The second half of NONGFU SPRING CO., LTD. has arrived.

In 2019, the market size of the packaged drinking water industry reached 200 billion, with a compound growth rate of 11% in the past five years, of which NONGFU SPRING CO., LTD. 's packaged water income reached 14.3 billion yuan, leading his peers in growth and profitability.

According to Frost Sullivan research, NONGFU SPRING CO., LTD. has been the largest market share in China's packaging water market for eight consecutive years, reaching 20.9% in 2019, ranking among the top three in the fruit juice, tea and energy beverage industries. In addition, since the arrival of NONGFU SPRING CO., LTD. IPO, its price-to-earnings ratio (TTM) has never been lower than 60 times, even rising as high as 138.70 times in early January this year.

Looking back at the development of NONGFU SPRING CO., LTD. for more than 20 years, it was not plain sailing. In the first 10 years, its marketing method faced charges from many peers, until after 2012, under the background of the decline of established giants, NONGFU SPRING CO., LTD. gradually broke through by virtue of "soft power".

However, after the listing of NONGFU SPRING CO., LTD. 's life is not easy. The share price fell more than 40% from a high of HK $68.75 / share to HK $40.59 / share. NONGFU SPRING CO., LTD., who once made Zhong Nengyi the richest man in Asia, also seems to be in a bottleneck. So far, NONGFU SPRING CO., LTD. has gone through 24 years, can it continue to maintain vitality in the future? Based on this, New eyes will carry out the analysis from the following three aspects.

What did NONGFU SPRING CO., LTD. do right from being a minority to stepping into the public's view?

Will NONGFU SPRING CO., LTD., whose marketing is king, have a lower voice in the future?

What hidden worries does NONGFU SPRING CO., LTD. face in the second half of drinking water?

01 intrusive and anti-phagocytic

According to the category, packaged drinking water mainly includes pure water, natural mineral water, mineral water and other drinking water, the first three of which account for the largest proportion of production enterprises. For consumers, drinking water is colorless and tasteless, and only needs to meet the first physiological needs of human beings. therefore, in brand choice, we will not pursue too much differentiation, as long as"as long as it works".

For enterprises, if they want to stand out in the Red Sea competition, they are faced with a big problem:Even if the quality of water is harshly raised, and no matter how many tricks are used to publicize it, there is no outstanding attraction in the hearts of consumers.

This is also the first marketing problem NONGFU SPRING CO., LTD. encountered.

The time goes back 20 years, in early 2000.In order to highlight the differences of NONGFU SPRING CO., LTD.Zhong Jie separated pure water from natural water and publicly declared that "pure water is not good for health". Indeed, "health" is the focus of every consumer, and Zhong Kui's remarks have directly caught the attention of the public.

With experimental data as evidence, coupled with NONGFU SPRING CO., LTD. 's public relations and advertising campaign, it is difficult to remove the stigma of pure water. This move directly defeated the mainstream product "Wa Pure Water" from 1997 to 2000 in the subsequent competition.According to Nielsen retail research data of that year, after the incident, the national consumption ratio of pure water and natural water changed from 8:2 to 7:3, and NONGFU SPRING CO., LTD. became the number one brand of packaging water.

Of course, this is just the beginning.

NONGFU SPRING CO., LTD., who firmly ranked first in the market of similar products in 2002-2006, ushered in a strong rival, Master Kang, in 2008. Because of its good reputation, that is, the cost-effective advantage, it has formed a situation that the latecomers are superior.

This time, the acidity and basicity of water has become another planned topic of discussion. Master Kang's water was pointed out by NONGFU SPRING CO., LTD. as "pseudo-health" and the "water gate" crisis catalyzed by the pressure of public opinion. As a result, Master Kang's market share fell to 19.9% from 25% in July 2008, while NONGFU SPRING CO., LTD. increased by 0.7%.This time, in order to maintain his position, NONGFU SPRING CO., LTD. won a "victory" again.

After two battles, NONGFU SPRING CO., LTD. secured his position as the boss in the world.By the end of 2012, the sales of NONGFU SPRING CO., LTD. series products exceeded 10 billion for the first time. But the good times didn't last long, and then it ushered in a counter-attack. It was a fierce battle between NONGFU SPRING CO., LTD. and China Resources Yibao in 2013, when they blamed each other, ending with NONGFU SPRING CO., LTD. 's "dignified withdrawal" from the Beijing market on May 6.

