# Yibao's midlife crisis By [Janice](https://paragraph.com/@janice-18) · 2022-05-12 --- At present, this news has not been officially confirmed. If Yibao is successfully listed, it will become the “second share of drinking water” in China after nongnongshan spring. Editor’s note: This article is from bohufn, a wechat official account. The author is Ling Ling. It is reproduced by chuangyebang with authorization. Recently, it is reported that China Resources Yibao beverage (China) Co., Ltd. (hereinafter referred to as “China Resources Yibao”) will go to Hong Kong for IPO as early as next year, with a financing scale of US $1 billion. According to sources, the discussion is still at an early stage, and the details of IPO such as scale or timing may change. At present, this news has not been officially confirmed. If Yibao is successfully listed, it will become the “second share of drinking water” in China after nongnongshan spring. In 1990, China longhuan Co., Ltd., the predecessor of China Resources Yibao, was located in Shenzhen, the city of reform and opening up, and took the lead in introducing the concept of packaged water from Hong Kong. At that time, longhuan company hired a Hong Kong design company to carry out packaging design. The brand name on the bottle appears in black traditional Chinese character “Yiyi”, and adopts French C’estbon meaning “beautiful”, echoing the brand name of “Yiyi”. However, the development of “Yiyi” is not smooth. It is reported that it once faced the dilemma of operating difficulties at the beginning of its launch. By the end of 1991, Yibao ushered in its first turnaround. When huanke became the controlling shareholder of China Vanke, it became 51%. With the “big change” of management, the original strategy and business have also been adjusted. Finally, through the introduction of advanced purified water production equipment from abroad, Yibao began to produce and sell purified water, and the situation has also improved. However, the good times did not last long. In 1996, the competition in the domestic drinking water market intensified, and Yibao’s profit space was compressed. At this time, Vanke closed, stopped, merged and transferred its subordinate non core enterprises, and Yibao became one of the stripped enterprises. This is the second turnaround for Yibao - the acquisition of Yibao by China Resources is also an important opportunity to affect its future development. Under the running in between China Resources Yibao and the third-party design team, Yibao completed the brand-new brand image upgrading in 2001, which is the familiar “green bottle”. In 2004, Yibao made clear its own position and wanted to be a national professional drinking water company. By 2006, Yibao had become the leader in the packaging water market in Guangdong. The following year, Yibao officially launched the expansion strategy of “westward advance, Northern Expedition and eastward expansion”. With professional purified water positioning, recognizable packaging image and strong distribution channels, Yibao soon ranked first in the national market. By 2015, Yibao’s turnover exceeded 10 billion, with a five-year compound growth rate of about 40%, and its market share increased to 17.1%, temporarily surpassing nongnongshan spring to the top in China. According to the social responsibility report released by China Resources Yibao, from 2014 to 2018, the company’s revenue climbed from 7.855 billion yuan to 10.435 billion yuan respectively, showing a continuous increasing trend. However, the data of 2019 fell for the first time in five years, with a revenue of 10.396 billion yuan, a slight decrease of 0.3% year-on-year in 2018. At present, Yibao has a market share of 21.3% in the domestic bottled water market, ranking second. Nongnongshan spring ranks first, with a market share of 26.5%. Master Kang, Wahaha, Baisui mountain, binglu brand and other brands account for 10% or less. In fact, Yibao, who focuses on “selling water”, has more ambitions than “selling water”. Another development strategy of Yibao is to gradually expand from a single drinking water product to a variety of beverages such as tea, milk tea, coffee and lactic acid bacteria. As early as 2011, China Resources Yibao cooperated with Kirin of Japan to launch a multi category beverage business strategy. In 2017, the focus shifted to “non-aqueous” drinks. By the end of 2020, Cr Yibao has sold 35 water drinks, covering 8 categories such as purified water, milk tea and coffee. It has 9 private brands such as “Yibao”, “Jialinshan”, “magic”, “small main bacteria” and “grape holiday”. However, the development of new business is not optimistic. From 2017 to 2019, the sales of new products of China Resources Yibao were 61.4128 million yuan, 86.7104 million yuan and 252 million yuan respectively, accounting for very little of the total revenue. The development of multiple categories for nearly a decade has not changed the single image of purified water in the hearts of consumers. Today, the beverage “can’t stand it”, but the crisis of purified water has come first. For a long time, there have been many disputes about the health of drinking purified water, although there is still no definite conclusion to prove that drinking purified water is unhealthy. However, relevant research reports have pointed out that the market demand for purified water will be reduced, whether for “congenital reasons” or the demand for consumption upgrading the day after tomorrow. According to the Research Report of Zhongtai securities, the total terminal sales volume of China’s packaged drinking water market is about 240 billion yuan. It is expected that the proportion of purified water will accelerate the decline in the future, and the upgrading trend from purified water to natural water is clear. Players in the pure water track have made some moves. In 2020, Nestle transferred the purified water business “Youhuo” to Tsingtao Beer Group, and decided to focus on the high-priced water and water with higher profits. Earlier in 2019, Danone, another multinational food company, also stopped the production and sales of Yili bottled purified water. Danone China said that in order to adapt to the rapid changes in China’s local market, the company stopped producing and selling Yili brand bottled water, but Yili bucket water business and other brands of Danone China were not affected. Yibao, which takes purified water as the basis for survival, obviously encountered no small problem. On January 26 this year, a photo of Yibao’s high-end mineral water “dew” flowed out of the circle of friends, which means that Yibao has made great efforts in high-end mineral water for the first time since it launched purified water in 1990. According to the official introduction of Yibao, Yibao dew is mined from the deep underground. After long-time natural filtration and solution filtration of rock strata, the water contains a variety of natural mineral elements. Now, this product is available for sale. Bohu finance found through Yibao tmall flagship store that the price of 12 bottles of 350ml Yibao dew is 180 yuan, and the monthly sales volume is 11. It’s not hard to see that Yibao is a little flustered. In 2021, in just two months, Yibao successively announced four new projects: new water production bases in South China, East China and Northeast China, with a total investment of more than 6 billion yuan. On September 29, 2021, Yibao and Chang --- *Originally published on [Janice](https://paragraph.com/@janice-18/yibao-s-midlife-crisis)*