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Interface News Reporter | Ma Yue

Interface News Editor | Xu Yue

Leading brands of electrolyte beverages are still stepping up their efforts to compete for the Chinese market.

According to the Tianjin Daily, the foundation stone of the "Pocari Sweat Aseptic Production Line" project of Tianjin Otsuka Beverage Co., Ltd. was laid in Tianjin Economic Development Zone on August 8. Tianjin Otsuka Beverage Co., Ltd. is a Sino-Japanese joint venture established by Tianjin Bohai Light Industry Investment Group Co., Ltd., Japan Otsuka Pharmaceutical Co., Ltd., and Otsuka (China) Investment Co., Ltd. It was established on September 6, 2002. After it was put into production in 2003, it brought the electrolyte beverage Pocari Sweat to the Chinese market.

Pocari Sweat was founded in Japan in 1980 and has entered the Chinese market for more than 20 years. It previously built two factories in Tianjin and Guangdong to develop the northern and southern markets respectively.

The main products of the Tianjin factory are electrolyte drinks POCARI SWEAT 350ml bottles, 500ml bottles, 900ml bottles and electrolyte solid drinks, which are mainly sold to China and the Middle East.

In the past few years, due to the expansion of the market, the company has also continued to expand its production capacity in China. In 2014, Tianjin Otsuka Beverage Co., Ltd. began to expand the second phase of the factory, and after completion and production, the production capacity increased by about 3 times.

The newly invested aseptic production line is Otsuka Pharmaceutical's first aseptic production line in China outside of Japan. It covers an area of ​​about 30,000 square meters and is expected to achieve commercial production in 2026. After the production line is put into use, the annual production capacity is expected to increase by another 2.5 times.

Behind Pocari Sweat's expansion of production capacity is the sudden explosion of the electrolyte water market in recent years.

Although it has entered the Chinese market for more than 20 years, this Japanese brand has been relatively low-key for a long time, largely because of its niche category, mostly existing in some sports and fitness scenes. One of the most direct driving factors for the outbreak of electrolyte water in China is the increased awareness brought about by the epidemic - especially in December 2022, electrolyte water completed a rapid market education and also ushered in a substantial increase in demand.

According to the "2023 China Electrolyte Beverage Industry Market Insight Report" released by the Forward Industry Research Institute, the electrolyte beverage market size will increase by 50.1% year-on-year to 2.7 billion yuan in 2022. This makes electrolyte beverages the beverage category with the highest year-on-year growth in the Chinese beverage industry in 2022.

However, there is no unified and clear definition of electrolyte water. The function of electrolytes is to maintain the body's fluid balance, help quickly replenish water, maintain motor function, and promote metabolism. Timely replenishment of electrolytes helps maintain human functions. Generally speaking, the word "electrolyte" is clearly marked on the packaging of electrolyte drinks, and the formula contains trace elements such as sodium, potassium, calcium, magnesium, and water-soluble vitamins.

Before electrolyte water became popular, sports drinks were more common on the market, such as brands like Pulse, which generally contain carbohydrates such as sugar and other nutrients.

Just like Suntory's oolong tea took its place early and waited for the sugar-free tea trend in China, although Pocari Sweat got in first, it also welcomed more fierce new competitors after the market expanded.

The popularity of the electrolyte water concept has also prompted brands that previously entered the market with sports drinks, vitamin water or functional drinks to begin strengthening the concept of electrolytes in their new products.

For example, Dongpeng Beverage, which mainly produces functional beverages, launched the electrolyte beverage "Bu Shui La" in early 2023. In the 2023 annual report, the company listed electrolyte beverages together with tea beverages, premixed wines, ready-to-drink coffee and other categories as part of the strategic framework of the second development curve.

Uni-President's Haizhiyan also revived with the help of the electrolyte concept. Haizhiyan entered the market with "sea salt fruit drink" in 2014, but gradually faded out of the market later. It was not until after 2022 that Uni-President implemented a restart strategy for Haizhiyan, completing the transformation from light fruit drink to electrolyte drink, and continued to update the taste in 2024.

From the perspective of the entire market structure, Pocari Sweat ranks high, but is still lower than Yuanqi Forest's Alien - according to the report of the Forward-looking Industry Research Institute, in the Chinese electrolyte beverage market in 2022, Alien ranked first with a share of 47.0%; Pocari Sweat ranked second with a share of 23.8%, and Nongfu Spring's Scream (isotonic version) ranked third with a share of 16.5%.

Offline retail monitoring network Mashangying also mentioned in a report that with the outbreak of the electrolyte beverage track in December 2022, Alien Electrolyte Water's market share in sports drinks once reached 50%, and Pocari Sweat also had a "leapfrog growth"; after the epidemic, Alien Electrolyte Water's share has not fluctuated much, but the gap with the second-ranked Pocari Sweat has also been stably formed.

Judging from the competition direction of various brands in electrolyte water, strengthening sports and hydration scenarios, large packaging and cost-effectiveness have become trends.

From this perspective, Pocari Sweat's actions in the Chinese market do not seem to be so flexible and varied.

In terms of product taste and formula, there are not many changes; in terms of price, the retail price of 900ml is 9.5 yuan, which is at a higher price range.

Although Pocari Sweat has accumulated more brand awareness by entering the Chinese market earlier, local brands still have more advantages in terms of marketing and accumulation of downstream channel resources. In addition to expanding production capacity, this Japanese brand still needs to constantly make insights and adjustments in the face of changes in the Chinese market.