Judging from the development history of Nongfu Mountain in the first ten years, we can find that "event marketing" is its main means, which violates the marketing law of "fairness" and fails to make NONGFU SPRING CO., LTD. make a qualitative breakthrough in his products.At that time, data show that NONGFU SPRING CO., LTD. 's market share has always hovered around 12%, can not go higher.

In fact, according to the market environment at that time, NONGFU SPRING CO., LTD. was not as good as Wa and Master Kang in terms of channels and terminals.A large part of the reason why NONGFU SPRING CO., LTD. can enter the public eye is that he is good at creating topics among the public.

From a scientific point of view, although the processes of pure water and natural water are different, they both meet the national standards for food safety, but there are slight differences in ingredient content, which will not affect people's health. NONGFU SPRING CO., LTD. can hardly agree with Wa and Master Kang's complaint.

Interestingly, at the Shenzhen Summit, Zhong signed the "China Convention on self-discipline of packaged drinking Water" with Wa, Master Kang, Yibao and other enterprises, the second of which is to "create a fair, reasonable, honest and orderly market environment." "

02 is a tiger, you have to learn.

Affected by previous events, NONGFU SPRING CO., LTD. 's marketing road began to step into the "right track" in 2012.

The first is the continuous innovation of channels.In the 4p theory, McKinsey puts forward the factors that marketing should have: product, price, channel and promotion. Under the background of high homogenization of products and prices, channel construction and management have become the key point of enterprises. Therefore, to a certain extent, the channel is the core of the enterprise to win the market.

At first, "channel chaos" was unanimously regarded as NONGFU SPRING CO., LTD. 's deficiency.When it was founded, it was unable to build more channels than its established rivals Wa and PepsiCo Inc in a short period of time; at the same time, NONGFU SPRING CO., LTD. implemented a bundling agreement among dealers, aggravating the conflict with dealers.

In 2016, NONGFU SPRING CO., LTD. officially launched the reform of the dealer system, eliminating a large number of small-scale or inefficient dealers and replanning the responsible areas of each dealer, a move that brought considerable benefits to NONGFU SPRING CO., LTD..

Then, NONGFU SPRING CO., LTD. gradually shifted the focus of the channel: free from the shackles of the old channel, taking the retail vending machine and the new Internet channel as the starting point, slowly reversing the current situation of being crushed on the channel. When the era of mobile Internet is coming, NONGFU SPRING CO., LTD. will seize the opportunity even more. Choose to cooperate with mainstream online platforms to launch advertisements and campaign titles, and put the right treasures of phenomenal variety shows, such as "Hip Hop in China" and "Youth with you".

Of course, NONGFU SPRING CO., LTD. 's change is not limited to the channel, the marketing method is also changing. NONGFU SPRING CO., LTD. 's marketing is no longer as radical and bold as it was 10 years ago. It has changed a way to tell its core with emotion, gradually precipitating and internalizing its own brand value.

This is reflected in the change in the way NONGFU SPRING CO., LTD. tells stories to the outside world.

NONGFU SPRING CO., LTD. 's advertisement, "Spring, Summer, Autumn and Winter in Changbai Mountain", records the beauty and animal lens of Changbai Mountain, showing consumers "what kind of water source, what kind of life". In 2017, it conducted cross-border cooperation with NetEase, Inc Yun Music to print NetEase, Inc Yun's music comments on NONGFU SPRING CO., LTD. 's bottle, which more or less gave NONGFU SPRING CO., LTD. different emotions.

By giving emotion to the product and arousing the resonance of consumers, such emotional marketing improves the reputation of consumers to the brand.

The marketing style of brand rejuvenation is another key that NONGFU SPRING CO., LTD. is far better than his peers.

Brand rejuvenation is also a long-term job. NONGFU SPRING CO., LTD. is used to inviting "little fresh meat" to endorse products and bundling them with fans. from 2016 to 2019, its spokesmen are well-known fresh meat, such as Big Bang for tea pi, Wu Yifan and Nine Pecent for vitamin water.

Wa, on the other hand, at first invited Wang Leehom to endorse, and after realizing that the advertisement wanted to push through the old and bring forth the new, he replaced the spokesman with Xu Guanghan. It may be to meet the tide of rejuvenation, but it is not aware that shaping the label of "rejuvenation" requires the long-term output of the brand to continuously strengthen consumers' awareness of the label.

According to public data, NONGFU SPRING CO., LTD. 's advertising spending was 1.2 billion in 2019, accounting for 5% of revenue, which is a very low amount in the fast consumer industry. In other words, it achieves the highest benefit with the lowest cost.From this point of view, NONGFU SPRING CO., LTD. is a talented player in "marketing", but can NONGFU SPRING CO., LTD., who takes marketing as the king, still have a say in the future? The answer is still uncertain.

