Market Overview

The water delivery service market size for FY2018 based on end-user price continued expanding to reach 138,500 million yen, 104.1% of that of the preceding fiscal year. The rapid market growth, exceeding the growth level of mineral water market, stems from the Great East Japan Earthquake occurred during the growth period of the market, which multiplied the demand for water delivery. CAGR of the market during the five years between FY2009 to FY2013, which include 2011 when the Great East Japan Earthquake struck, expanded to 17.0%. Although CAGR between FY2014 to FY2018 declined to 6.3%, the market size expanded to 2.5 times larger during the past 10 years.

While the rapid growth was triggered by consumers’ rising intention to stock up on bottled water and by the concerns over tap water in the aftermath of the Great Earthquake, the selling points such as availability of both warm and cold water from a water server and convenience of heavy water bottles being delivered, different from the mineral water business, led the business models of water delivery services to successfully match the demand and to take root in daily lives.

Noteworthy Topics

Experience of Utilizing Water Delivery Service by Consumers

In the research to 25,000 men and women in the ages between 20s and 50s or older, regarding whether or not they have any experience of using a water delivery service, while those who answered “currently using the service” accounted for 5.8%, those who responded “have used the service, but not anymore” accounted for 7.3%. The result showed that former and current users of the service accounted for 13.1%. On the other hand, those replied that “no experience of using the service because of no knowledge of the water delivery service,” occupied 19.0%. It is a challenge for the service providers to increase awareness of the service to such consumer segments.  

Future Outlook

Although the growth rate of water delivery business is said to be slowing down, the market is projected to grow for the time being by approaching the areas where the service is still unknown to, such as local cities, or by acquiring new customers including the elderly. On the other hand, the water delivery service market has entered the new phase as the market environment turned for the worse to require cost reduction and as the system of last mile logistics & delivery stabilized. Some service providers have started suffering from customer decrease, without any solutions to keep their subscribers from discontinuing the service.

In recent years, new market entry has been limited to exceedingly small number of companies, with even some withdrawals observed. With more companies may be forced to withdraw from the water delivery business or may become specialized in delivering either returnable or unreturnable bottles or in B2B, the number of service providers are projected to be narrowing down.  

Research Outline