Positive Comments: The Rise of Chinese-style Health-preserving Water, Capturing New Opportunities in the “Water Substitute” Market by Precise Grasp of Consumption Trends
In recent years, the collision between the health concept of “drinking eight glasses of water a day” and the demand for “light health preservation” has given rise to a rapidly growing new market segment – Chinese-style health-preserving water. According to the prediction of前瞻 industry research institute, its market scale will reach 1.08 billion yuan in 2028, with an annual compound growth rate of nearly 90%. Behind this phenomenal growth are the precise matching of consumer demands, the product innovation ability of brands, and the synergy of the industrial chain, which provide positive signals worthy of attention in the field of innovation and entrepreneurship.
First of all, the rise of Chinese-style health-preserving water essentially lies in the high fit between “pain points of demand” and “product value”. Consumers’ consensus on “sugar reduction” and pursuit of “light health preservation” have resonated strongly at the demand point of “water substitute”: they hope that drinks have flavors and are more diverse than water, and at the same time, they require drinks to be healthier and burden-free compared with sugary drinks. Traditional sugar-free tea meets the health needs, but has a single taste (mainly tea flavor). Chinese-style health-preserving water, through the formula of “homology of medicine and food” (such as American ginseng, lophatherum gracile, and coix seed), provides more diverse flavor options under the concept of “light health preservation” (such as the combination of fruits and traditional Chinese medicine), and even provides emotional value for “burnout workers”. Drinking a bottle of health-preserving water containing ophiopogon japonicus and dendrobium, even if the actual efficacy cannot be verified, can bring psychological satisfaction of “active health preservation”. This dual value of “function + emotion” enables it to become the fastest-growing sub-segment in the plant beverage category with a growth rate of 37.64% when the growth rate of sugar-free tea slows down (only 4.1% in Q3 2024), perfectly meeting the new demands of consumption upgrading.
Secondly, the product iteration ability of brands has promoted the leap of this category from “niche experiment” to “mass consumption”. Take Hema as an example. Its health-preserving water has gone through three stages: the 1.0 version (apple and astragalus water, tangerine peel and four-ingredient water) was a trial of “homology of medicine and food”; the 2.0 version (light health-preserving water) clearly positioned itself as a “water substitute” and took palatability as the core indicator; the 3.0 version (five-juice drink, summer-clearing vitality water) cooperated with the time-honored traditional Chinese medicine brand Liliangji to “focus on classic prescriptions”. Each step has solved the core problems of early products. The initial tangerine peel and four-ingredient water was taken off the shelves due to taste disputes. However, by reflecting on the fact that “water substitutes need high-frequency repurchase”, Hema shifted the R & D focus to “being palatable”. For example, it used pear cubes and water chestnuts to balance the medicinal taste and utilized the sweet aftertaste of ophiopogon japonicus and American ginseng to “create an oriental sweet taste curve”. Finally, the fig and flaxseed water it launched even surpassed the industry’s best-selling product, red bean and coix seed water, and became the top-selling plant beverage in Hema. This product thinking of “trial and error – iteration – optimization” not only verifies the core thresholds of “water substitutes” (palatable and affordable), but also promotes the maturity of the entire category.
Moreover, the collaboration between time-honored brands and new channels has injected trust endorsement and supply chain advantages into the industry. The “health preservation” attribute of Chinese-style health-preserving water naturally requires consumers’ trust. The cooperation between Hema and Liliangji is a typical example. Liliangji, as a time-honored traditional Chinese medicine brand, provides endorsement of classic prescriptions (such as the “summer-heat relieving soup” based on ancient prescriptions), self-built raw material bases (such as the Yunnan dendrobium base), and guarantees the quality of medicinal materials. Hema, on the other hand, with its offline channel advantages (shelf exposure in Hema stores) and insights into young consumers (such as price sensitivity and preference for trying new things), transforms traditional classic prescriptions into products that meet modern consumption habits. This combination of “traditional resources + new consumption scenarios” not only solves the problem of “credibility” of health-preserving water, but also reduces costs through the supply chain (such as direct procurement of raw materials), achieving a price reduction (from 5.9 yuan in the 1.0 version to 5.9 yuan in the 3.0 version with better taste), which provides key support for the large-scale development of the category.
Finally, the rapid growth of the market verifies the entrepreneurial logic of “going with the trend”. Looking at the history of sugar-free tea, brands like Ito En, Suntory, and Orient Leaf had been dormant for more than a decade before experiencing an explosion in 2017 when the trend of sugar reduction emerged. Similarly, Chinese-style health-preserving water experienced slow growth from 2018 to 2022 (the market scale increased from 10 million yuan to 100 million yuan) and didn’t see a 350% growth rate until 2023 when brands like Yuanqi Forest entered the market and consumers’ demands for sugar reduction and light health preservation converged. This process confirms the rule that “it’s difficult to lead the trend, but easy to follow it”. Entrepreneurs don’t need to create demands, but should keenly capture the existing but unmet “demand intersections” and fill the gaps through product innovation. The success of Chinese-style health-preserving water vividly illustrates this logic.
