1. China Bottled Mineral Water Market
MARKETING REPORT
January, 2014
market in China
Bologna, 2013

2. Overview of Bottled Mineral Water Market in China
The bottled water market in China consists of various types of bottled water, including mineral water, sparkling water and purified water. Economic growth, urbanization, increase in disposable income and changes in lifestyle and consumption behavior have led to substantial growth in the bottled water market in China.1
Over the five years through 2012, revenue for the Water Supply industry in China has been increasing at an annualized rate of 8.0% to total $16.0 billion in 2012.
In recent years, the Chinese government has been promoting the commercialization of the Water Supply industry, which has contributed to revenue growth. Most companies in the industry now have private and foreign capital.2
1. Source: China Bottled Water - Market Report, New Zealand Trade and Enterprise, 2012.
2. Source: Water Supply Market Research Report, IBISWorld, 2013

3. Trends
With Improving health consciousness and growing urbanisation and their enhanced health awareness, more consumers, especially those living in urban areas, prefer to purchase bottled water instead of drinking tap water.
Wealth accumulation of consumers in the low-tier areas has resulted in a marked increase in their general consumerism.
The water contamination problem in China and concern about how to improve the standard of daily drinking water have also been the focus of attention for consumers in the low-tier areas. This has resulted in them switching from tap water to bottled water.
Manufacturers contributed to increased penetration of the benefits of bottled water to consumers through a series of marketing campaigns.2
2. Source: Water Supply Market Research Report, IBISWorld, 2013
With Improving health consciousness and growing urbanisation and their enhanced health awareness, more consumers, especially those living in urban areas, prefer to purchase bottled water instead of drinking tap water. In particular, young consumers are willing to buy flavoured bottled water with functions.

4. Characteristics of Premium and Mass-Market Bottled Mineral Water
Retail price of premium bottled mineral water (500ml) is not less than 8CNY (1,3USD; 0,96EUR). Retail price of Mass-market bottled mineral water (500ml) is less than 5CNY (0,81USD; 0,6EUR).
Distribution channels are diverse for bottled mineral water, the retailing price is not the only criteria applied to identify a brand’s positioning in either the premium or mass-market segment, consumer perception is also a key consideration.
Premium bottled mineral water in China is primarily consumed by middle to high income consumers and institutional purchasers such as major corporations and government organizations with a large middle to high income customer base and significant bulk purchase demand.3
Premium bottled mineral water is characterized by a premium brand image and generally has a retail price of not less than CNY5 per 500 ml bottle. Mass-market bottled mineral water is characterized by a mass-market image and generally has a retail price of generally less than CNY5 per 500 ml bottle.
3. Source: Bottled Water in China,Euromonitor International, 2011

5. Sales Volume of Premium Market and Mass-Market Bottled Mineral Water E (in thousands of tonnes)
CAGR - Compound Annual Growth Rate – Il Tasso di Crescita Annuale Composto è il tasso di crescita annuale medio di investimento su un periodo di tempo specificato
2012E, 2013E, 2014E – Forecast (previsione)

6. Retail Sales Value of Premium and Mass-Market Bottled Mineral Water 2007-2014E (CNY in Millions)4
CAGR - Compound Annual Growth Rate – Il Tasso di Crescita Annuale Composto è il tasso di crescita annuale medio di investimento su un periodo di tempo specificato
2012E, 2013E, 2014E – Forecast (previsione)

7. Main Leaders of Mass-Market Bottled Mineral Water
Wahaha, Master Kong, and Nongfu Spring
Hangzhou Wahaha Group was the clear leader of bottled water by capturing 13% volume share in
Mainly benefited from advantages in distribution networks especially in low-tier cities and rural areas
Is affordable to consumers with low disposable income
High quality of the products
The three brands Master Kong, Wahaha, and Nongfu Spring account for the overwhelming shares of the bottled drinking water market, according to the investigations; while Coca Cola, C-estbon and Runtian belong to the second group.
Hangzhou Wahaha Group was the clear leader of bottled water by capturing 13% volume share in This company mainly benefited from advantages in distribution networks, especially in low-tier cities and rural areas. The company positions Wahaha as an economy brand to make its bottled water affordable to consumers with low disposable income. However, the low-end brand position of Wahaha could make it difficult to cater for the premiumisation trend of soft drinks, although the company tried to improve the position of the brand towards the mid- and high-end market. This could impact the future growth of Wahaha bottled water and its leadership position.
5. Source: Bottled Water in China,Euromonitor International, Apr 2013

8. Brand Shares of Bottled Water by Off-trade Value 2006-2010
1. Source:China Bottled Water - Market Report, New Zealand Trade and Enterprise, 2012

9. Brand Shares of Mass-Market Bottled Water by Off-trade Value 20103
4. Source: Tibet 5100 Water Resources Holdings Ltd., Global offer, 2011

