Demand of Chinese Market for Bottled Water Industry

This report explores the demand of the Chinese market for the bottled water industry and the opportunities it presents for Tasmanian Mountain Waters. It discusses the importance of conducting a PESTLE analysis to understand the legal, political, economic, social, cultural, and technological factors affecting the industry. The report provides recommendations for successful expansion in China.

PESTLE

Executive Summary
The report brings out the demand of Chinese market for bottle water industry. Renowned
company Tasmanian wants to expand its business in china because it finds the market for
Tasmanian. The company undertakes different aspects of to expand the market effectively. In
order to execute the establishment, it is important for the company to conduct a market
research. The company needs to conduct a PESTEL analysis for researching. At the initial
stage of the report, it gives an overview of the company “Tasmanian” avails the customers
the natural water of mountains. In the further sections, the management has to conduct an
effective research through PESTLE analysis of the company to acknowledge and comply
with the demand and align the rules and legal system of China. At last, various, various
recommendations have been made for better growth of China. The report will assist the
company to undertake the demanding customers market that will affect the economy of
China.

Contents
Executive Summary...............................................................................................................................1
Introduction of the company.................................................................................................................3
Legal and Political environmental analysis............................................................................................3
Economic analysis..................................................................................................................................5
Social and cultural environment analysis..............................................................................................6
Technological environment analysis......................................................................................................7
Conclusion and recommendation..........................................................................................................8
References...........................................................................................................................................10

Introduction of the company
Tasmanian Mountain Waters is renowned as Natural Spring Water that consists a consistent
proportion of natural calcium, essential minerals, Magnesium, and phosphorus with best pH
level. This product is available in quantity cans of nearly five to ten litres, which are also
convenient for household purposes. Recently the company has a partnered with a Chinese
distribution business known as “MrBigBoat” regulated by Mr Jones and Jasmine Ling.
Tasmanian Mountains is a bottle water industry that generates revenue of approximately $700
million per year in Australia. Tasmanian Waters is recognised under an island, which is
partially occupied by Indigenous people before the colonial period. This avail the customers
with the natural and fresh mountain water for long time without depending on other artificial
water resources. As per the company`s information, it is found that a 10 litre cask and can is
suitable for long term that should be used in recent two years of manufacturing. It does not
provide water directly, it use water pipelines that takes and carries raw water from the
mountains and filter it many times then finally serves it to final customers. This industry can
serve the Chinese customers by exporting and transferring the water bottles. Therefore, it can
serve many different opportunities to the customers if it will be able in china as a business
setup. This industry will help to reduce the water impurities. In addition to this, it is reported
in the industry statement that Tasmania is planning to invest approximately $1 million for
equipment and employing more staff that can meet the demand of the people (onlytasmania,
2018).
Legal and Political environmental analysis
The legal and political factors of China affects the entry and establishment of the organisation
there. To enter the Chinese market, it is important to consider and understand the legal and
political conditions of China that will be feasible for establishing Tasmanian Mountain
waters. From the country`s report, it is revealed that China`s surrounding lacks openness. Due

to stable legal and political environmental conditions of china, economical availability of
labour and improved infrastructure, China proves to be best country to investment (china-
briefing, 2015). Tasmania will face less political threat while entering Chinese market. Apart
from this, it is figured out that demand of fresh and purified water can boost the country`s
growth rather the problems occurred due to restructuring executed by Communist
government. With the increasing ability of strong political conditions, it is found that China
had the largest reserve of foreign currency. The Chinese government is concerned with the
increasing number of emerging and growing industries that can ultimately create
opportunities. Apart from advantages, challenges associated with political system with
Chinese market can become a threat to Tasmania existence. When moving to china, it is
important to treat the lack of openness as an important factor and research well all the
political factors that will directly and indirectly affect the business of bottled water
(Santander, 2018).
Although the country has made various modifications recently in their laws which mention a
level of chemical fluid used in manufacturing the water bottles. The economy is emerging
stronger and bigger in terms of encouraging FDI in country. Chinese people are becoming
more visible to western culture. With the increasing pace of urbanization, government of
china has made various laws to create the awareness among the enterprises regarding the
health of people (Matus et al., 2012). Food safety authorities have imposed several standards
for the bottle industry. Bottled water has fetched the attention of public especially when it
was recognised as the biggest producer by using government`s water standards for water.
Industries of Bottled water has to adopt the water standards that are inclusive of many
national standards. Gradually, China has imposed nearly 5000 standards especially for food
quality and its hygiene formulated by governmental departments (Gilmore, 2011). Moreover,
the government necessitates the labelling the information of material used in producing the