It is worth noting that NONGFU SPRING CO., LTD. has had many cases of public welfare marketing activities, and he has joined hands with Sina Wuxi to recruit "World Water Day Public Ambassador" to convey the environmental protection concept in line with the tone of its brand.

However, according to relevant media reports, around November last year, NONGFU SPRING CO., LTD. "fetched water to destroy forests" in Wuyishan City. Even if it was needed to collect water, it violated the regulations of the Forestry Law of the people's Republic of China and damaged the agricultural and forestry ecological environment. The theory of integrated marketing communication emphasizes that brands should uniformly convey "one voice". Although advertising packaging can bring gorgeous appearance to NONGFU SPRING CO., LTD., if the core is not consistent with his development concept, then the brand image will be greatly reduced.

NONGFU SPRING CO., LTD., who has opened Internet channels with foresight, seems to have failed in the new retail era that has arrived.

NONGFU SPRING CO., LTD., who wants to connect online and offline, has opened official flagship stores on e-commerce platforms such as JD.com, Tmall and Pinduoduo, but the high logistics fees make users not inclined to buy online, in other words, the drinking water industry is only composed of e-commerce goods, if the price reduction promotion, the practical significance is not great.

The problem is, when online channels become an important part of people's lives, fast consumer industries can not give up, how to make system iterations in the case of the rise of new marketing promotion? This is what NONGFU SPRING CO., LTD. may face and think about.

03 is a long journey.

According to data from Guojin Securities, the market size of packaged drinking water is about 200 billion yuan, with a compound growth rate of more than 10% in the past few years. It expects the industry's CAGR to be 15% in 2019-2024, and NONGFU SPRING CO., LTD. 's market share will rise from 20.9% in 19 years to 22%, 23% and 24% in the next three years.

The implication is that under the condition that there is still room for growth in China's bottled water market, NONGFU SPRING CO., LTD. still hopes to occupy more market share. But if he wants to maintain his dominant position all the time, NONGFU SPRING CO., LTD. needs to pay attention to some hidden dangers in his development.

First of all, let's return to the product itself.

The water source resources for the survival of the drinking water industry is the core of the production of packaged drinking water. However, with the development of the industry, there are fewer and fewer undeveloped water sources. Take the mining of mineral water as an example, it is necessary to apply for the exploration right first, and only after the investigation is qualified can you apply for the mining right and water collection certificate; the exploration period is at least one year, and the cycle is generally about 3 years, and the exploration period of NONGFU SPRING CO., LTD. 's Emeishan base is as high as 8 years.

Although the water source area currently owned by NONGFU SPRING CO., LTD. is far larger than the company's actual production capacity, with the stricter environmental protection policy, the development of superior water sources is becoming more and more scarce, affecting NONGFU SPRING CO., LTD. 's future product upgrading to a certain extent.

Secondly, NONGFU SPRING CO., LTD. 's price is also eye-catching.

Admittedly, NONGFU SPRING CO., LTD. 's small bottled water mainly costs two yuan, which is comparable to the high-end water category, and the lower can open the gap between low-end water. This pricing can be described as the core moat, bringing it long-term price advantages and revenue stability. However, in recent years, NONGFU SPRING CO., LTD. is developing medium-and large-scale packaging water business, but it appears to be slightly lower in price.

NONGFU SPRING CO., LTD. 4L water costs 6.50 yuan, by contrast, Chunyue 4.5L water sells for 5 yuan, and today's Mailang 5L water costs only 5 yuan. In small goods, consumers may be willing to trade the price difference of 1-2 yuan for higher quality, but in large goods, in the case of the same number, low prices are obviously easier to pry the sensitive nerves of consumers.

Similarly, the rapid rise of other subdivided tracks in the soft drinks industry can not be ignored.

Although NONGFU SPRING CO., LTD. has already established a diversified matrix of products, its beverage products are not strongly competitive. According to public data, its revenue from tea drinks, energy drinks and fruit juice drinks decreased by 10.7%, 36.4% and 9.7% in the first half of 2020 compared with the same period last year. There are many brands in the beverage market segment, including the veteran Coca-Cola Company, Unification and other giants, and then the rising star Yuanqi Forest. NONGFU SPRING CO., LTD. still needs to make constant attempts to find a place to gain a firm foothold.

NONGFU SPRING CO., LTD. has been around for 24 years, and the man at the helm, Zhong Jianyu, is also 67 years old, and there is no successor yet, and the story of a new generation of rivers and lakes has just begun.