Negative Comments: Hidden Worries Behind the High-speed Growth, Homogenization, Supervision, and Cost Pressures Need to be Addressed
Although the future of Chinese-style health-preserving water is promising, there are hidden risks behind its high-speed growth. From industry competition and product characteristics to the regulatory environment, multiple challenges may affect the long-term healthy development of this category, which entrepreneurs need to be vigilant about.
Firstly, homogeneous competition may accelerate the “red ocean” situation and weaken the brand’s differentiation advantage. Currently, the intense competition in the water substitute market has spread from sugar-free tea to health-preserving water. Both new and established players are flocking to the market by “competing in formulas, taste, consumption scenarios, and sales channels”. Suntory has launched a new health drink brand “Huanfang”, Master Kong has launched cassia seed and barley drink, and brands like Laiyifen and Lianhua Water Industry have entered the market across industries. Hema is “competing in classic prescriptions” with Liliangji. However, upon closer inspection, most products still revolve around the basic raw materials of “homology of medicine and food” (such as red beans, coix seeds, and wolfberries), with limited innovation in formulas. Even Hema’s classic prescription health-preserving water is essentially an improvement of traditional classic prescriptions such as the summer-heat relieving soup and five-juice drink, and has not formed an irreplicable technological barrier. If subsequent brands only stay at the level of “changing raw materials and adjusting proportions”, homogenization will lead to consumer aesthetic fatigue and ultimately result in a “price war”. Just as the average price per 100 ml of sugar-free tea has been decreasing by 2% month-on-month for several consecutive months due to product similarity, health-preserving water may follow the same path if it fails to break through in formula innovation.
Secondly, the concept boundary of “light health preservation” is blurred, posing risks in terms of supervision and trust. As mentioned in the news, the health-preserving water “has no efficacy marked on the bottle, and only uses words like’summer-heat relieving soup’ and ‘using ancient prescriptions in modern times’ in the APP introduction”. This kind of “implied but not promised” promotion method, although avoiding the risk of violating regulations on direct efficacy claims, still operates on the edge of supervision. According to China’s Advertising Law and the Implementation Regulations of the Food Safety Law, ordinary food cannot promote health care functions or therapeutic effects. If consumers have overly high expectations due to the concept of “light health preservation” (such as thinking it can “replenish qi and blood”), and the actual efficacy is not obvious, it may lead to complaints or a trust crisis. For example, the “One Whole Ginseng Water” had a short-lived popularity due to its high price of 19.9 yuan and implied promotion of being a “savior for staying up late”, partly because consumers’ expectations for its “efficacy” were not met. In the future, as the market scale of health-preserving water expands, regulatory authorities may strengthen the review of the promotion of the “health preservation” concept. Brands that overly rely on the emotional value of “light health preservation” may face compliance risks.
Thirdly, the balance between price reduction and quality assurance is a difficult problem, testing the supply chain capabilities. One of the core thresholds of “water substitutes” is “affordability”. Therefore, brands generally choose to reduce prices. For example, Hema’s health-preserving water has dropped from 5.9 yuan in the 1.0 version to 5.9 yuan in the 3.0 version (with the same capacity but better taste), and the price of Haowangshui’s health-preserving water is set at 2 – 5 yuan, both lower than the 19.9 yuan of the “One Whole Ginseng Water”. However, price reduction is based on cost control. The raw materials of health-preserving water are mostly those with the homology of medicine and food (such as American ginseng and dendrobium), and their procurement costs are higher than those of ordinary fruits or tea. If brands compress the quality of raw materials to reduce costs (such as using low-priced or non-originally sourced medicinal materials), it may lead to a decline in taste (such as too strong a medicinal taste) or a loss of consumer trust. If they rely on time-honored brands or self-built bases (such as Liliangji’s Yunnan dendrobium base), the initial investment in the supply chain is relatively high, which is difficult for small and medium-sized brands to replicate. This contradiction between “quality and cost” may lead to market segmentation: leading brands can maintain cost-effectiveness through supply chain advantages, while small and medium-sized brands may withdraw from the market due to cost pressures or fall into a vicious circle of “low price, low quality”.
Fourthly, consumers’ repurchase rate depends on “scenarios + taste”, and long-term growth requires breaking through single demand. Currently, the main consumption scenario of health-preserving water is “daily hydration”, and the target group is mainly young people concerned about health. However, the essence of “water substitutes” is a beverage with “high frequency and low decision-making cost”. If brands only focus on the function of “substituting water” and do not expand more consumption scenarios (such as with meals or after sports) or target more segmented groups (such as pregnant women and the elderly), consumers may reduce their repurchase rate due to “taste fatigue” or “demand saturation”. For example, the growth of sugar-free tea slowed down in the early stage due to its single taste (only tea flavor) and was reactivated later through large packaging (for family scenarios) and fruit – tea mixtures (taste innovation). If health-preserving water fails to further segment in terms of scenarios (such as summer heat relief and winter warming) or target groups (such as “replenishing qi and beautifying” for career women and “refreshing” for students), it may face a growth bottleneck.
