Baishuishan in the Bromate Controversy: Floccules Found in Unopened Water, Parent Company Named and Criticized Many Times
The “noble of the water” Baishuishan has encountered “big trouble”.
Recently, the Hong Kong Consumer Council publicly pointed out that the bromate content in Baishuishan mineral water exceeded the standard. Baishuishan responded that the quality of its products meets the standards of China, the European Union and the World Health Organization, and that some Hong Kong media reports were seriously inaccurate.
But has the quality problem of Baishuishan really been solved? On the Black Cat complaint and social platforms, many consumers reported that they had tasted foreign objects in Baishuishan, including flocculent objects and floating objects. In addition, from the perspective of market logic, since its inception, Baishuishan has not made any further arrangements in its product line, except for promoting “the aristocracy of water” and sponsoring overseas events to maintain its high-end tone, which has formed a huge contrast with its industry competitors Nongfu Spring and Yilibao.
It is worth mentioning that Baishuishan’s parent company Jingtian has been criticized by regulatory authorities many times due to the detection of Pseudomonas aeruginosa in its water.
Consumer: “There are flocs in the unopened water”
The summer of 2024 is an eventful one for Baishuishan. On July 16, the Hong Kong Consumer Council pointed out that it had detected 3 micrograms of bromate per liter in samples of Baishuishan bottled water, which has reached the EU's maximum limit of bromate applicable to natural mineral water and spring water treated with ozone. Baishuishan quickly became a hot topic.
In response, Baishuishan issued a statement saying that the quality of Baishuishan brand products meets the standards of China, the European Union and the World Health Organization, and that some Hong Kong media reports are seriously inaccurate.
However, Sina Finance found on the Black Cat complaint platform that most complaints about Baishuishan are about quality issues. Some consumers bluntly said that there were unidentified red objects in Baishuishan.
On social media platforms, many consumers also said they found floccules and floating objects in unopened Baisuishan. In the comment section, many people said they had encountered similar situations many times, saying that “the taste is wrong” and “it feels like a tissue has fallen into it.”
In addition, since 2022, Baishuishan’s parent company Jingtian has also been named by regulatory authorities in Beijing, Hubei, Fujian and other places because Pseudomonas aeruginosa was detected in its drinking water and did not meet national food safety standards.
It is understood that the founder of Baishuishan and Jingtian is Zhou Jingliang. In 1984, Zhou Jingliang joined C'estbon, and eight years later he “went solo” to found Jingtian, and launched Baishuishan mineral water in 2004.
At that time, people in the industry believed that Zhou Jingliang knew Yibibao’s strategy inside and out, and the two companies’ customer base were similar, so Jingtian was one of Yibibao’s most dangerous competitors.
However, since December last year, Zhou Jingliang has resigned as the legal representative of several companies. Jingtian responded at the time that the change was a normal business need of the company and there was no special reason, but the outside world generally believed that Jingtian had lost its “backbone”.
Since Zhou Jingliang left, the business line of the parent company Jingtian is still relatively single, with its only products being Blairquhan glass bottled water, Baishuishan mineral water and Jingtian purified water, which cover the “high, medium and low” markets respectively.
With the development in recent years, Jingtian Pure Water has mainly focused on bottled water. Blairquhan has never been widely promoted in the market, and the fastest-running one is Baishuishan.
Because Jingtian has not yet been listed, the specific revenue figures of Baishuishan have not been disclosed. However, its competitor Yibibao disclosed in its prospectus that the total retail sales of Baishuishan in 2023 will be 13.2 billion yuan, with a market share of 6.1%, second only to Nongfu Spring and Yibibao.
An industry insider told Sina Finance that Baishuishan's third place in the industry is closely related to its marketing. A closer look at Baishuishan's advertisements shows that its promotions are always tied to European and castle elements, and finally highlight the slogan “Baishuishan, the aristocrat of water”. Compared with the advertisements of competing products that like to highlight the water source, Baishuishan's advertisements hardly talk about the actual content and only create a high-end tone. Over time, this slogan has been engraved in the impression of consumers like “Nongfu Spring is a little sweet”.
