HONG KONG: China’s bottled water market is dominated by local brands, but a growing number of health-conscious and aspirational consumers have developed a taste for imported mineral water, which is a boon for international brands.
Swiss FMCG giant Nestlé, for example, owns Perrier and San Pellegrino and is reported to have seen higher than expected, double-digit, growth for these premium brands.
According to South China Morning Post, China has now overtaken Japan as the largest market in Asia for Perrier, and Nestlé’s country manager for China believes that the trend towards premium products will help the company to grow further.
“We still think that the room for growth is considerable given the size of the market and our business today,” said Phillip Chilton. “As long as we are doing a good job in building brands and merchandise [channels], we will continue to do well.”
However, tapping into China’s growing demand for healthy food and beverages is not enough on its own, and part of Nestlé’s commercial success can be explained by its active courting of online shoppers.
“E-commerce has been a boon for us, giving customers ready access to our brands and convenient means to purchase,” Chilton explained.
Indeed, according to research firm Kantar Worldpanel, sales of packaged water grew 14% by value in the first half of 2017 – way ahead of the 2% overall increase of all types of fast-moving consumer goods.
“Water is a vibrant category as Chinese shoppers pursue a ‘go healthy path’,” said Jason Yu, General Manager at Kantar Worldpanel in Greater China.
“Overall, local brands take dominance in the mass market, with the top five local brands accounting for 70% of market share,” he added. “But in the upscale segment, imported brands have an upper hand.”
Sourced from South China Morning Post; additional content by WARC staff