bottled water in China. It requires proper labelling with the proof of what chemicals are being
used to purify the drinking water, which will be a straight differentiation between the mineral
water. The label will display the mineral that should be added during the processing of water.
Currently, customers easily can switch to other brand who provides them with healthy
drinking (water Oliver, 2017). It is important for the Tasmania water industry to consider the
demand of Chinese customers before thinking of establishing to that country. Various laws
undertaken by Chinese government regulate the industry of bottled water. Chinese
government plays an important role in Food and beverage industry that imposes patent law,
copyright law, trade market law, and anti-competition law. Chinese law state that the
packaging of bottle water should be in such a manner that has 3-D trademark (Li, 2011).
Economic analysis
From the company`s recent report, it can be found that bottle water always remained a
biggest market of water until 2021. It gives an opportunity to expand the wings in the
country. From the years 2001, to 2016, the data estimates that market of china for bottle
market will increase at the pace of 7.42 percent. The data reveals that the global market will
expand the production until 57,903 million litres (GlobalData, 2017b). By looking at the
estimated economic figures, it can understood that the industry will boom by initiating the
business in china. Apart from this, recent market research reveals that the disposable income
of Chinese people has been growing that ultimately reflects that the demand of bottled water
is likely to be increased. As per the marketing strategies of growing China, it states that
revenue generated from bottled water was around US$42,774M in 2018 (GlobalData, 2017a).
From the country`s economic report published, it is discovered that GDP of the country has
reached 165 percent of the corporate debt. The amount of household loan and debt is low and
the GDP of the country has reached 2575 in 2017. Mountain water industry has been growing
well in the country especially in terms of sales and consumption, which are likely to grow in

coming years. It is predicted that there is a greater opportunities for the companies to expand
the business of bottle water. In china, the bottled water industry`s turnover is approximately
90 million Yuan. The country`s population consumes approximately more than 69 billion of
volume. The increasing number of users clearly shows which can be great opportunity for the
Tasmania industry to expand accordingly in the country (Suo, 2015).
Social and cultural environment analysis
Social factors considers the taste and preferences of the customers while preferring the
geographic, cultural, and demographic factors. Preferences of Chinese customer in regards to
the consumption of purified bottled water has been increasing and growing at greater pace.
Customer preferences plays an important role in moving to any new country when expanding.
These days, the preferences of Chinese people has been turning towards health concerns.
Therefore, people prefer quality water. The demand ensures that this will remain the biggest
selling market of bottled water in china (Cheng, Shi, Adams, & Ma, 2010). Recent research
states that seventy-four percent of people pay attention to the capacity and material content of
beverage and food, which they have chosen for their consumption. It has also availed the
product on small packets either plastic or glass that can decisive impact on packaging choices
in the country. While moving to china, the Tasmania industry should start focusing on
packaging and its quality of bottled water and its quality is ensured once it establishes its
brand. The cost of non-alcoholic brands have been increasing and reached at the cost of
alcoholic drinks. Most people in china requires and demands bottled water in regular
consumption schedule. It has been noticed that people in china is addicted to bottle water
(Kaiman, 2014). Consumers between the ages of thirty-seven to fifty-five, people have
become highly sensitive while taking their meals due to which people move towards hygienic
water. Due to age factor and disease prone age, the demand of bottled mineral water has
increased in China. By undertaking and executing according to this factor, this industry can

