With the improvement of living standard, the output and sales of drinking water have increased sharply in China and the market will maintain a growth at 15% in the next 5-10 years.

The drinking water can be divided into two categories: bottled water and barreled water. Bottled water shared 40% of total soft drink output in China, and it is the key study object of this report. Bottled water normally sold cross-regionally; relies to the advertising and quality; while barreled water normally sold locally, relies to the service but also the quality.

Since the year of 2000, the output of bottled water has maintained NO.1 in China’s soft drink market. Its output up 13.67% and 16.46% in 2006 and 2007 respectively. Moreover, during Jan to Jul 2008, the bottled water output achieved a growth at 30%, which was mainly contributed by the share output growth from the provinces of Guangdong, Jilin and Henan.

At present, Wahaha, MasterKong, Nongfu Spring, and C’estbon are the top four bottled water manufacturers in China. Especially, the MasterKong and Nongfu Spring achieved a sharp output growth over 50% in both of 2006 and 2007. Moreover, Wahaha and C’estbon are focus on purified water, while Nongfu Spring focuses on natural water and MasterKong focuses on mineral water. The other emerging manufacturers such as Runtian and Maling have also achieved a fast growth in recent years.

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The total water consumption of Beijing reached 3.48 billion cubic meters in 2007. Because of Olympic Games, the consumption increased by 1.2 billion cubic meters to 3.6 billion cubic meters in 2008. Of all, life-use water and agriculture-use water occupied large proportions, 42% and 35% respectively.

The total drinking water consumption of Beijing equaled 7.95 million tons in 2008. As for packaging modes, barreled water was more popular, and more than 50% of families bought water dispensers. Barreled water has become the major source of drinking water and reached 3,395,000 tons. Bottled water and tap water amounted to 2.075 million tons and 2.48 million tons.

According to the nature of water, drinking water can be divided into mineral water and pure water. In Beijing, mineral water occupies a larger share in bottled water market, while pure water accounts for a greater share in barreled water market. In sales price, barreled mineral water is more expensive than barreled pure water by RMB 2 on average, which is one of reasons for why consumers would like to choose barreled pure water. On the other hand, barreled pure water is more suitable for brewing a variety of beverage, such as tea and coffee, so pure water is more popular.

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