In recent years, with the increasing frequency of air, water, and soil pollution, the environmental protection industry has seen significant growth. The government has been actively promoting various action plans, such as the "Water Ten," "Air Ten," and "Ten Measures," each of which represents a trillion-dollar market opportunity. As a result, many people consider the environmental protection sector to be a promising sunrise industry with vast potential—often referred to as a "blue ocean." Driven by this perception, numerous domestic companies have entered the field in pursuit of its economic opportunities.
Wen Yibo, the leader of China's environmental protection industry and chairman of Sander Group, has highlighted the current investment boom and development trends in the sector. He once remarked that the environmental protection industry is both a "blue ocean" and a "red sea." If new technologies and innovative business models emerge, it remains a blue ocean; otherwise, it turns into a red sea filled with fierce competition and limited profitability.
For example:
1. **Sewage Treatment**
Currently, the price for treating one ton of sewage has dropped from 5 yuan to as low as 2, 1, or even just a few cents. This price is not sufficient to cover daily operational costs, let alone depreciation, maintenance, and repairs. Some companies enter the market with a strategy of occupying space and accepting losses, believing they will eventually turn a profit. However, without real revenue streams, these businesses struggle to survive. Governments have also come to expect such low prices, which harms the entire industry by distorting market rules and creating unfair competition.
2. **Desalination**
The global average cost for seawater desalination is over $1 per cubic meter, including construction and operation. Yet, some companies in China have managed to bring the price below 4 yuan. Given the high initial investment required, such low pricing barely covers operational costs, making it nearly impossible for the industry to sustain itself without long-term financial returns.
This trend is not unique to these two sectors—it’s evident across the broader environmental protection industry. So, is the water purification market, a key part of this industry, truly safe?
According to incomplete statistics, by the end of 2016, China had more than 3,000 water purification brands. Data from Aowei.com showed that the retail volume of water purifiers reached 10.3 billion yuan in the first half of 2017, marking a year-on-year increase of 30.6%. With such strong growth potential, many companies have rushed into the market, leading to severe overcrowding and confusion.
On one hand, the market lacks clear and consistent standards. Corporate, industry, and international standards are often conflicting, leading to misleading advertising and poor product quality. On the other hand, many water purifier companies lack the resources and manpower to provide proper after-sales service, further damaging consumer trust.
From both a business and consumer perspective, the water purification market has fallen into a "chicken dilemma"—where no one wants to take the first step, but everyone expects others to lead. To move forward, the industry must address these challenges head-on.
Chinese independent water purifier brands need to work harder in their future development. Only through continuous innovation, brand building, and differentiation can they establish a solid position in the market and ensure sustainable growth. The path ahead is challenging, but with the right strategies, the water purification industry can thrive and fulfill its true potential.
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