In addition, Baishuishan makes good use of “overseas” to highlight its “foreign style”, and even directly targets the high-end liquor brand Guojiao 1573. At the Australian Open held in 2020, Kelly, a sports marketing expert at the University of Queensland, said in an interview with local media that Baishuishan and Guojiao 1573 are both positioned as high-end brands, so they are everywhere on the court. The sponsorship of Baishuishan was negotiated based on the fit between tennis and high-end brands and high-end target audiences. In addition, Baishuishan has also sponsored sports events such as the FIVB, Juventus Club, Serbia National Volleyball and Men's Basketball in recent years.
The competition for 3 yuan water is the most intense, and the single product category becomes a weak point?
In recent years, the competition among water companies has become a red ocean. According to a report by CSI Consulting, the concentration of China's packaged drinking water market continues to increase. In terms of retail sales, the total market share of the top five companies will increase from 56.2% in 2021 to 58.6% in 2023.
More and more small manufacturers are being “swept away”. Among the leading companies, Nongfu Spring, the industry leader, has lowered the price of bottled water to less than 1 yuan for purified water and less than 2 yuan for drinking water, while Baishuishan is still “firmly” at 3 yuan.
On the one hand, more and more consumers believe that there is not much difference between drinking water, and they pay a higher price just to pay for the packaging; on the other hand, the 3 yuan drinking water track is becoming more and more crowded.
According to industry information, since 2021, Nongfu Spring, Yuanqi Forest, Yilibao, and Jinmailang have successively launched drinking water products in the 3 yuan price range. At the same time, higher-end mineral water brands such as Evergrande Ice Spring, Kunlun Mountain, and Evian are also moving closer to the 3 yuan price range.
“If you want to buy cheaper water, you can buy Nongfu Spring which costs a few cents a bottle. If you want to buy more expensive water, you can buy Evian. So why should I buy Baishuishan, which only has stories but no other real advantages?” said a consumer bluntly.
Previously, Lai Yang, member of the Expert Committee of the China General Chamber of Commerce and executive vice president of the Beijing Society of Business Economics, publicly stated that the competition in drinking water must also jump out of the red ocean. Some brands rely too much on advertising investment, while consumers are becoming more rational and value intrinsic quality and value.
In addition, except for Baishuishan, almost all water companies have made diversified layouts. At present, the “industry leader” has laid out multiple categories such as tea, functional drinks, juice, plant protein, coffee, etc. In the 2023 financial report, the proportion of Nongfu Spring's packaged drinking water business in the entire revenue structure has dropped below 50%. The “industry second” Yibibao also has 13 brands and 56 SKUs including tea drinks and juice drinks, but the “industry third” Baishuishan still only has the category of drinking water.
Wen Zhihong, partner of Hejun Consulting, told Sina Finance that when Baishuishan first entered the market, it did reap a lot of profits due to its unique slogan and relatively blank mid-range positioning at the time. Some local agents also made their first fortune by choosing Baishuishan as their “brand”. However, competition among water companies has become increasingly fierce in recent years. Judging from market performance, Baishuishan has already had a big gap with previous years. In addition, whether it is old brands such as Wahaha and Nongfu Spring, or new brands such as Yuanqi Forest, they all have to diversify their brands or categories. In comparison, Baishuishan is indeed moving slowly.
Recently, there was news that Baishuishan has newly registered a beverage company, focusing on the wine, beverage and refined tea manufacturing industries, with a registered capital of 30 million yuan. Industry insiders believe that this move means that Baishuishan “finally can't sit still” and will start to expand into new product categories.
However, as of now, no new Baishuishan products have been launched on the market. Industry insiders believe that if Baishuishan still cannot tell a new story or even expand new product categories in the future, and continues to “brainwash” consumers with the words “noble among waters”, its only marketing advantage may disappear.