Last year Chinese consumed 21 billion litres of mineral water and annual sales of premium-bottled water are expected to top 10 billion yuan (NZ$2 billion) in five years, according to ChinaDaily.com.
Several domestic water bottlers are now joggling for position to compete with the dominant market players like Evian and Perrier, which control 50% the premium market, the report says.
Earlier last month, Hong Kong-based JDB Group, announced plans to market its premium brand, Kunlun Mountains Natural Mineral Water, in some 30 provinces and cities across the country.
JDB Group invested 340 million yuan (NZ$68million) last year to build a bottling plant located near Kunlun Mountain in Qinghai province.
The factory is expected to produce up to 245 million litres of premium water per year.
Other companies also tapping the premium market include Tibet Glacier Mineral Water Co Ltd with its “5100 Tibet Spring Water” brand and Guangzhou Xinchen Water Co with its “9000 Years Dagu Glacier Spring Water” brand.
The goal of these bottlers is clear: to challenge foreign domination of the premium bottled-water market.
“The capacity of China’s premium drinking water market will surpass 10 billion yuan in the next five years with an expansion rate of 80% each year,” the report adds, quoting Mingchao, deputy general manager of Sinomonitor International, a Beijing-based market research company.
Analysts are skeptical whether domestic brands can steal away significant market share from the dominant players anytime soon as foreign brands have been in China for many years, hence they enjoy brand loyalty.
Yet Chinese bottlers believe they can take away market share by offering quality products at reduced prices.
Several bottlers have also sought to find other marketing channels to promote their premium brands.
For example, Kunlun Mountains Natural Mineral Water has been chosen as the official drinking water of Guangzhou 2010 Asian Games.
Tibet Glacier Mineral Water has entered into an agreement with the Ministry of Railways to provide 5100 Tibet Spring Water free of charge on its bullet trains around China.
Retailers and consumers are mixed on whether the public will switch to Chinese premium brands.