Advantages of Water Purification Industry

Current tap water treatment plant still uses the conventional technoledge, turning river water or groundwater into drinking water through simple process of "coagulation and sedimentation, filtration, disinfection and purification". This process can effectively reduce turbidity and remove suspended solids, but cannot completely remove organic contaminants, pesticides, environmental endocrine disruptors and phycotoxin, thus has no effects against micro-contamination caused by organic pollution. Tap water from water plant sometimes is out of, or even far exceeds the detection limit.

Major water distribution pipelines of many big cities in China were installed a long time ago. Under years of physical, chemical, electrochemical and microbiological reactions, irregular "growth rings" gradually formed up and built up on the inner surfaces of pipes. These "growth rings" restrict the flow of water in pipes, reduce carrying capacity, antiquate pipeline network and seriously pollute water, giving it a "rusty look". Frequent health incidents caused by pollution from aging pipelines, to some extent, offset all the quality improvement efforts made by the water department.

Water supply for low-rise buildings came through pipelines directly connected to water plant, while high-rise buildings rely on secondary water supply facilities. When lacking regular cleaning, disinfection and inspection, water supply facilities will cause secondary water pollution. Such cases are very often and will lead to bad customer experiences, causing nausea, vomiting, abdominal distension, diarrhea, or even serious diseases.

        At present, water treatment industry is flourishing. Competition in the industry went through phases from exploratory market operations by small enterprises, to large-scale marketing operations by big brands and foreign companies. Industry insiders estimate that market in China will maintain its rapid growth for the next 5-10 years before entering into a relatively stable period.
Initial stage of water purification industry has the following characteristic:

a) Primary market has not yet formed a strong brand phalanx. Without an established leading brand phalanx, no brand along can occupy a very larger market share (usually the top three brand occupy a total market share of 40% -60%). Manufacturers and agents of a brand will both have the opportunity to seize larger market.

b) The water industry in its initial stage enjoys a substantial, or rather called huge (300-400%), profit margins. Price war and other such means of competition only happen when the industry reaches a relatively mature stage.

a) Rapid growth rate of the industry

    From more than 200 million units sold in 2002 to more than 10 million units sold in 2007, Total sales volume in water purification industry has increased fivefold within 5 yrs time. Market capacity is growing very fast, even reached an average annual growth rate of 200% in 2008-2011. In the next five to ten years, this growth rate will maintain or be even higher.

In Europe, United States and other countries and regions, direct drinking water machines have become the choice of more than 70% consumers. With the improving living standard of China's urban residents, traditional ways of acquiring drinking water is in face of a revolution, terminal purification will dominate the future water market and change people's concept of acquiring drinking water.

 According to statistics, the domestic market capacity for water treatment equipments will be over 250 billion yuan. In the next eight yrs, 35% families will move into new homes, which mean an annual average of more than 25 million kitchen appliances need replacement. Domestic water treatment industry will flourish during the next eight yrs, and will be profitability over a long-term period;

b) Blank spots of a new industry. Although after years of development, water purification industry, until now, do not have any domain brand/brands in any area.

c) Regional blank spots. Market penetration is still very low. Not only in second and third tier cities, but in first-tier cities as well, including the provincial capital.

d) Blank spots in consumer demands. Demand for water purification products are still not effectively capture and grasp, there is still a lot more to explore.