Water purifiers are water purification equipment that removes hazardous wastes such as chemicals, biological contaminants and suspended solids from drinking water for drinking purposes. Water purifiers entered China in the 1980s, after decades of development. China has now become the world's largest producer of water purifiers. Due to frequent water pollution accidents in recent years, people have paid attention to drinking water safety issues. Drinking water treated with water purifiers is safer and more in line with national standards. 4. Due to consumer preference, the penetration rate of water purifiers in the Chinese market has gradually increased.
China's drinking water consumption structure changes, water purifiers will account for half of the country
Today, there are three main ways in which drinking water is used in China: boiled water, packaged water, and water treated with water purifiers.
Boiled water: mainly refers to drinking water after tap water is boiled. Tap water, including live water, urban water supply, municipal tap water and pipeline water, etc. come from indoor faucets or outdoor faucets. Tap water supply requires complex supporting systems, including stable water sources, pipeline networks and water. Treatment plant. After purification and disinfection by the water treatment plant, tap water is delivered to the end user via the pumping station. In China, tap water can only be consumed after boiling.
Packing water: mainly includes bottled water and bottled water. It is generally obtained by purifying tap water or groundwater by modern industrial techniques such as reverse osmosis, electrodialysis and distillation, and injected into PVC drums or plastic bottles through the filling production line. Generally 18 liters, retail price is between RMB 8 and RMB 30. Drinking water with water heating and/or cooling function is generally used together with bottled water. Bottled water is generally 500 ml, the price is between RMB 2 To RMB 10 yuan.
Water Purifier: Water purifiers include electronic water purifiers and non-electronic water purifiers (such as terminal water purification filters). Common water purification technologies include reverse osmosis, carbon filtration, microfiltration, ultrafiltration, UV oxidation and electricity. For dialysis, etc., in order to optimize the water purification output, water purifier manufacturers usually combine the above technologies.
Note: Others include well water, fresh water, spring water and other waters consumed in rural areas. Source: Sullivan
China's total drinking water consumption increased from 100.32 billion liters in 2013 to 1,066.6 billion liters in 2017, with a compound annual growth rate of 1.5%. Sullivan analysis believes that total drinking water consumption will grow at a compound annual growth rate of 1.6%. Increased to 175 billion liters by 2020. Among them, water consumption by water purifiers increased from 113 billion liters in 2013 to 390.9 billion liters in 2017, with a compound annual growth rate of 28.6%, mainly due to net The rapid increase in the number of water plants and concerns about safe drinking water are increasingly concerned. With the popularity of water purifiers, water treated by water purifiers is expected to account for a larger share of drinking water consumption. Sullivan is expected The water consumption by the water purifier is expected to reach 650.4 billion liters in 2022, accounting for more than half of the total drinking water consumption.
From 2013 to 2017, boiled water is still the most important way of drinking water in China. In 2017, boiled water accounted for about 45.1% of the total drinking water consumption of residents. Boiling water provides a more convenient source of drinking water. However, with pollution sources With the increase, harmful substances in tap water cannot be completely filtered or disposed of by traditional boiling methods. At the same time, safer and more in line with national standards, water purifiers are gradually being favored by consumers. Boiled water is expected to be gradually packaged. Instead of water treated with water purifiers, the proportion of consumption at the beginning of white will gradually decrease. However, due to its portable characteristics, the consumption of bottled water is expected to remain at a stable level. The water treated by the water purifier will gradually Instead of plain water and bottled water, the consumption is expected to reach 56.3% in 2022.
Rapid growth of commercial water purifier market to solve large-scale drinking water safety problems
China's drinking water market is divided into residential drinking water market and commercial drinking water market. The total consumption of commercial drinking water increased from 311.9 billion liters in 2013 to 344 billion liters in 2017, and is expected to further increase to 378.4 billion liters by 2022. The consumption of commercial drinking water treated by water purifiers increased from 33.4 billion liters in 2013 to 81.2 billion liters in 2017. Sullivan expects commercial drinking water consumption by water purifiers to be in the next five years. The year will continue to grow at a compound annual growth rate of 13.7%.