succeed and get a market share in China. Health experts have suggested to increase the
consumption of mineral water as consuming alcoholic drinks can be harmful for the health
(Boland, 2007). The raising negative impact of alcoholic drinks have promoted the use of
mineral and bottled water in china. Middle-class consumers always remained a major
population to which this industry has to serve and these people contributed to the growth of
this industry by increased demand and disposable income. It was more effective when the
consumption expectation and standard of living became better. Domestic players have
already started increasing with the use of bottled water. When moving to China, Tasmania
had to conduct a research procedure through which it can establish its strategies and success
of local players (Hogan, 2017).
Technological environment analysis
Technology plays an important role when serving the consumers in the best manner.
Nevertheless, the cooperation and coordination achieved with the help of advertising,
promotional, and marketing activities cannot be avoided. All three activities can help to
execute the effective marketing of industrial product. The company can use personalised
videography to increase the market reach of the promotional activity (Food Bev, 2015).
Internet and television are undoubtedly best ways to reach the growing marketing channels
while achieving a considerable revenue and sales. The company need to expand its approach
through marketing of products and services, which will help it to set its product, separated
from its competitors. Innovation is an essential element that can promote one`s product. The
customers are moving towards those brands that provide bottled water in good quality with
perfect packaging (Lee, Olson, & Trimi, 2012). Industry can utilise innovative technology in
a manner to introduce bottle-packaged water in an attractive way to approach costumers. It is
important to use the automatic technology, which will ultimately improve the productivity.
This will enable the company to utilise the resources in an efficient manner. Apart from this,

it can be found that China is leader in technology and producing bulk due to large workforce.
It will ultimately utilise the technology in an effective manner (Ding, Shen, Liu, Covaci, &
Yang, 2015).
As the beverage industry is indulged in plastic. Various factors relating to environment has
greater impact on this industry as government imposes some restriction while using plastics
especially when it cannot be easily decomposed. It remains a growing concern for the
country, in order to reduce the usage and aware people in regards to environmental losses
occurred due to use of plastics. The government imposes penalty and fines if the company
does not operate environment friendly manner while manufacturing (Blucher, 2015). After
becoming more concerned of the environment, the company has achieved a sustainable
growth of nearly 10 percent. Before thinking of establishing the bottled water industry, the
company has to undertake and comply with all the environmental laws. The company
managed to maintain a sustainable strategy of development with the growing china`s
population and increasing demand of bottled water. Chinese government took various
initiatives to protect the environment and improve the living standards of people (Shapiro,
2016). When manufacturing the plastic bottles, the company uses harmful chemicals, which
ultimately pollute the environment. The company should be concerned when diverting the
wasteful products to any water body because it is important for Tasmania to eliminate the
harmful chemicals from the production activities. One`s the company fulfils the CSR
(corporate social responsibility), it will be able to expand the market growth in the country
(Shira, 2016).
Conclusion and recommendation
From the above discussion, it can be concluded that Tasmania mountain water industry is
based on availing pure and natural water to the customers. China remained a strong candidate
in bottled water business with increasing demand of the customers. Apart from this, it is

identified in the report that China is well acquaint with the technological factors. Apart from
this, people have become too much health conscious. Moreover, the increasing population of
37 to 57 demands mineral water especially in disease prone climate. Apart from this, the
company will undoubtedly face many challenges and problems. Almost from all the reports,
it can be found that bottled market industry can grow well in China. With the increasing
demand of mineral and bottled water, China has the ability to boost the industry in a
successful manner. From the reports, it is discovered that in the upcoming years, it will be
able to secure its considerable market share. Challenge is the lack of openness of
environment in the political system of China.
From the above all the challenges and reports, it can be recommended that Tasmania industry
should conduct a proper research procedure for the Chinese market with an aim to get
success. Moreover, the company can start using innovative technologies, which will
ultimately help the organisation to discharge the plastic and finally manage it in a proper way.
The company should comply with all the governmental rules and regulations that are imposed
on the manufacturing process. The Chinese laws ensure good quality and disposable of waste
material from these industries. The growing trend of minerial and bottled market in China can
create several opportunities for the organisations to expand and promote the new firms.

References
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