Recently, the competition in the purified water market has heated up again. Not long ago, during a live test drive of a Xiaomi SU7, “super internet celebrity” Lei Jun accidentally showed a bottle of Nongfu Spring in the car’s cup holder. Although the live broadcast only focused on this detail for a few seconds, the observant viewers still noticed it and it sparked lively discussions in the comment section.
Surrounding this incident, the media conducted a survey titled “Do you sympathize with Nongfu Spring?” The results showed that only 19.41% of the interviewed netizens expressed sympathy for Nongfu Spring, while the majority expressed “no sympathy” or “indifference”. In this event, the Nongfu Spring in Lei Jun’s car was the commonly seen “drinking natural water” on the market, but if it had been Nongfu Spring’s new purified water product (commonly known as the “little green bottle”) that has recently been the topic of public discussion, the public’s response might have been even stronger.
A key reason for this situation is that the founder of Nongfu Spring, Zhong Shanshan, had previously harshly criticized purified water, claiming that it lacks minerals and is not beneficial to human health, and announced that the company would no longer produce purified water. This declaration sparked a debate within the industry. Now, with Nongfu Spring’s brand strategy reversal to reintroduce purified water, it naturally attracted widespread attention from the industry and the public.
Despite the many external concerns, Nongfu Spring is still determined to enter the purified water market. According to The Paper, on April 25th, a staff member of Nongfu Spring revealed: “The product has already begun to be distributed offline, and will subsequently be available both online and offline.” Another staffer added that the purified water in the green bottle has a capacity of 550ml and a retail price of 2 yuan per bottle, “Pre-orders are now being accepted, and it is expected to be shipped within the next two days.”
At present, Nongfu Spring’s eagerness for purified water products and its urgency stand in stark contrast to founder Zhong Shanshan’s previous stance of steadfastness towards natural water. More ironically, pictures of the “little green bottle” circulating on the internet, with words like “from a natural water source”, “Nongfu Spring purified water”, and “a bit sweet”, seem to blur the concepts of “natural water” and “purified water,” intending to quell the focus of the post-rain debate.
Looking at the entire development process of the Nongfu Spring brand, we find that the company actually started producing purified water at its founding. Specifically, in 1997, using Qiandao Lake in Zhejiang as a water source, Nongfu Spring’s first bottle of packaged water officially hit the market, and until 1999, the company continued to produce purified water. However, in 2000, Nongfu Spring distinguished itself from other brands by pioneering the concept of “natural water,” clearly differentiating itself from competitors like Wahaha’s “purified water.” It was in this year that Nongfu Spring claimed in a commercial dispute that purified water is harmful to humans because it lacks minerals, and it stopped the production of purified water.
For brands of purified water, facing the shaking of their product foundation is undoubtedly a heavy blow. In the industry, the strong reaction of the purified water brand not only united their colleagues but also initiated a powerful counterattack towards the outside world. It is reported that in an important move, Nongfu Spring held a biological experiment in Chengdu comparing the advantages and disadvantages of natural water and purified water to demonstrate the superior performance of their products.
Meanwhile, in the face of this challenge, a multitude of purified water brands did not sit back and wait for defeat. Reports indicate that BlueRay Water organized an alliance of purified water manufacturers and openly conducted an adversarial experiment before the media. The intense confrontation between them has caused a climax within and outside the industry.
Subsequently, under the leadership of Wahaha, hundreds of purified water manufacturers, including Robust, gathered in Hangzhou to hold a seminar on the healthy development of purified water and issued a joint statement. In this statement, they demanded an apology from Nongfu Spring for its previous actions.
Looking over this series of tense business confrontations, it ultimately concluded with a handshake and reconciliation between the parties. Nongfu Spring and Wahaha clarified their respective positions and product claims, ultimately eliminating the disputes in the market. The rise of the natural water market seems to have become an unstoppable trend.
In retrospect of this business battle known as the “Water War of the Century”, it is shocking that only Nongfu Spring and Wahaha emerged from the disputes, and their founders, Zhong Suisui and Zong Qinghou, have repeatedly reached for the title of China’s richest person. Phrases like “better to sell water than oil” circulate online, reflecting the heat of the water industry.
At the same time, the performance of other brands varied. Brands like BlueRay Water, though still in existence, have greatly diminished market influence and can only seek new directions outside the pure water sector, attempting to promote new water products to follow market pulses.
In such an industry context, the insights of Nongfu Spring’s founder Zhong Suisui are especially important. He once stated in a media interview that were it not for his discovery and persistence, today’s natural water market could have belonged to someone else. Nongfu Spring not only successfully opened a new track for natural water but also, through continuous business battles and advertising bombardment, engraved the advantages of natural water deep into the hearts of the people.
