Test Rite Hopes to Double Business in Five Years

After staging a remarkable comeback in profit performance last year, the Test Rite Group, Taiwan's leading channel player for household wares, is looking forward to continued robust growth this year—and perhaps even doubling both sales and profits within five years, according to Tony Ho, chairman of the group.

In a recent exclusive interview with the Chinese-language Economic Daily News (EDN), sister publication of the Taiwan Economic News (TEN), Ho reported that the group recorded NT$33 billion (US$1.1 billion at NT$30:US$1) in consolidated revenue and over NT$1 in earnings per share in 2010. The earnings-per-share figure is triple that of 2009, returning to the level prior to the financial tsunami. In addition to the economic upturn, Ho attributed his group's remarkable performance to the benefits of a recent organizational shakeup.

Ho predicted that sales of the group's retail business in Taiwan will grow 13% to NT$17 billion (US$567 million) this year, driven mainly by an accelerated transformation toward the home-improvement business.

The transformation kicked off late last year with the opening of two small home-improvement service outlets in New Taipei City's Zhonghe District, which have performed much better than expected. Encouraged by that good start, the company will open 30-50 similar outlets, sized 30-50 pings (one ping equals 36 square feet) each, in Greater Taipei this year. The outlets will offer not only household items but also household plumbing, electrical, gas, door lock, and toilet repair services, among others.

To sustain growth in the future, the group will also step up efforts to develop the huge Chinese market, where it now operates 27 outlets that generated total revenues of 640 million yuan (NT$2.9 billion, or US$97 million) last year. The company expects its sales in the Chinese market to jump 50% to 1 billion yuan (US$152 million) this year, thanks in part to an expansion into the mail-order business.

Test Rite will open no more than five outlets in China this year, including ones in Tianjin, Nanjing, and Guangzhou, compared with nine last year. Instead of adding more outlets, it will focus on personnel training by opening a Test Rite Institute to cultivate talent in support of its long-term development in China.

Moreover, to help achieve the goal of doubling sales and profits in five years, the group will embrace a unified brand for operations on the two sides of the Taiwan Strait. This will require the consolidation of five existing brands: TEST RITE, HOLA, HOLA CASA, and FREER in Taiwan, and HOLA TEST RITE in China. All the different brands, Ho explains, have created confusion among consumers.