3 Key Takeaways:
- China’s water purification market is on the rise, with rapid growth driven by the popularity of convenient and cost-effective commercial water purification products.
- The market has shown significant potential, projected to expand from 5.99 billion yuan in 2018 to 10.46 billion yuan in 2022, with an annual growth rate of 15.0%.
- As businesses embrace water purifiers over bottled water, the market is expected to reach 11.95 billion yuan in 2023, offering substantial opportunities for growth and investment.
The Growing Potential of the Commercial Water Purification Market
Commercial water purification products have witnessed a surge in popularity across offices, hospitals, enterprises, schools, and government setups. They bring convenience and cost-effectiveness to the table, making them the preferred choice for clean drinking water.
Recent findings from Sullivan, a research organization, reveal a pivotal shift. Water purified by these systems is rapidly becoming the standard for commercial drinking water. From a business perspective, water purifier usage is on the rise, with a projection of growth from 7.6% in 2018 to 10.8% in 2022. China’s commercial water purifier market is on an impressive trajectory, set to expand from 5.99 billion yuan in 2018 to 10.46 billion yuan in 2022, boasting a remarkable annual growth rate of 15.0%.
Within this growth, the sales of new commercial water purifiers have rocketed from 5.69 billion yuan in 2018 to 9.83 billion yuan in 2022. Simultaneously, the after-sales service market has seen a parallel rise from 300 million yuan to 630 million yuan. The forecast predicts the commercial water purifier market will extend to 11.95 billion yuan in 2023.
All of this prompts the question: Just how much room does the commercial water purification market have for expansion, and is it a smart investment in the current competitive landscape?
1. Exploring the Potential
After a phase of incubation and swift development, the commercial water purification industry is now experiencing a steady expansion. The market holds considerable promise for a couple of reasons.
Firstly, the customer base keeps growing, encompassing a wide range of businesses, schools, hospitals, office spaces, factories, and eateries. Plus, there’s a constant stream of new projects being unveiled, all fueling the demand for commercial water purification equipment.
For instance, according to data from the State Administration for Market Regulation, by the close of 2022, there will be 29.076 million new market entities, marking a year-on-year increase of 0.71%. Furthermore, new projects pop up consistently in primary and secondary schools, office spaces, hospitals, factories, and more. The cumulative effect of these factors creates a substantial growth opportunity for water purification equipment.
Additionally, organizations that adopted water purification equipment earlier are now moving towards upgrading their systems. These institutions are aligning with changing consumer preferences by introducing newer, improved products with better performance, higher quality, and lower maintenance costs. This surge in demand creates an opportunity for competitive water purification companies to carve out a bigger slice of the market.
One significant driving force is the increasing penetration of commercial water purification in the existing market. Water purifiers are set to displace bottled drinking water, with the market share predicted to increase from 10.8% in 2022 to 20.1% in 2027, thus boosting sales of commercial water purification equipment for businesses.
As the demand for healthy, cost-effective, and convenient drinking water escalates, commercial water purification products are expected to extend to various settings, such as restaurants, supermarkets, communities, and factories. The potential for growth remains substantial.
The “2023 China Commercial Water Purifier Industry Research Report” by Sullivan predicts that by 2027, the Chinese commercial water purifier market could reach 21.40 billion yuan, with a compound annual growth rate of 15.7%. It is estimated that new machine sales will reach 19.79 billion yuan, and the after-sales service market will reach 1.61 billion yuan.
Additionally, analysis from the China Research Network suggests that although the size of China’s commercial water purifier market is currently smaller than that of developed countries in Europe and the United States, its recent growth rate has outpaced overseas markets. The market size reached 17.856 billion yuan in 2022 and is projected to reach 27.95 billion yuan in 2029.
2. Succeeding in the Market
Given the promising growth of the commercial water purification market, many brands are heavily investing in this sector. The upcoming Watertech China Beijing, scheduled for November 20-22, 2023, will showcase numerous commercial water purification products.
After several years of development and restructuring, the competitive landscape of the commercial water purification market is clearer, with top-tier and second-tier brands emerging. So, how can a company stand out and capture future opportunities in this competitive field?
Experts suggest that building stronger competitive advantages in key areas, including brands, products, and distribution channels, is essential. Brand awareness plays a pivotal role in a company’s competitiveness in the commercial water purification industry. Brands with a strong presence are more likely to win favor among business customers. To lead in this market, companies need to enhance their brand reputation and engage in proactive business development. Participating in key exhibitions like Watertech China Beijing and forging relationships with upstream and downstream merchants can significantly boost brand visibility and reputation.
In any market competition, the quality of products is fundamental. Product quality directly impacts reputation and long-term competitive advantage. Winning the product battle in the commercial water purification market requires in-depth research into customer preferences and needs through various channels. Providing customized water purification solutions, taking into account factors like product performance, maintenance costs, and ease of management, is crucial for success.
Several well-known brands have already announced their plans to launch key products at Watertech China Beijing. For example, Weikeli offers custom direct drinking water solutions suitable for various industries, including enterprises, schools, hospitals, and factories. Similarly, Bilai is introducing high-end business water dispensers and IoT water dispensers, while Woniu is unveiling various commercial products tailored to different scenarios.
Effective distribution channels are another key factor for success in the commercial water purification business. Whether through complete machine sales, leasing, BOT models, or other strategies, effective channels are essential to connect with customers from enterprises, institutions, and public places like schools, hospitals, airports, and office buildings.
The commercial water purification market holds significant potential for growth and offers exciting opportunities for businesses. Success in this dynamic field can be achieved through a strong brand presence, quality products, and an effective distribution strategy. As the industry continues to evolve, companies that adapt and innovate will seize the potential for future success.