continue focusing on product R&D and innovation. A good product's launch is certainly validated by the market or through continuous iteration and upgrades. Consumer feedback is also very important. Just as when Genki Forest was selecting flavors, it used reverse R&D, based on feedback from ordinary consumers' taste tests, finally deciding on cucumber as the main flavor.

3. Product Positioning and Channel Innovation Genki Forest's marketing approach has its own logic, using the smallest leverage to move a large market in a small category. For major brands entering later, although they have far greater capital and brand strength than Genki Forest, not all products are one-size-fits-all, and a single approach cannot work everywhere. Depending on different product positioning, internally incubating independent innovative product departments that independently handle new product marketing and promotion could be a good organizational system innovation. In summary, from the development trajectory of soda water and sparkling water abroad, it's not hard to judge that this is a category with great potential and aligned with healthy consumption trends. Who will become the industry leader in the future depends on whether our brand owners can truly make great efforts to build their products.

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