Home appliance distributor eyes 20 new stores in 2020

XTREME President and CEO Richard Lim

By Denise A. Valdez, Senior Reporter

A LOCAL distributor of home appliances is aiming to become a household staple by tapping the provincial market and offering products at bargain prices.

XTREME Appliances (Suntouch Technology Corp.) is bullish to spend P100 million to open 20 personally branded stores this year in a move that defies the general spending slowdown in the business sector, while the coronavirus pandemic goes on.

XTREME President and CEO Richard Lim said he found a sweet spot in provincial buyers, as they are not as badly affected by the lockdown as Metro Manila residents are.

“Hindi ako gaanong tinamaan ng pandemic kasi mas malakas ako sa probinsya kesa Metro Manila. ‘Yung probinsya, hindi naman siya tinamaan ng katulad dito (I wasn’t affected heavily by the pandemic because my strength lies in the province, against in Metro Manila. In the province, the impact is not as bad as it is here),” Mr. Lim told BusinessWorld in a video call last week.

He noted more than 90% of XTREME’s sales come from the provinces, that is why the company was able to maintain a steady growth even in the height of the lockdowns during the second quarter.

XTREME started selling home appliances in 2016, with products such as television, air-conditioner, refrigerator, washing machine, electric fan, gas range, and microwave oven.

At present, the company sells its products through sales agents, online shopping platforms Shopee and Lazada, and close to 3,000 stores nationwide.

Mr. Lim said the company still wants to expand its portfolio in the coming months, as its target is to become a one-stop shop offering all types of household appliances. It is also looking to tap corporate buyers such as condominium builders.

“Lahat ng [gamit sa] bahay mo, isang brand lang. ‘Yun ang target ko. Para in case magseservice ka, hindi ka na tatawag sa maraming brand (My target is for buyers to have all their household appliances under one brand. So in case you need servicing, you only need to contact one brand),” he said.

These one-stop shops would center on provincial locations in Luzon, Visayas and Mindanao. One store would cost around P5 million for investment, hence the P100 million capital for 20 stores in 2020.

Mr. Lim said provincial buyers are conscious about affordability, that’s why XTREME’s strategy is to offer products at a 20% to 25% markup. He claims this is a lot cheaper than top brands whose selling prices are about double, but the products are of similar quality to XTREME’s.

“Ang target ko B, C, tsaka D. ‘Yung quality ‘tsaka ‘yung presyo kaya ng mga tao (I’m targeting the B, C and D markets, offering them quality products but at prices that people can afford),” Mr. Lim said.

In the next three to five years, XTREME’s goal is to increase its store network to 200 to 300 stores, which will be funded through internally-generated cash.

“Itong XTREME, ito ang gusto ko palakihin. Kung kaya niya, XTREME na lang ang i-IPO ko (I want to grow XTREME. If it can, this might be the company that I will list through an initial public offering),” Mr. Lim said.

XTREME is under Mr. Lim’s Sun Group of Companies, which also has businesses in leasing, hospitality and construction supply.

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