Xin Ou
Research expert covering Greater China
Non-alcoholic beverages in China - statistics & facts
China’s vast population has made it the world's second-largest non-alcoholic beverage market. In this country, the term “non-alcoholic beverages” often refers to prepackaged drinks with an ethanol content of less than 0.5 percent, covering a wide range of products, including bottled water, carbonated drinks, juices, and more. While fizzy drinks hold the position of the second most popular liquid refreshment beverage (LRB) globally, they face challenges in attaining a similar status within the Chinese market, where bottled water remains dominant.
In addition, rising health awareness and the recent boom in the sports industry have fueled the growth of the Chinese functional drink market, with its market size exceeding 121 billion yuan in 2023. Recently, herbal tea made from ingredients believed to have health benefits are revolutionizing the RTD tea drink market, while plant-based milk alternatives are gaining widespread popularity. The future direction of the market, driven by growing health concerns, remains to be seen.
An ever-diversifying market
Accounting for nearly 90 percent of the Chinese ready-to-drink (RTD) non-alcoholic beverages market, carbonated drinks were the dominant product until the mid-1990s, when bottled water emerged in response to water quality concerns, and rapidly gained prominence. The packaged water segment is highly concentrated, with the two leading companies capturing over 40 percent of the market. Since the 2000s, RTD tea drinks have steadily gained traction, further eroding the market share of fizzy drinks, realizing a retail sales value of over 143 billion yuan in 2023. Considering the growing popularity of bottled tea beverages, leading beverage companies have introduced their own product lines, with Nongfu Spring achieving the greatest success.How rising health concerns are changing the landscape
The currently tepid soft drink market in China may be due to growing health consciousness. While the incidence of diabetes and overweight increased over time, a trend encouraging people to eat a balanced diet spread throughout the nation. In light of this, many beverage companies have launched sugar-free or low-sugar alternatives. Notably, zero-sugar fizzy drinks appear to be less appealing to Chinese consumers compared to sugar-free tea beverages, as in the first quarter of 2024, sugar-free tea drinks recorded a significant year-over-year increase in retail sales, making up nearly 40 percent of the market.In addition, rising health awareness and the recent boom in the sports industry have fueled the growth of the Chinese functional drink market, with its market size exceeding 121 billion yuan in 2023. Recently, herbal tea made from ingredients believed to have health benefits are revolutionizing the RTD tea drink market, while plant-based milk alternatives are gaining widespread popularity. The future direction of the market, driven by growing health concerns, remains to be seen.
