Guizhou unifying water businesses to back up small firms

China's water-rich Guizhou province is consolidating local drinking water businesses under one roof by launching a unified brand - Colorful Guizhou - for marketing purposes.

The province expects these operations to bring more synergy and cohesiveness to the relevant companies and boost their earnings.

Such moves are part of the provincial government's efforts to further develop the local drinking water industry to take up a larger national market share and make it a driving force of the province's economic growth.

"We have abundant natural drinkable water reserves, of which the size ranks top in the country. About 80 percent of our ground water reserves are good for health due to multiple minerals they contain which are part of our advantages," Ao Hong, deputy head of the department of industry and information technology of Guizhou, said at a recent forum.

In 2018, Guizhou's natural drinkable water reserves hit 5.37 million metric tons, ranking third across China, data from the department of industry and information technology of Guizhou showed.

"However, our drinking water companies are facing great challenges attracting buyers from the domestic market due to relatively weak brand influence," Ao said. "We consider the unified brand strategy an effective way to enhance national competitiveness for our drinking water businesses."

Though Guizhou is rich in natural drinkable water reserves, the province's bottled water production accounts for merely 6.2 percent of the nation's total, which was 82.82 million tons in 2018.

Xiao Ming, deputy head and chief secretary of the Natural Drinking Water Industry Association in Guizhou, attributed the reason why Guizhou drinking water industry lacks national market presence to its lack of enough established brands.

Xiao explained that among Guizhou's over 800 drinking water companies, only a few, like Guizhou Polar Bear Industry, had annual revenue exceeding 100 million yuan ($14.3 million). A total of 47 exceed 20 million yuan each, making up 5 percent of the total in the province, while 80 percent of the producers had annual revenue lower than 5 million yuan each.

Li Changfa, head of Zunyi Huishangu, a Guizhou-based bottled water company which specializes in producing water with rich strontium minerals, said marketing and sales form part of the challenges that many small-and medium-sized companies are facing.

"Many small-and medium-sized drinking water companies can't afford to spend much on advertising," Li said. "That's why developing a unified brand for the drinking water businesses in Guizhou is beneficial, especially to them. The strategy will help them raise market influence and boost sales."

Li said due to the local government's supportive policies, his company is on a fast track toward generating growth.

Founded in 2014, the company saw its annual output exceed 20 million yuan in 2017 and predicted its industrial output will hit 100 million yuan this year.

"Aside from raising brand influence for small - and medium-sized drinking water companies, the Guizhou government also provides technology and financial support, and is accelerating the progress to standardize quality checks for bottled drinking water," Ao said.