Focus On Excellence, Aggressive Branding Clearly Makes A Difference

MANILA, Philippines – From a single store more than a decade ago to a store network that spans the entire country, the story of Aquabest shows what a focus on excellence and aggressive branding can do.

The story of Aquabest begins in 1997, when Carson Tan and a group of friends decided to enter the fledgling water refilling industry with a single store called Bestlife in Diliman. At the time, the deteriorating water supply in Metro Manila caused bottled water to be popular among the well-off who could afford it. Things were good at the start as purified water then were considered a status symbol.

Eventually vigorous and increased demand for clean potable water allowed the industry to experience strong growth causing the number of stores to swell drastically. Overnight, there was a water store in every corner leading to intense competition as everyone fought over the same customers. This growth continues to this day with the Department of Trade and Industry (DTI) estimating that there are around 20,000 water-refilling stations in the country.

However, a combination of increased competition and mismanagement soon drove the company to the brink of bankruptcy. While the other partners wanted to give up, Tan and Neil Delgado his fellow partner and currently the company’s general manager thought otherwise. Believing in both the company and the prospects of the water industry, he raised a million pesos and bought out the other partners in order to reorganize the company.

Turning around the company was easier said than done as most of the million pesos raised went to paying off creditors. “We had to immediately pay P750,000 to our creditors because if we didn’t we couldn’t get the needed supplies. So you can imagine the difficulty of running a company with only P250,000 in operating capital,” says Tan adding that he literally had to start with nothing in the office except two tables and a skeleton workforce.

From this near death experience, Tan and Delgado turned the company now known as GQWEST Inc. around into a powerhouse in the water franchising industry. Tan attributed the company’s success to Quality, Service, Value, and Technology (QSVT). Proof of this is the company’s ISO 9001 certification it received from Bureau Veritas. The ISO certification is given to companies who comply with globally recognized business best practices. To date they are the only water franchise in the country to receive this certification.

This success is a testament to their efforts to reengineer the company to become a service and quality oriented enterprise that utilizes advanced technology to offer the best value for their franchisees and clients. Investing in technology he says increased their costs initially but eventually created savings and increased revenue in the long term.

Realizing that different socio economic classes have differing needs, they have created several brands that cater to different market segments. Its flagship brand Aquabest serves customers from the B and C classes, Aquaquest is for the C and D markets and Aquaspree, for those from the D and E classes. This emphasis on niching and developing strong brands has allowed the company to grow at a rate of 100 new stores a year.

Tan says that there is still much room for growth in the sector particularly in the rural areas. “There are many unserved markets, about 12 million Filipinos in rural areas still don’t have access to clean water, so their water sources are still very crude, like deep wells,” he said.

Apart from innovation in its business processes, the company also applies a slightly different approach to franchising. Unlike other franchises, they don’t collect franchise fees or royalty fees, but rather flat and minimal monthly dues which include free marketing and tri-media exposure, uniforms, streamers, and filters.

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