In the commercial sector, boiled water is still the most commonly used method of drinking water, mainly because of its low price and most commercial consumers are still used to drinking boiled water. Especially in some large commercial areas, such as factories, public institutions, government organizations, etc., often use boiled water. The workers, who poured water into the thermos and distributed them to the company's employees. In addition, due to the higher water dispenser capacity, the proportion of bottled water increased from 24.2% in 2013 to 32.2% in 2017. In the future, barrels The proportion of water will continue to increase, but the growth rate will slow down.
The power to promote commercial water purifiers is mainly due to lower market penetration and huge market potential. In office buildings, hospitals, schools, restaurants and other commercial facilities that focus on drinking water safety, there is usually a huge flow of people, most of the public Regional facilities still rely mainly on traditional drinking water methods such as boiled water and bottled water. By installing water purifiers in these commercial facilities, water and health safety issues for large-scale populations can be effectively solved. Sullivan predicts water treatment by water purifiers. The proportion of commercial drinking water consumption will continue to grow rapidly, and the proportion of commercial drinking water consumed by water purifiers will increase from 23.6% in 2017 to 40.8% in 2022.
China's water purifier market penetration rate is low, commercial water purification market retail sales growth is rapid
Compared with developed countries, China's water purifier market penetration rate is very low. In 2017, China's water purifier penetration rate was about 21.7%. At the same time, South Korea's water purifier penetration rate is about 84.6%, Japan's For 78.8%, the United States and the European Union are 72.9% and 70.1% respectively. There are several reasons for the low penetration rate of the water purifier market: First, compared with developed countries, China's urbanization rate is relatively low, water purifiers The total amount is also relatively small. Moreover, for a long time, consumers have used boiled water as the main source of drinking water. Therefore, consumers lack relevant knowledge about the water purification process. In addition, secondary pollution in bottled water, pipeline network And secondary water supply is more likely to occur, but consumers do not have a comprehensive understanding of secondary pollution. With the level of urbanization and education, the penetration rate of China's water purifier market is expected to reach 37.9% in 2022.
In 2017, the retail sales of China's water purifier market was RMB 103.3 billion. From 2013 to 2017, the retail sales of China's water purifier market increased from RMB 47.2 billion to RMB 103.3 billion, with a compound annual growth rate of approximately 21.6%. The rapid growth is mainly due to consumers' awareness of water purifiers, as well as increasing urbanization levels and disposable income. Sullivan expects retail sales in China's water purifier market to reach 233.2 billion in 2022. The compound annual growth rate of the renminbi remained at around 17.7%.
The end users of China's water purifiers can be divided into residential users and commercial users. The retail sales of household water purifiers increased from RMB 39.4 billion in 2013 to RMB 84.7 billion in 2017, with a compound annual growth rate of approximately 21.1%. From 2017 to 2022, it will grow at a compound annual growth rate of 17.4% to 189.2 billion yuan. The retail sales of commercial water purifiers will increase from 7.8 billion yuan in 2013 to 18.6 billion yuan in 2017. It is 24.3% and is expected to grow to a compound annual growth rate of 18.8% from 2017 to 2022 to RMB 44 billion. From the perspective of development trends, the commercial water purification sector has shown strong growth potential. After several years of development. The drinking water purifier market is increasingly concentrated. In the commercial sector, the top ten manufacturers account for 19.0% of the market share, of which the Haoze water purification market share ranked first.
The water purifier market presents different modes of leasing mode. The retail sales of the market are accelerating.
According to the sales method, the business model of China's water purifier market can be divided into sales mode and leasing mode. In 2017, the retail sales of sales model and leasing model were 95.6 billion yuan and 7.7 billion yuan respectively. Currently, sales The model is the mainstream business model of the current water purifier market. In 2017, the sales volume of the sales model reached RMB 95.6 billion, accounting for more than 90% of the overall market size. The retail price of the water purifier in the leasing model was RMB 4 billion in 2013. It has grown to 7.7 billion yuan in 2017, with a compound annual growth rate of 17.8%. The driving force for growth is mainly due to the fact that more companies use the rental model to sell water purifiers, especially the rapid development of Haoze water purification, a leading leasing model. At the same time, other traditional sales-oriented companies have gradually started to develop leasing business. However, due to the high barriers to entry for enterprises adopting leasing mode, the leasing business of these enterprises has developed slowly. Sullivan predicts that the future leasing model The concentration of the water purifier market will be further enhanced. In 2020, the retail sales of the leasing model will reach 22.6 billion yuan. The compound annual growth rate of the renminbi from 2017 to 2022 is 24%.
