New standards for bottled water may affect Tingyi, Coca-Cola
April 1, 2014 Leave a comment
New standards for bottled water may affect Tingyi, Coca-Cola
Staff Reporter
2014-03-22
China’s National Health and Family Planning Commission is soliciting opinion regarding new standards for bottled drinking water, which may not be good news for companies that market their products under the guise of “mineral water,” Shanghai’s National Business Daily reports.The market for bottled water in China is worth about 120 billion yuan (US$19.3 billion) a year, growing around 15% annually. As of the end of March 2013, the top five players in the market were Tingyi, Nongfu Spring, Wahaha, C’estbon and Coca-Cola, with respective market share of 23%, 22%, 18%, 9% and 7%.
The market is also broken down into pure water, mineral water, natural water and spring water, with shares of 44%, 28%, 13% and 9%, respectively, with the remaining 6% occupied by “other.” Tingyi and Coca-Cola lead in sales of mineral water.
As early as in 2009, media outlets such as Guangzhou’s Southern Weekend had called into question some brands selling mineral water, including Tingyi, citing experts who asserted that what was being sold as mineral water simply contained some artificial food additives and that misleading marketing led consumers to believe they were purchasing natural spring water.
The media reports had a significant impact on Tingyi, with its market share falling from 19.1% in the first half of 2008 to 16.5% by the end of 2009. However, Tingyi managed to stage a comeback by introducing a new type of bottle in 2013, and it has returned to a leading market share to 24%.
Tingyi’s main strategy is to offer low prices to be competitive, gaining a gross margin of just RMB0.10 (US$0.016) from a bottle of water priced at 1 yuan (US$0.16).
Tingyi’s popular bottled tea drinks meanwhile have a 53.6% share as of September 2013, according to the statistics from global marketing research firm AC Nielsen.
About bambooinnovator
