The purpose of the report is to know the Chinese market demand for bottled water industry. In order to enter into the new country for doing business, it is necessary for industries to research the market of that country. Besides this, various political conditions put threats for industries in that market. In the description, the discussion is carried on the Tasmania mountain water that is providing the natural drinking water to the customers. In this report, discussion starts with giving the brief overview of the Tasmania mountain water company.
It is also essential to know the market demand of that country for the respective product for which it is moving to that country. The expansion of Tasmania Company in China will require to know its people’s perception as well as rules and regulation of that country. Further, the discussion is carried on the political, environmental, legal, technological, social factor has been discussed. The discussion ends with providing the certain recommendation for better market growth in China.
Introduction about the Company
Tasmanian Mountain Waters come under the beverage industry of Australia. It takes the natural and perfect water from the nature and serves that water to the customers in the most natural form and good quality. Tasmania Mountain water mission is to provide the great quality product by taking the perfect water from nature. The natural spring water is a source of Magnesium, natural Calcium, Phosphorus, as well as other minerals with the good possible PH level 7.6 to 7.8. The bottled water of Tasmania drinking water is available in 5 litre as well as 10 litre containers. Customers can use these products for long time and these have the shelf life of approx. 5 years.
These are also convenient for kitchen. Especially, from the company’s information, it is founded that the 10-litre cask is suitable for long term but it should be use before 2 year. By taking the water naturally, it filters the water many times and then serves to the final consumer. This helps the industry in reducing the impurities of the water. Although the industry serve the China consumers by exporting its bottled water, but it will serve many opportunities if it will set up its business there. From the industry report of Tasmania, it is come to know that it is planning to invest about $1milliuon in the new equipment as well as in employing the more staff in order to meet the demand (Blucher, 2015).
Political and Legal environment analysis
Political as well as legal factor of any country affects the organization for taking entry into other country. For taking entry into China, it is necessary to know the political and legal condition of China for Tasmanian Mountain Waters. From the report, it is founded that China has still the problem of openness. Due to the stable political environment in China, improved infrastructure and cheap labour, China proves to be the best country for doing investment (Shira, 2016).
In this way, Tasmania can enter into the market of China with less political threat. In addition to this, it is founded that the demand from outside has boosted the growth in China in spite of any economic restructuring done by the communist government. Due to its strong political condition, it is also founded that the China has largest reserves in terms of foreign currency.
The government of China is concerned about the growth of Chinese industries that has created many opportunities there. However, China is also facing various challenges. The first and foremost challenge is associated with political system. This is lack of openness in the political system of china. Therefore, while moving to China, it is necessary for Tasmania to well research all the political factors that will affect the bottled water business (Santander, 2018).
There are various modifications done recently in the laws that mentions the level of chemicals used in the bottled water. The economy is getting bigger as well as stronger in China. The people of China are becoming more exposed to the western culture. Due to the increasing urbanization, Chinese government has made various laws for creating awareness among industries regarding the health of people (Li, 2011). Recently, Food safety authorities have created various new standards for bottled water industry. Bottled water has received the attention of public after it is founded that china biggest producer using the governments standard’s for water.
All the bottled water industries have adopted the various water standards by the inclusion of national standards. Currently, China has approx. 5,000 standards regarding the hygiene and food quality that was formulated by various government departments (Yang et al, 2017). New standard was also formulated by the China’s government for labelling of the bottled water in China. It has stated that the bottled water industry will labelled with either purified bottled water or other drinking water.
This will made the clear differentiation between the mineral spring water. It will display the minerals that have been added in the water during its production process (Food Bev, 2013). In today’s time, customers can easily switch to the that brand who is providing them healthy drink. In this way, Tasmania water industry should consider the demand of Chinese consumers before moving to that country.
There are various laws made by the Chinese government for regulating the bottled water industry. For the food and beverage industry, Chinese government also made a role that includes the copyright law, the patent law, anti-unfair competition law, and trade market law. The law of China also stated that the packaging of bottle water should be of 3-D trademark (Kaiman, 2014).
Economic and financial analysis
From the report, it is founded that the bottle water will always remain the biggest water market until 2021.Therefore; it presents an opportunity to expand its wings in the country of China. During the year 2016 to 2001, the global data has estimated that the bottle market of China will increase at the rate of 7.42%.This data will expand the global market with 57,903 million litres. This is the estimation made by the global report. Through this estimated figures, it can be made clear that the industries will boom by starting their business of Bootle water in China.
In addition this, new market research shows that the disposable income of Chinese people is also growing which states that demand of Bootle water likely to increase. The report presented by China marketing growth, it is founded that the revenue generate from bottled water was US$42,774M in the year 2018. From the economic report published about China, it is founded that the GDP has reached 165% of the corporate debt. The household debt has though become still low and the GDP has reached to 2575 in the year 2017.
