China Water Bottle Market Q3 2023: The New Growth Pockets

Executive Summary#

China's online cup and bottle industry posted CN¥ 15.46 billion in sales on two leading Chinese marketplaces in the rolling year to August 2023, and while sales across the category came under pressure, several sub-categories grew quickly. Cold-retention insulated bottles reached CN¥ 550 million with growth of 92% year-on-year, products made of ceramic doubled (+100%), and insulated carafes gained approximately 4% of category share. The Big Belly Cup format reached CN¥ 970 million in sales, growing 49.4%, while the mother and baby sub-segment grew 24.9% against the trend of the wider category. We believe brands that position their products for a specific usage scenario or a specific group of consumers are better placed than those that compete on price alone.

Overall Market: Sales Under Pressure, With Signs of a Floor#

China's online cup and bottle industry recorded CN¥ 15.46 billion in rolling-year sales in Q3 2023^[1] and 320 million units sold, as the market adjusted after the pandemic. Sales revenue came under more pressure than volume, which was almost flat, and we believe this shows that average selling prices are being squeezed as more intense competition pushes brands toward discounting.

Monthly sales were at their weakest in January 2023 and then returned to growth from February to April 2023, at 19.4%, 11.3% and 14.3% year-on-year respectively, before coming under pressure again in mid-2023. We believe the improvement owes more to a return to normal comparison bases than to a recovery in underlying demand, although it does suggest that the market is approaching a stable floor.

Key implications for brands:

• The gap between revenue and volume suggests that the pressure on average selling prices is structural, so brands that depend on volume face the most pressure.
• The January low should be read as a seasonal pattern in the baseline and not as a structural signal, since sales recovered predictably through the spring.
• Premiumisation remains the most defensible strategy for established brands, because growth in higher-value sub-categories shows that consumers still trade up when a product has a convincing story.

Sub-category Performance: Insulated Bottles Are the Largest, Carafes Are Gaining#

Insulated bottles are the largest sub-category at CN¥ 6.57 billion, approximately 43% of total online market revenue.^[2] Glass cups rank second at CN¥ 2.26 billion (15%), followed by portable cups and mugs at approximately CN¥ 1.14 billion each (7% apiece). The insulated carafe sub-category, at CN¥ 1.08 billion, gained approximately 4% of category share, which is the most notable change in the category mix.

Insulated carafes take on the function of the traditional thermos flask while offering a more modern look and a larger capacity, so they are replacing older household thermoses with a higher-value product. For brands, we believe this is a route to premiumisation within a format that consumers already know and that has an appeal as a gift.

Insulated Bottle Concepts: Cold Retention and Ceramic Materials Lead Growth#

Within the insulated bottle segment, growth is uneven, with some established concepts under pressure while several premium niches grow quickly.

Cold retention is the largest opportunity, at CN¥ 552 million with growth of 92% year-on-year, driven by summer outdoor activity and by demand for keeping drinks cold as well as hot. Products made of ceramic doubled year-on-year (+100%) to CN¥ 300 million, which reflects consumer demand for safer, chemically inert materials, and titanium products grew 27% to CN¥ 205 million along the same path of premiumisation.

The compact design, smart digital display and outdoor concepts came under pressure over the year. The smart display concept shows that consumer interest in novelty features has limits when the underlying product does not improve to the same degree. The magnetic bullet concept, despite its very small scale (CN¥ 4.3 million), grew 7,736% as an innovative tea compartment design gained early traction.

For product development teams, we see three priority areas for investment: cold retention technology for the summer market, ceramic and titanium materials for premiumisation, and new dispensing mechanisms, such as magnetic suction and thread-free opening, that make bottles more convenient to use.

Big Belly Cups: CN¥ 970 Million and Seasonal Maturity#

Big Belly Cups, large-capacity plastic bottles of one litre or more, moved from a novelty trend to an established seasonal category in Q3 2023. The format reached CN¥ 970 million in sales over the June 2022 to May 2023 period, with 15.741 million units sold and growth of 49.4% year-on-year. Summer is the natural peak season, since the bottles are mostly plastic and not insulated.

