Flowing well from roof of the world

Tibet 5100 has the highest altitude bottled water production line in the world.

Since Evian became the first company to begin bottling water in China in 1986, the industry has witnessed rapid development.

Wahaha and Nongfu are among the most widely recognized bottled waters in China today.

A 330 ml bottle of Tibet 5100's mineral water costs 7.5 yuan ($1.20; 0.92 euro) retail, about five times the price of a 550 ml bottle from a non-premium company, but still less than the price of Evian.

According to market research firm Euromonitor International, in 2011 Tibet 5100 had captured a 26.9 percent share of China's premium bottled mineral water market, making it a leading brand.

From 2008 to 2011, the company's compound annual growth rate in terms of income was 74 percent, while its net profit CAGR was 215 percent.

"Our strategy focuses on penetrating institutional sales channels, an approach which distinguishes us from the competition," Fu says.

In 2007, Tibet 5100 signed a strategic contract with China Railway Express, a State-owned transportation company affiliated with the Ministry of Railways. The contract gave 5100 Tibet access to the high-speed train market and was decisive in its commercial success.

In 2010, water sold to China Railway Express accounted for 81 percent of Tibet 5100's revenue.

While landing a major client was good for company revenue, experts have said that relying so heavily on one client also poses a risk.

The management of Tibet 5100 know this and have moved to land other institutional clients, whose base and sales have continued to grow, covering Air China, China Railway Express, China Post, BP-Petro, Sinopec, ICBC International and CCB International.In its 2012 semiannual report, Tibet 5100 says its reliance on China Railway was reduced to 27 percent.

The company has also taken other steps to diversify its sales base.

"Based on powerful logistics systems covering 48 cities nationwide, Tibet 5100 has created a water card service unique to China," Fu says.

The water card is a prepaid voucher used to buy the company's bottled water. Customers dial a national hotline and bottled water is delivered to an appointed place within 48 hours.

The company has also expanded its institutional client base by sponsoring government and business activities, such as the HSBC International Golf Championship, the China Tennis Open, the World Economic Forum and the World Expo in Shanghai.

"In April, we also partnered with some Internet malls, including Amazon, to start online sales of the water card, in order to further explore business-to-consumer channels and provide premium clients with a more convenient service," Fu says.

According to its latest financial report, Tibet 5100's revenues in 2011 were 633 million yuan, up 76 percent from the previous year.

Despite the company's rapid growth, it remains a challenge to create brand recognition. But Fu believes the situation will improve.

"Our water comes from a pure and rare glacier spring in Tibet, which is attractive to the global market," he says.

According to Euromonitor, the capacity of China's premium bottled mineral water market will continue to grow between 2012 and 2016, with a CAGR of 14 percent.

"We hope Tibet 5100 can be part of the international premium mineral water market and establish itself as a world-famous brand," Fu says.

zhangchunyan@chinadaily.com.cn