This industry has been growing well in China in terms of its consumption and sales and likely to grow in the upcoming years. It is also stated that it is great opportunities for other companies who want to expand their business of bottle water. In China, the turnover of bottled water industry is more than approx. 90 billion Yuan. It also consumes more than 69 billion in terms of volume. The growing number of users and sales clearly shows that it is great opportunity for Tasmania industry to expand in China (Peters, Guo, Strauss & Zhu, 2015).
Social and cultural factor
The preferences of China’s consumer for consuming bottled water are increasing to a greater pace. Preferences of consumer play an important role before moving to any new country for expansion. In China, there is growing preferences for health as well as high quality water. This ensures that it will remain the biggest selling bottled water market. From the market report, it is stated that the consumer of bottle water in China has been raised to 29 litres that was 23.6 litres in 2013. These data’s are published by the Global Data regarding the consumption of bottled water in China (Hogan, 2017). The research stated that about 74 percent of the Chinese consumers likely to pay attention towards the capacity and materials when they choose the beverage and food.
It also highlighted that small packages, glass packaging have decisive impact under the packaging choices in China. When Tasmania industry will move to China, it should focus more on the packaging as well as quality of its bottled water so that consumer will shift toward that brand (Suo, 2015). Besides this, the cost of non-alcoholic drinks has increased at the cost of alcoholic drinks. In China, most of the people require the bottled water in their day-to-day consumption. People of China are addicted to consume the bottle water for their consumption. It is also stated that the consumers between the ages of 37 to 55 are becoming highly sensitive towards their eating habit. Due to this reason, they are moving towards consuming hygienic water.
This factor has increased the demand of bottled mineral water in China. By considering this factor, Tasmania industry can achieve a great market share in China. Recently, health experts are also advising the people to take more mineral water rather than consuming alcoholic drinks (Weinthal, Vengosh & Neville, 2017). The increasing negative outcomes from the alcoholic drinks have increased the use of bottled mineral water in China. Chinese middle class consumers have heavily contributed in the growth of Chinese market by their development in income.
It has also made effect by changes in consumption behaviour and expectations. This population due to rise in their income have expected the better standard of living. In China, the domestic players who are already growing there usually run the bottled market industry. In this way, while moving to China, Tasmania industry has to research the strategies that the local success players have adopted.
Technological and environmental factors
In today’s time, technology plays an essential role in serving the customers in best manner. Therefore, the cooperation achieved through marketing, advertising and promotional activities cannot be ignored. All these three activities help in effective marketing of the industries product. Television as well as internet has achieved the most growing marketing channels in terms of revenue and sales. These also made the product more attractive. Therefore, Tasmania industry before moving to China is required to expand in the marketing of its products and services that will set its product apart from other competitors (Pu & Fukushi, 2016).
It is stated that the innovation is the essential element of increment in bottled water industries. Consumers are moving toward those brands more that is providing bottled water in good packaging and in good quality. Therefore, Tasmania industry should make use of innovative technology in order to bring its bottled water in some attractive way to the consumers. It is also essential to use the automation technology that will help the industry in its improving its productivity. This will also help in utilising the resources in an effective manner. Besides this, it is founded that China is world leader in terms of technology. It will help the Tasmania industry to utilise the technologies in an effective manner (Wang, Yuan, Turel & Tu, 2015).
As the beverage, industry is highly indulged in plastic. Therefore, various environmental factors affect the beverage industry (Ding, Shen, Liu, Covaci & Yang, 2015). In today’s time, there is growing concern for environment all over the world by introducing the various fines for following the environmental friendly practices in manufacturing. Due to the developing country, there is growing concern for environment. It is now becoming more focused towards protecting the environment.
Due to the more concern for environment, it has already achieved the sustainable growth of 10 percent. Therefore, moving to the China for setting up bottled water industry, it has to comply with the environment rules. It has also developed a sustainable development strategy due to growth in China’s population and increasing people consumption for bottle (Renzetti, 2015).
Due to this, Chinese government has taken various initiatives for protecting the environment and improving the living standards of people. While the manufacturing of plastic bottles, it contains many harmful chemicals that pollutes the environment. Therefore, it is essential for Tasmania to take careful of harmful chemicals and take measure to eliminate it. The fulfilment of corporate social responsibility will help the Tasmania to easily expand its market growth in China (Wakeel, Chen, Hayat, Alsaedi & Ahmad, 2016).
Conclusion
In the limelight of above discussion, it can be concluded that Tasmania drinking water industry is totally associated with providing the pure and natural water to consumers. China is one of the strongest leader in the bottled water business due to its increasing demand of customers for it. Besides this, people are also becoming health conscious in China that increased the demand of mineral water. It is moving to China for expanding its bottled water business. There are various benefits as well as problems it will face in China.