10. Main Leaders of Premium-Market bottled Mineral Water
Tibet 5100, Evian, Perrier, Vittel, San Pelegrino.
Tibet 5100 (Market share by sales is 28,5%)
Positioned as a premium brand by emphasizing the uniqueness and purity of a glacial spring mineral water, which is sourced from a unique glacial spring at 5,100 meters above sea level.
Highest quality standards
Is consumed primarily by middle to high income consumers and institutional purchasers such as corporations and government organizations in China3
3. Source: Tibet 5100 Water Resources Holdings Ltd., Global offer, 2011

11. Top Six Manufactures of Premium Mineral Water Ranked by Sales Volume (%), 20103
3. Source: Tibet 5100 Water Resources Holdings Ltd., Global offer, 2011

12. Top Ten Brands of Premium Mineral Water Ranked by Sales volume, 2010
3. Source: Tibet 5100 Water Resources Holdings Ltd., Global offer, 2011

13. Top Six Manufactures of Premium Mineral Water Ranked by Sales Volume, 20103

14. Key Growth Drivers of China’s Premium Bottled Mineral Water Market
Increase in urban population and urban disposable income in China.
Growing health consciousness.
Change in consumer behavior.
Growth in the number and scale of large corporations.
Procurement behavior of large institutional purchasers
Drive to improve customer service

15. Pricing of Premium and Mass-Market Bottled Water
Premium market bottled water
Overage price (500 ml)
1-2CNY7
0,16-0,33USD
(0,12-0,24EUR)
Overage price
(500 ml)
10-30CNY ,65-4,95USD
(1,2-3,6EUR)
Wahaha
(596 ml)
Evian
8,80-9 CNY6,8
1,40-1,48USD
(1,05-1,08)
Nongfu
1CNY8
0,16USD
(0,12EUR)
Tibet 5100
(330 ml)
8,5-10,5CNY7,9
1,40-1,73USD
(1,02-1,2EUR)
Sources:
6. Want China Times,11/2013
7. Olans, 2013
8. China Daily, 2012
9. Global Times (China), 2012

16. Distribution area of Acqua Norda products
Chengdu
Fuzhou
Nanchang10
Kunming
Population (2012)
Urban
Rural
7,677,100
14,047,625
4,468,076
2,707,294
5,042,565 (Prefecture
level city)
3,583,429
6,432,212
GDP(2012) Per capita (Billions)
(Total GDP - CNY bln USD bln)
43,417CNY
6,442 USD
(5,225EUR)
52,144 CNY
8,268 USD
53,250CNY
8,719USD
(6,408EUR)
28,894CNY
4,731USD
(3,477EUR)
Area Urban
Prefecture-level
2,129 km2
12,132 km2
12,177 km2
12,177 km2
617 km2
7,372 km2
2,622 km2
21,473 km2
GDP-Gross Domestic Product - Prodotto Interno Lordo
10. Source: Nanchang Economic Information Center, 11.Wikipedia – free encyclopedia, 2014
12. Source: Forbes, 11/2013

17. Key Factors of Acqua Norda Promotion in China Premium Market
Target audience: middle to high income consumers and institutional purchasers
Distribution area: industrial cities
Distribution channels: institutional sales, food service and retail
Beautiful design of the bottle
According to the analysis of the Bottled Mineral Water Market, we can conclude that Acqua Nord could promote its brand in the premium segment of the market, due to the high quality of the produced water and the good image of Italy as a country with high quality food and beverages.
CAGR of the Premium Bottled Mineral water is higher (20,5%) than CAGR of the Mass-Market Bottled (11,8%)
Target audience - middle to high income consumers and institutional purchasers such as major corporations and government organizations with a large middle to high income customer base and significant bulk purchase demand.

18. Key Factors of Acqua Norda Promotion in China Mass-Market
Target audience: low income consumers
Distribution area: rural zones
Distribution channels: food service and retail
Competitive price of the
product

19. Acqua Norda SWOT Analysis
Strengths
Weaknesses
High quality of the product
We have a net of the distributors
Good image of Italy as a country with high quality standards of food and beverages
The brand Acqua Norda is not known in China
Opportunities
Threats
CAGR of Mass-Market and Premium Bottled Mineral water is very high
Increase in urban population and urban disposable income in China
Change in consumer behavior
High level of competition
We may be unable to manage future rapid growth.
The bottled water industry could face slower growth.

20. Conclusion
Population growth and accelerating urbanisation are expected to be key driving factors for the growth of bottled water over the forecast period.
Chinese-style healthy drinks booming
Increasing importance of branding in the fierce competitive environment
Packaging change affects consumer choice
Food safety problem continues to challenge the confidence of local consumers

21. References
China Bottled Water - Market Report, New Zealand Trade and Enterprise, 2012,
Water Supply Market Research Report, IBISWorld, 2013,
Bottled Water in China, Euromonitor International, 2011,
Tibet 5100 Water Resources Holdings Ltd., Global offer, 2011,
Bottled Water in China,Euromonitor International, Apr 2013 ,
Want China Times ,11/2013,
Olans, 2013,
China Daily, 2012,
Global Times (China), 2012,
Wikipedia – free encyclopedia, 2014,
Nanchang Economic Information Center,
Forbes, 11/2013,

22. Thank you for your attention!