Gallic water producers make a splash in Chinese market
Growing high-end drinks demand creates an opportunity for expanding European businesses
Premium water producers from France are eyeing great potential in the Chinese market, as more companies from the European country expand their business in the East.
As China’s upgrading consumption patterns see steady progress, more and more younger consumers are willing to pay a higher price for higher quality products, either to pursue a healthier lifestyle or for the sake of quality itself. This is opening up a big market for consumer goods, such as water brands Perrier and Evian from France.
“In China, as people’s income grows, consumers’ awareness of health and quality of life is also rising day by day,” said Luo Nan, business manager of international brands at Nestle Water China, who is in charge of Perrier, which was acquired by the company.
“Top-tier Chinese cities are highly internationalized and drinking natural sparkling water is not a strange habit anymore,” she said. “In Starbucks or bars, it is common to see people chat with a bottle of Perrier.”
According to a report by AskCI Consulting, a Chinese market research firm, since the drinking water market started to ramp up in 2010, the sale of low-end mineral water has slid by 6 percentage points, while the top-end market for natural spring water is expanding at a promising speed.
“Both foreign and domestic companies are seeing the premium water market as the new engine for the sector,” said Zhu Danpeng, an established food industry analyst and columnist. “The market is at a stage where competition is becoming fiercer and fiercer, with domestic companies taking a defensive position and foreign counterparts entering aggressively.”
Luo said that although the premium water market is currently in its early stages, with abundant offline retail resources and a fast-growing e-commerce business, Perrier has an optimistic outlook.
“Perrier can easily be found in chain coffee shops, premium restaurants, hotel groups and bars,” she said. “It has also entered China’s growing e-commerce market, and it can be bought on JD and Tmall.”
Since last July, Nestle has invested over 200 million euros ($240.62 million) in its factory in France to raise productivity by 40 percent, aiming to meet growing demand both in France and abroad.
“We are targeting the young, highly-educated, relatively wealthy middle-income earners,” Luo said.
“So in our marketing strategy, we relate the drink with aspects of city lifestyles, such as music, art, fashion and design,” she added.
“As a product of a healthy lifestyle, with a high mineral content and zero calories, Perrier has a number of flavors, including original, lemon and lime. Perrier has provided Chinese consumers with diversified and quality choices.”
Another major player in the premium drinking water market is Danone Group from France. The company is also expanding its business in China. In the past few years, the major choice for premium water has always been Evian, Danone’s killer product. While the general price of bottled water hovers around 1 yuan to 2 yuan ($0.15-0.31), a small bottle of Evian can cost up to 14 yuan. Early last year, Danone promoted another water product, Aoraki, which costs 8 yuan a bottle, in an attempt to take a greater share of China’s growing premium water market.
“We have seen growing demand for imported water and premium drinking water, and Chinese consumers tend to buy healthier beverages,” said David Roos, Danone Waters’ health and sustainability director.
“We hope that by introducing Aoraki, we can better support their needs.” Contact the writers through renxiaojin@chinadaily.com.cn