Suggestions for Entrepreneurs: Seize the Trend, Build Barriers with “Product Power + Compliance + Differentiation”
Facing the opportunities and challenges of Chinese-style health-preserving water, entrepreneurs can focus on the following aspects:
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Take “palatability + price rationality” as the core to create basic products for high-frequency repurchase
The core of water substitutes is to “substitute water”, so products must meet the requirements of “being palatable and affordable”. Entrepreneurs should prioritize palatability in R & D and avoid sacrificing taste by overemphasizing the “health preservation” feeling of “homology of medicine and food” (for example, Hema’s early tangerine peel and four-ingredient water was taken off the shelves due to taste disputes). They can learn from the strategy of “using natural sweetness instead of artificial sugar”, use natural ingredients like pear cubes and water chestnuts to balance the medicinal taste, or reduce the irritation of the medicinal taste through process optimization (such as low-temperature extraction). At the same time, the price should be controlled within the mainstream price range of 4 – 7 yuan for water substitutes to avoid repeating the high-price failure of the “One Whole Ginseng Water”. If the raw material cost is high, they can reduce the supply chain cost by cooperating with the origin (such as building self-owned bases or direct procurement) or launch small-sized packages (such as 330 ml) to balance the unit price and consumer acceptance. -
Achieve differentiation through “improvement of classic prescriptions + innovation of consumption scenarios” to avoid homogeneous competition
Facing the trend of “competing in formulas” in the market, entrepreneurs should break away from the basic raw material pool of “red beans, coix seeds, and wolfberries” and focus on the modern improvement of classic prescriptions (such as Hema’s “Summer-clearing Vitality Water” in cooperation with Liliangji). They can cooperate with time-honored traditional Chinese medicine brands or traditional Chinese medicine institutions to explore less-known classic prescriptions (such as the “Five-juice Drink” in “Treatise on Febrile Diseases Caused by Warm Pathogens”) and adjust the formulas according to modern consumers’ taste preferences (such as reducing the proportion of bitter medicinal materials and increasing sweet aftertaste components). At the same time, they should expand consumption scenarios. For example, they can launch “summer heat-relieving health-preserving water” in summer and “winter warming health-preserving water” in winter. They can also launch small-sized bottles for career people (for easy carrying) and large packages (1.5L) for family scenarios. Through the dual differentiation of “classic prescriptions + consumption scenarios”, they can build brand uniqueness. -
Strictly abide by the boundaries of “efficacy promotion” and use “trust endorsement” instead of “efficacy commitment”
Entrepreneurs should avoid directly promoting effects such as “replenishing qi and blood” and “beautifying”. They can build trust through methods such as “cooperating with time-honored brands”, “indicating the origin of raw materials”, and “providing third-party test reports”. For example, they can cooperate with time-honored traditional Chinese medicine brands (such as Liliangji), mark the origin of raw materials (such as “directly supplied from the Yunnan Dendrobium Base”), or provide third-party test reports (such as “0 sugar, 0 additives” and “no pesticide residues detected”). In addition, they can educate consumers about the scientific logic of “light health preservation” (such as “ophiopogon japonicus has the effect of promoting fluid production” and “coix seeds help remove dampness”), but clearly state that it is “not for therapeutic purposes” to avoid misleading consumers. -
Build the collaborative ability of “supply chain + channels” to ensure quality and scale
The quality of raw materials with the homology of medicine and food directly affects taste and consumer trust. Entrepreneurs should attach importance to supply chain construction. They can cooperate with the origin to build raw material bases (such as Yunnan dendrobium and Fujian coix seeds) or bind with time-honored brands with self-built bases (such as Liliangji) to ensure the stable supply and controllable quality of raw materials. In terms of channels, in addition to traditional supermarkets, they can focus on convenience stores (high-frequency consumption scenarios), online e-commerce platforms (to accurately reach young users), and offline experience stores (such as the tasting activities in Hema stores) to increase brand exposure through “full-channel coverage”. -
Continuously iterate products and pay attention to the “subtle changes” in consumption trends
The demand in the water substitute market changes rapidly (such as from “sugar reduction” to “0 artificial sweeteners”). Entrepreneurs need to maintain agile R & D. They can quickly capture taste preferences (such as “not liking too strong a medicinal taste”), price sensitivity points (such as “more likely to repurchase at a price below 5 yuan”), and new demands (such as “needing electrolytes + health preservation after sports”) through user feedback (such as social media comments and offline surveys) and adjust the formulas or launch new products accordingly. For example, in response to the trend of “0 artificial sweeteners”, they can explore using natural sweeteners like mogroside to replace artificial sweeteners; in response to the “functional” demand, they can launch “light health preservation + micro – function” beverages with added vitamins.
In conclusion, the rise of Chinese-style health-preserving water is the result of the resonance between consumption trends and product innovation. Entrepreneurs need to seize the core demand of “light health preservation + water substitute”, take product power as the foundation, compliance as the bottom line, and differentiation as the barrier to gain a foothold in this high-speed growing market.