In the traditional sales model, the manufacturer directly sells the product to the end consumer. Under normal circumstances, the consumer will be provided with a one to two year warranty period, but does not include maintenance, replacement of filter elements and other after-sales services, direct purchase of water purifier Consumers need to periodically purchase and replace the water purifier filter every year. However, due to the low awareness of replacing the filter element, consumers are very likely to neglect to replace the filter element, which may cause long-term impact on the health of customers drinking water. However, Innovative leasing models have become one of the best solutions for producers and consumers. Companies that use the leasing model receive recurring cash flow annually in the form of annual service fees, and consumers do not need to replace the filter cartridges, repairs and Additional after-sales service payouts. The leasing model closely integrates the business with the consumer by establishing long-term and sustainable relationships, enabling the company to take over the end-customer market more quickly and quickly. In addition, for end users, the leasing model and sales model will Bring different costs, ten years of use, and use the lease model under the same conditions for business and home Save 22% and 12% respectively with customers.
A variety of factors promote the rapid development of the water purifier market
From the analysis of the main driving factors of the water purifier market, the increasingly serious water pollution, the level of urbanization and the increase of urban disposable income, consumption upgrade and lower water purifier use cost have become the main factors driving the development of the water purifier market.
Increasing water pollution: Water is the source of life. However, due to the lack of safety awareness, water pollution has become a serious environmental problem in China. Thousands of water pollution accidents endanger the environment and human health every year. The main sources of pollution come from industrial, agricultural and sanitary wastewater, large numbers of lakes, rivers, reservoirs and groundwater that are already incapable of drinking due to serious pathogenic microorganisms, metal ions and chemical contamination. Many pollutants cannot be disposed of by conventional water treatment methods, and It is very likely that secondary pollution will occur during the transportation and storage of drinking water. Even after the pollutants are removed, the boiled water is still unto drinkable because some metal ions and chemicals cannot be eliminated by boiling.
The level of urbanization and the increase of disposable income in cities: The rapid growth of China's economy has injected a powerful force into the process of urbanization, which has led to a significant increase in disposable income and consumption levels. In 2017, China's urbanization level reached 5%. It is expected to reach 66.0% in 2022. At the same time, the disposable income of urban households has increased from RMB 26,955 in 2013 to RMB 36,396 in 2017, with a compound annual growth rate of 7.8%. With the development of macro economy, urban households The disposable income is expected to reach RMB 53,224 in 2022. With the increase in urbanization rate, disposable income and consumption levels, urban households are more willing to pay for non-essential items to further improve the quality of life, such as household appliances (such as Water purifiers. More and more urban households are gradually becoming aware of the importance of drinking water safety.
Consumption upgrade: With the increase in disposable income, China has entered a new round of consumption upgrade. The high consumption power of Chinese consumers, especially the generation after the 80s, is increasingly inclined to choose high-quality, high-performance mid-to-high end. Products. Consumers pay more attention to the quality of drinking water and are willing to install water purifiers to improve their quality of life. In addition, the high-tech water purifiers of smart home life solutions using IoT technology can attract consumers more.
Water purifiers are less expensive to use:
Compared with bottled water, the water treated by the water purifier has many advantages, such as avoiding the secondary pollution that may be caused when replacing the bottled water and the frequent replacement of the bottled water. Although the price of the water purifier is far Higher than water dispensers, but the cost of water purifiers is much lower than that of bottled water. According to the calculations in the table below, domestic and commercial water purifiers can save about 37% and 56% respectively over a 10-year period. The cost of drinking water. Considering the increase in urbanization rate and disposable income, the proportion of water treated by water purifiers in drinking water consumption is expected to continue to increase, thus further increasing the penetration rate of water purifiers in the Chinese market. In this case, the water purifier that is more advantageous than the bottled water and more cost-effective will be more popular with consumers.