Sales peaked at CN¥ 123.5 million in June 2022 and, after the winter months, recovered to CN¥ 73.7 million by May 2023, which we believe reflects predictable seasonality and not an exhausted trend. The core consumer is female, aged 26-35, and mainly interested in food, beauty and fashion content, and women account for 75.4% of the Big Belly Cup social media audience.

Brands in the format are positioned at different price tiers, with Xile (希乐) at the value end, vanow at the premium end and Fuguang (富光) between them. Fuguang's bestselling product is a 1,000ml bottle with a 316L stainless steel inner liner, a choice of colours and a shoulder strap.

Travel is the most mentioned Big Belly Cup usage scenario, at a 22.5% consumer mention rate, nearly double the fitness scenario in second place at 11.6%. We believe this shows that the product's core value lies in holding as much water as possible in a single portable bottle for people with active lifestyles.

Mother and Baby Segment: Growth of 24.9% Against the Trend#

The mother and baby insulated bottle segment reached CN¥ 60 million in the rolling year to August 2023, growing 24.9% year-on-year while the wider market came under pressure. The segment peaks from September to November, during the back-to-school and holiday promotional period, and reached CN¥ 8.18 million in November 2022 with 111,733 units sold.

We believe the segment's growth shows that products designed for a specific group of consumers can command higher prices and hold their demand in a way that mass-market products cannot. Innovations in the bestselling products include bite-resistant soft silicone straws, anti-choke direct-drink spouts, lids that change colour with temperature, and SUS316 inner liners with food-grade material certifications.

The segment's success points to similar opportunities among other groups of consumers whose needs are not yet well served:

• Drivers needing one-hand open bottles that do not obstruct their view
• Esports gamers needing grab-and-drink designs for quick hydration
• Professional women valuing lipstick-proof rims
• The elderly requiring easy-grip and easy-open mechanisms

New Product Innovation Opportunities#

Three product directions are, we believe, open opportunities where consumer demand exists and supply is still limited.

Spray cooling integration: Li-Ning (李宁) has tested the spray water bottle concept, which is still small but showed early demand.

Blender integration: Thermos (膳魔师) launched a wireless blender chug barrel that combines the preparation of smoothies and protein shakes with portable hydration, a format that appeals to health-conscious consumers who want one product for both.

Cup-bag hybrid: The Holoholo brand launched its bag-cup in March 2023, and consumers cited its novel appearance and its portability as the main reasons for buying it.

In appearance, the main directions of innovation are new product shapes such as bear-shaped designs, changes to strap orientation so that the bottle swings less, and silicone bodies that allow large-capacity cups to fold.

Key Takeaways#

• China's online water bottle market totalled CN¥ 15.46 billion in the rolling year to August 2023 on two leading Chinese marketplaces. Sales came under pressure, but monthly sales returned to growth in the spring of 2023, which suggests the market is approaching a stable floor.
• Cold retention insulated bottles grew 92% year-on-year to CN¥ 552 million, the fastest growth among the concepts of meaningful scale, driven by summer use and by demand for keeping drinks cold as well as hot.
• Insulated carafes gained approximately 4% of category share, as consumers trade up from traditional thermoses to better-looking household alternatives.
• Big Belly Cups generated CN¥ 970 million, growing 49.4% year-on-year, and have moved from novelty to seasonal staple, with women aged 26-35 as the core consumers and travel as the main usage scenario.
• The mother and baby sub-segment grew 24.9% against the trend of the wider market, which we believe supports investment in products designed for specific groups of consumers as a way to protect margins.
• IP co-branded insulated bottles grew 14% to CN¥ 101.8 million, faster than the overall category, which suggests that partnerships with intellectual property owners can lift sales whatever the conditions in the wider market.

About the Data#

This analysis draws on Moojing Market Intelligence data covering Q3 2023. Moojing analyses brand and category performance across major Chinese e-commerce platforms. E-commerce data in this article covers two leading Chinese marketplaces for the rolling twelve-month period June 2022 to August 2023, and social listening data covers leading Chinese social platforms. For full methodology and additional insights, see the complete Water Bottle Brand IP whitepaper.