From almost all the reports, it is founded that the bottled market industries are growing well in China. Demand for bottled water has been increasing largely in China that boosted the market growth of these industries. It presents various opportunities for the Tasmania industry to move in the market of China and grow its business. Due to continuous increasing demand of bottled water industry in China, Various industries are expanding its wings.
The market research report also states that in the upcoming years, demand for bottled water will increase and industries who are growing their will get more market share. However, there are various challenges also that present difficulties in doing business. The main challenge is the lack of openness in political system of China. Therefore, Tasmania industry should prepare itself according to that before moving for doing business in China.
From the all the discussion done above, it is recommended that Tasmania industry should properly research the Chinese market in order to succeed there. It is also suggested to the Tasmania industry to use innovative technologies that will properly discharge the plastic wastage in its manufacturing process (Miao, Tang, Wong & Zang, 2015). There are various laws made by the Chinese government for assuring the good quality water and proper disposal of wastage from the industries. Therefore, Tasmania industry should also comply to those rules and regulations in order to assure the best possible output. Overall, the growing bottled market in China will create many opportunities for new firms to expand their market but they require the proper customer’s demand in that country (Shapiro, 2017).
References
Blucher, A. (2015). Tasmanian water company to invest more than $1m in new Burnie water bottling plant to meet Chinese export deal with milk formula company. Retrieved from: https://www.abc.net.au/news/rural/2015-09-09/china-tasmanian-mountain-water-demand/6761534
Ding, J., Shen, X., Liu, W., Covaci, A., & Yang, F. (2015). Occurrence and risk assessment of organophosphate esters in drinking water from Eastern China. Science of the Total Environment, 538, 959-965.
Food Bev. (2015). China to regulated bottled water labelling. Retrieved from: https://www.foodbev.com/news/china-to-regulate-bottled-water-labelling/
Hogan, A. (2017). Changing Chinese consumers driving demand for bottled water. Retrieved from: https://www.ausfoodnews.com.au/2017/12/13/changing-chinese-consumers-driving-demand-for-bottled-water.html
Kaiman, J. (2014). China strengthens environmental laws. Retrieved from: https://www.theguardian.com/environment/2014/apr/25/china-strengthens-environmental-laws-polluting-factories
Li, J. (2011). China’s newly amended Water pollution control law. Retrieved from: https://www.wilsoncenter.org/publication/quest-for-clean-water-chinas-newly-amended-water-pollution-control-law
Miao, X., Tang, Y., Wong, C. W., & Zang, H. (2015). The latent causal chain of industrial water pollution in China. Environmental pollution, 196, 473-477.
Peters, M., Guo, Q., Strauss, H., & Zhu, G. (2015). Geochemical and multiple stable isotope (N, O, S) investigation on tap and bottled water from Beijing, China. Journal of Geochemical Exploration, 157, 36-51.
Pu, J., & Fukushi, K. (2016). Bacterial water quality and risk evaluation of bottled drinking water in China. International Journal of Food Safety, Nutrition and Public Health, 6(1), 1-13.
Renzetti, S. (2015). Non-household water demand: the industrial and commercial sectors. In Understanding and Managing Urban Water in Transition (pp. 297-310). Springer, Dordrecht.
Santander. (2018). CHINA: ECONOMIC AND POLITICAL OUTLINE. Retrieved from: https://en.portal.santandertrade.com/analyse-markets/china/economic-political-outline
Shapiro, J. (2016). China’s environmental challenges. London: John Wiley & Sons.
Shira, D. (2016). Q&A: Investing in China’s Food and Beverage Industry. Retrieved from: https://www.china-briefing.com/news/qa-investing-in-chinas-food-and-beverage-industry/
Suo, D. (2015). China Food standards: New requirement for packaged drinking water. Retrieved from: https://food.chemlinked.com/news/food-news/china-food-standard-new-requirements-packaged-drinking-water
Wakeel, M., Chen, B., Hayat, T., Alsaedi, A., & Ahmad, B. (2016). Energy consumption for water use cycles in different countries: A review. Applied energy, 178, 868-885.
Wang, Y., Yuan, Y., Turel, O., & Tu, Z. (2015). Understanding the development and diffusion of mobile commerce technologies in China: A biographical study with an actor-network theory perspective. International Journal of Electronic Commerce, 19(4), 47-76.
Weinthal, E., Vengosh, A., & Neville, K. J. (2017). The nexus of energy and water quality. In The Oxford Handbook of Water Politics and Policy. United Kingdom: Routledge.
Yang, J. F., Yang, L. M., Zheng, L. Y., Ying, G. G., Liu, C. B., & Luo, S. L. (2017). Phthalates in plastic bottled non-alcoholic beverages from China and estimated dietary exposure in adults. Food Additives & Contaminants: Part B, 10(1), 44-50.
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