China's water purifier market concentration four major development trends are worth looking forward to
China is the world's largest producer of water purifiers, with thousands of water purifier manufacturers, but there are still a large number of small and medium-sized enterprises using simple purification technology to produce low-end, cheap water purifiers, with consumers paying attention to drinking water safety. As well as the demand for high-quality water purifiers, the number of such small and medium-sized enterprises will gradually decrease. After years of development in the Chinese water purifier market, the market concentration has increased significantly. The top ten water purifiers achieved a total retail sales of 23.14 billion, with a total market share of 22.4%. Haoze Water (HK.02014) with its innovative leasing model and deep cultivation in the commercial water purifier market, in 2017 In the year, the water purifier market share ranked fourth, and in the commercial field, it achieved the best performance in the ranking. As a water purifier enterprise that took the lead in adopting the leasing model, Haoze Water has accumulated a large number of end users. As of December 31, 2017, Haoze Water Purification has a renewal rate of over 90% in commercial and residential areas. At the same time, with the increase in water purifiers, the water purifier after-sales service market has remained stable. Long, and as a leader in leasing mode, Ho Chak water purifier sales is calculated in accordance with China's largest water purifier sales service market participants, the proportion of its service revenue to total revenue is much higher than other competitors.
Judging from the future development trend, Sullivan believes that in the future, the water purifier market will further replace the traditional drinking water mode, the change of end-user behavior, technological change, and the development of smart home.
The water purifier further replaces the traditional drinking water model: As the level of urbanization and disposable income increase, the market penetration of water purifiers will continue to increase, and is expected to reach about 9% in 2022. In addition to replacing traditional boiled water, The water treated by the water purifier will also be more popular than bottled water and bottled water. From 2013 to 2017, the total water consumption of the water purifier treatment increased at a compound annual growth rate of 28.6%, which is higher than that of the barrel. The growth rate of water and bottled water, which accounted for about 29% of the market in 2017. In the future, water consumption by water purifiers is expected to increase at a double-digit rate, further replacing plain water. The water consumption of the plant will reach 650.4 billion liters, accounting for about 56.3% of the total drinking water consumption in the country.
Changes in end-user behavior: As drinking water safety awareness increases, healthy drinking water will become a major trend for the foreseeable future. Consumers prefer to install water purifiers at home to improve their quality of life and pay more attention to healthy drinking water for older children. In addition, companies with better after-sales service, better brand and better water purification will be more popular in the entire water purifier market. In addition, the scope of water purifiers will be extended to more different. Fields such as cooking and washing.
Technological change: Some technologies have great potential for application in the water purifier market. For example, ozone purification technology will likely be widely used. It uses the strong oxidizing power of ozone to oxidize pollutants in water to purify water. Purpose. The organic macromolecular particles in the water will be first oxidized and then decomposed into small molecular particles, which will eventually be absorbed or disposed of. Therefore, ozone purification technology will produce better water treatment effects on the water purifier.
The development of smart homes: In recent years, with the advancement of artificial intelligence, cloud computing and big data, the market scale of smart homes continues to expand. As a major component of smart homes, the market size of smart home appliances has also witnessed in the past few years. Great growth. From 2012 to 2017, China's smart home appliances sales revenue continued to grow at a compound annual growth rate of 26%. At the same time, as the Internet penetration rate increases, the user's Internet environment will increase significantly. Sullivan predicts that China The sales revenue of smart home appliances is expected to grow at a compound annual growth rate of 17% in the next five years. In this case, many household appliances, such as televisions, air conditioners and water purifiers, have been designed to be intelligent and Networking technology enables interconnection and remote control. Water purifiers using IoT technology will also become more intelligent. For example, most consumers do not know to change filter components or understand water quality. By using IoT technology, consumption It is easier to understand the state of water purification.