Mineral water companies building more Changbai Mountain plants

Hope to capture bigger market share with new products bottled near famous site

Major domestic mineral and purified water producers are busy building more water plants in a small county at the foot of Changbai Mountain which is rich in pure water resources in order to grab a big slice of the Chinese bottle water market, a newspaper reported Monday.

Nongfu Spring is building a new project of mineral water plants with the total investment reaching 460 million yuan ($74.15million) in Jingyu, Northeast China's Jilin Province, a small county which is well-known for a wealth of spring water resources, an official from the local government authority was quoted by China Business News (CBN) as saying Monday.

Wahaha is also building its second-stage project of plants in the county with total investment of 200 million yuan, according to the report.

Evergrande Spring has also invested 1.15 billion yuan for a second-stage project of plants in the county, said the report.

Some other mineral and purified water producers such as Tingyi Holding Corp, widely known for its famous "Master Kong" brand, and Tianjin-based Tasly Holding Group have also built their plants in the county, the CBN reported.

Calls to Wahaha, Nongfu Spring, and Evergrande Spring did not receive replies by press time Monday.

Among all of these bottle water producers, Evergrande Spring is a relative newcomer. Its mother company Chinese real estate developer Evergrande Group unveiled its bottled water right after its soccer club won the 2013 Asian Football Confederation Champions League title last November.

The triumph put Evergrande Group, the main investor in the Guangzhou Evergrande Football Club, under the national spotlight as it is the only Asian championship that a Chinese club team has won in the past 23 years.

Despite queries about whether its cross-industry investment could succeed, Evergrande Spring has launched a comprehensive promotion in the past seven months. For instance, advertisements of Evergrande Spring could be seen in various forms of media, including Internet, television, and billboards at bus stations. It will reportedly invest around 10 billion yuan in the mineral water business.

"Such a large scale of investment by Evergrande is infrequently seen in the beverage market, and Evergrande Spring indeed has succeeded in a short period," Yan Qiang, a partner at Hejun Consulting, a Beijing based consultancy, told the Global Times Monday.

But Yan also noted that Evergrande Spring does not have any substantial advantage and would still be confronted with challenges.

"A sales network is the most important factor for success, but Evergrande Spring has no advantage in this area," Yan said.

In order to deal with the challenges from the newcomer, other mineral and purified water producers that have entered the market over the years, such as Tingyi and Wahaha, have competed to develop products with water sources from Changbai Mountain.

Tingyi began to sell its new mineral water products sourced from Changbai Mountain this year via e-commerce platforms, such as JD.com, which is a "following-suit move," Chen Gongru, spokesman of Master Kong was quoted by Guangzhou-based Yangcheng Evening News as saying Monday.

Tingyi has a price advantage for its mineral water sourced from Changbai Mountain.

The price of a 550 milliliters (ml) bottle, branded as "Master Kong," is only around 2.2 yuan while a 350 ml bottle of Evergrande Spring costs about 3.8 yuan.

In face of the serious competition, analysts said the purified water producers should focus more on "product differentiation."

"Each company should develop their own unique products with good reputations," Wang Danqing, a partner at Beijing-based ACG Management Consulting, told the Global Times Monday.