In recent years, with the increasing frequency of air, water, and soil pollution, the environmental protection industry has experienced significant growth. The government has introduced various action plans, such as the "Water Ten" and "Air Ten" policies, which are all part of a trillion-dollar industry. As a result, many people view the environmental protection sector as a promising sunrise industry with vast potential. This has attracted numerous domestic companies to enter the field, hoping to seize a share of this growing market.
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 can become a blue ocean — a space for growth and opportunity. However, without such breakthroughs, it risks turning into a red sea — a highly competitive and saturated market.
For example:
1. **Sewage Treatment**
Currently, the price of sewage treatment has dropped significantly, from 5 yuan per ton of water to as low as 2, 1, or even just a few cents. These prices are often insufficient to cover daily operational costs, let alone depreciation, maintenance, and repairs. Some companies have entered the market with a strategy of "occupying the pit," meaning they aim to secure a position even if they’re not profitable. Despite this, there are still firms continuing to operate at a loss. As a result, governments have come to expect such low pricing, which harms the entire industry by disrupting market rules and creating unfair competition.
2. **Desalination**
The international cost of seawater desalination averages over $1 per cubic meter, including construction and operation. However, some companies in China have managed to lower the price below 4 yuan. While the initial investment in desalination is high, this price only covers operating expenses, leaving no room for profit or reinvestment. Without financial returns, how can the industry sustain itself and continue to grow?
This trend is also evident in other areas of environmental protection. So, is the water purification market — a key part of the environmental protection industry — safe? According to incomplete statistics, by the end of 2016, the number of water purification brands in China had exceeded 3,000. Data from Aowei.com shows that the retail volume of water purifiers in the first half of 2017 reached 10.3 billion yuan, marking a year-on-year increase of 30.6%.
With such massive growth potential, the water purification market has drawn the attention of many companies, leading to an influx of players and a chaotic market environment. On one hand, there's confusion among corporate, industry, and foreign standards, with a lack of strong regulatory frameworks. This results in misleading advertising and inconsistent product quality. On the other hand, many water purifier companies have limited resources and struggle to maintain proper after-sales service. Whether from a business or consumer perspective, the water purification market has found itself in a "chicken dilemma" — where growth is constrained by instability.
Therefore, the water purification industry must address these challenges head-on. Chinese independent water purifier brands need to work harder in future development. Only through continuous innovation, brand building, and differentiation can they ensure long-term health and sustainability in this competitive market.
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