Take the water quality of Qiandao Lake as an example, Nongfu Spring emphasized in its promotion the excellent attributes of the water quality, such as its rich natural mineral elements and its suitability for long-term consumption due to its mild alkalinity, greatly enhancing consumer awareness and preference for natural water.
In terms of product strategy, Nongfu Spring presents a rich and diverse water product line. According to the official website, Nongfu Spring’s water products cover various types, including regular drinking natural water, natural water specially for infants, and natural mineral water with special mineral content including lithium type, meeting diverse consumer needs while steadily promoting the brand’s growth.
With its abundant and segmented product line, as well as profound consumer recognition, Nongfu Spring naturally became the undisputed “King of Water”. Data analysis shows that in the past few years, from 2017 to 2022, Nongfu Spring held about 12.2% of the market share in the bottled water market, leading the way, while its competitors YiBao, Jingtian, Master Kong, and Wahaha followed with market shares of 8.3%, 5.3%, 3.2%, and 2.2%, respectively.
From a macro perspective, the packaged drinking water industry is showing a trend of rapid growth. According to industry analysis reports, packaged drinking water has become the largest category in the beverage segment, reaching a market size of 215 billion RMB last year. Moreover, between 2023 and 2028, the estimated compound annual growth rate will reach 7.9%, which is one of the fastest among all ready-to-drink product categories.
What draws attention is that, despite the vast market size for bottled drinking water, Nongfu Spring’s total revenue for 2023 saw the category’s share drop below 50% for the first time, to just 47.5%. This shift underscores that Nongfu Spring cannot let its guard down in this critical area and must continue to strive for a greater market share, even if that means venturing into the previously abandoned territory of purified water.
In the actions that Nongfu Spring took to seek growth and expansion, entering the purified water market was seen as a strategic decision. The company did not entirely distinguish its purified water brand from its traditional natural water products; instead, it chose a blended marketing strategy that promotes the message of “originating from natural sources” in its promotional materials.
Facing inquiries from the market and the media, Nongfu Spring representatives have also stated that the company’s natural water products will continue to be produced, and that purified water is sourced naturally as well, only differing in its filtration process. The core aim of this strategy is to leverage Nongfu Spring’s more than two decades of accumulated brand value and consumer trust in the natural water market to promote their purified water products, thereby attracting a broader consumer base.
Industry analysts point out that consumers in their daily lives may not be able to accurately differentiate between mineral water, natural water, and purified water. In the market, these categories of bottled water are often collectively referred to as mineral water. For Nongfu Spring, this means there is viability in expanding into purified water business, and the brand’s inherent advantages help to attract consumers with a higher cost-performance ratio and to penetrate and conquer the lower-market through purified water products.
In summary, Nongfu Spring’s strategic intent is clear—to broaden consumer awareness and capture a larger market share through purified water products while positioning product pricing strategy as one of the key elements for competition and market expansion.
To take the lead in the fiercely competitive purified water market is no easy feat, and Nongfu Spring’s retail price strategy of 2 yuan per bottle is one of its measures to face heavyweight market competitors like the “purified water king” Yibao. Market analysis shows that, with the evolution of the bottled water market, leading brands are emerging in different price ranges. Wahaha created a market precedent with its “1 yuan water,” while Kangshifu seized the “1.5 yuan water” market opportunity with its deep distribution network and price advantage. Currently, Yibao leads the “2 yuan water” market with its light-asset operation and efficient channel cooperation strategy, temporarily holding a leading market position.
Industry data shows that Yibao operates 12 owned factories and 34 OEM factories nationwide, comfortably ranking as the leader in China’s purified water market. Despite paying around 2 billion RMB to OEM factories every year, Yibao still maintains a gross profit margin of over 40%. Notably, Yibao’s parent company, China Resources Beverage, has recently submitted an IPO application to the Hong Kong Stock Exchange. Upon successful listing, it will follow Nongfu Spring as another mainland bottled drinking water giant in the Hong Kong stock market and shall obtain support from the capital market, which could further develop its OEM business model and claim a larger market share.
Wahaha is not just standing by and watching the changes; it is consolidating its position in the purified water market by further expanding its distribution channels and increasing the stocking efforts at retail points, dedicated to promoting its purified water products to more sales terminals. According to media reports, some of these sales terminals were previously mainly selling Nongfu Spring and its series of products. It can be seen that in the purified water market, the competition among major enterprises has flared up once again.
For Nongfu Spring, the current challenge is how to update its brand positioning and create new growth points. In this business competition, whether Nongfu Spring can achieve transformation and upgrading or encounter setbacks, time will be the ultimate judge.
