Core Viewpoint - The bottled water market is experiencing a price war, with brands like Nongfu Spring, Wahaha, and Master Kong competing aggressively to bring prices back to around 1 yuan, while local favorites like "Jilin Divine Water" (Quanyuan Spring) are gaining popularity for their quality and low price [1][5][15]. Group 1: Market Dynamics - The bottled water industry is seeing a shift towards lower prices, with many brands offering products for less than 1 yuan [1]. - Jilin's Quanyuan Spring is marketed as a high-quality mineral water, priced at 1.5 yuan, which has led to a local pride and competition among consumers [5][18]. - The competition is not just about price but also about the perceived quality of water sources, with Quanyuan Spring claiming to have superior water quality standards [15][18]. Group 2: Consumer Perception - Consumers in Jilin have a strong attachment to Quanyuan Spring, often claiming it is the best water available, which reflects a cultural significance attached to local products [9][15]. - The water's taste is described as sweet and refreshing, contributing to its popularity among locals who have grown up drinking it [9][15]. - The perception of quality is further enhanced by the water's source from the Changbai Mountain region, which is considered one of the world's top water sources [16][18]. Group 3: Industry Challenges - The logistics of transporting bottled water are challenging, with a "500-kilometer rule" indicating that water is typically not profitable to transport beyond this distance due to high costs [22][23]. - Quanyuan Spring's market is primarily concentrated in the Northeast region of China, with a 35% market share in Jilin, limiting its distribution [26]. - The industry faces issues with counterfeit products, particularly outside of Jilin, complicating the consumer's ability to access genuine Quanyuan Spring [5][22]. Group 4: Regulatory and Quality Standards - Quanyuan Spring adheres to higher quality standards than many competitors, using the GB/T20349 standard for natural mineral water, which is more stringent than the general GB 8537-2008 standard [15][18]. - The water source's geographical indication (GI) status adds to its prestige and marketability, making it a sought-after product [15][18]. - The importance of water source quality is emphasized, as it directly impacts pricing and consumer perception, with premium brands often linked to prestigious water sources [28][30].

Core Viewpoint - The bottled water market in China is experiencing intense competition, with major players like Nongfu Spring, Wahaha, and China Resources Beverage adjusting their strategies to capture market share after Nongfu Spring's re-entry into the pure water segment [4][5][9]. Group 1: Company Performance - Nongfu Spring reported a revenue of approximately 428.96 billion yuan for 2024, a year-on-year increase of 0.5%, and a net profit of about 121.23 billion yuan, up 0.4% [5]. - China Resources Beverage achieved a revenue of approximately 135.21 billion yuan, a slight increase of 0.05%, with a net profit of 16.37 billion yuan, reflecting a growth of 23.12% [5]. - Wahaha's overall performance returned to 700 billion yuan, marking an increase of nearly 200 billion yuan from the previous year, driven primarily by its bottled water and AD calcium milk businesses [4][5]. Group 2: Market Trends - The retail market for bottled drinking water in China grew by 2.5% year-on-year in 2024, with pure water accounting for 56.1% of the market [6]. - The natural mineral water market is expected to surpass 21.3 billion yuan in 2024, with a year-on-year growth rate of 17%, significantly outpacing the overall industry growth [6]. Group 3: Competitive Strategies - Nongfu Spring's re-entry into the pure water market has led to a price war, prompting competitors like Wahaha and China Resources Beverage to adjust their strategies [8][9]. - Nongfu Spring has launched a low-priced pure water product, with retail prices as low as 1 yuan per bottle, aiming to penetrate lower-tier markets [7][8]. - The competition has intensified, leading to increased product diversity and innovation, while also pushing smaller companies out of the market, thereby increasing industry concentration [8][11]. Group 4: Brand Positioning and Marketing - Nongfu Spring emphasizes its "high-quality natural water source" in its marketing, despite the lack of specific requirements for pure water [7]. - The company has upgraded its packaging to highlight its twelve major water sources, reinforcing its brand image of "natural and healthy" [9][10]. - China Resources Beverage is expanding its product range and has launched new brands to enhance its market presence following its listing on the Hong Kong Stock Exchange [10].