By Stephanie E. Buck
September 20, 2017 

The bright oranges, purples, blues, greens, and yellows advertising everything from coffee, to laundry products, to shampoo, to cigarettes are a common sight in the Philippines. These are the colors of the Sari Sari stores. Sari Sari roughly translates to “variety” in Tagalog. The stores often jut off of the owner’s home and can carry as many as 200 different types of products in one small area. And they are more than spaces to buy items for daily use. They are gathering places, an extension of the customer’s own pantry, and usually owned by women. There are upwards of a million Sari Sari stores throughout the country and while they may help their owners scrape by, they tend to remain very small and not hugely profitable.

When Mark Ruiz sees these stores, though, he sees their potential, and a question surges to the front of his mind: how can these micro-businesses grow and better meet the needs of their communities?

This question nagged at him, even while he was moving up the career ladder at Unilever, focusing on sales, customer marketing, and channel strategy. He enjoyed his work, and was grateful for the experience, but he started to feel like something was missing. His desire to help people grew stronger, and still the question would not let him go. He knew that, whatever the answer, he needed to have a business-based solution. And because of his experience and expertise in helping top Unilever clients improve their businesses through customized support in management and retail solutions, he thought, “Why not give that kind of tailored support to the smallest of store clients as well?”

And so, after seven years, Ruiz left his corporate job to co-found a social enterprise with his good friend, Bam Aquino. They eventually created Hapinoy, a play on Tagalog words that means “Happy Filipino.” After extensive research, Ruiz and Aquino determined that the main things these Sari Sari stores would benefit from would be access to capital through micro-financing, training, and new business opportunities. Focusing on these three components could help integrate the stores into the formal economy, and create alternative distribution methods to give marginalized populations better access to essential goods and services. And Hapinoy could do so in a way that wouldn’t depend solely on grants or donations.

The right place at the right time

Entrepreneur Bella Sadongdong in front of her sari sari store. Photo: Qualcomm® Wireless Reach™

Entrepreneur Bella Sadongdong in front of her sari sari store. Photo: Qualcomm® Wireless Reach™

The confluence of his nagging question, his business and marketing training, and mobile technology becoming cheaper and more ubiquitous, along with some important partnerships that helped them get started, has proven essential to Hapinoy’s growth. It has also helped Hapinoy’s clients expand their businesses and better provide for their families and communities.

Hapinoy launched with support from CARD, the Philippines’ leading lending institution for micro and small enterprises, and started out with distributing fast-moving consumer goods. But they quickly realized they were running into competition from large chain stores, and looked towards the next business opportunity. That opportunity came in the form of mobile money. Hapinoy realized the Sari Sari stores could also become centers where people could come for mobile money services, such as remittances, and more. And from there, it struck Ruiz that mobile devices could also serve as an important business tool to streamline and create new business opportunities for the store owners.

Timing also proved fortuitous when Aquino met a representative of Qualcomm® Wireless Reach™ and invited Hapinoy to apply for a grant, thus launching a collaboration. This partnership has helped Hapinoy better understand the opportunities that mobile technology can provide, especially at the hands of the store owners. And this has “changed the game,” Ruiz says. “(Mobile technology) offers the same benefits as a computer, but it’s exponentially easier to use and certainly a lot more affordable.” Qualcomm Wireless Reach and Hapinoy partnered to launch a micro-franchise called BizMo (business on your mobile), allowing the Sari Sari stores to do much more than sell consumer goods. While conducting mobile money activities still represents the bulk of transactions through BizMo, more Sari Sari store owners are beginning to venture into mobile top-ups, micro-insurance, and paying bills via their mobile devices.

e-commerce via mobile is also starting to take hold, meaning that the Sari Sari stores can now sell anything in addition to what they already have in stock, including appliances and solar products. Ruiz describes one store owner who expressed pure joy and surprise at being able to sell washing machines with the help of BizMo - something she had never thought she’d be able to do.

Moving into e-commerce will be especially important as more Filipinos switch from shopping at Sari Sari stores to supermarkets, as some analysts predict. Ruiz says, “This is why we did the Hapinoy BizMo Program on top of the regular Hapinoy training program. This is our response to helping the Sari Sari stores transition into the new retail environment.” While it is true that the shift in retail market may drive some of the smaller, less profitable stores out, Ruiz noted, “We need to help the growth-oriented ones be future-proof to modernizing retail, convenience stores, and e-commerce. With Hapinoy BizMo’s diversification into e-commerce and being a last-mile fulfillment point, we truly believe that Hapinoy BizMo Stores will have a very important role in this emerging e-commerce future.”

A Nanay in her shop. Photo: Qualcomm® Wireless Reach™

A Nanay in her shop. Photo: Qualcomm® Wireless Reach™

Not so hands-off (at first)

Of course, equipping the store owners to be able to use wireless technology well is no small feat. Many of these women did not grow up with technology, and are initially averse to it. However, Ruiz says that once the store owners see the phones as a business tool, “they see that the device can help them sell more, and that’s an incentive (to learn) in itself.”

For starters, it helps that mobile phones are easier to use than desktops. With only one button to worry about, instead of a keyboard and monitor, the learning curve is already less steep. Still, Ruiz and his team had to develop a mobile literacy program in addition to the business training they provide. The mobile training is currently in-person in small groups, although Ruiz says that they’re also working to make some of the models available in a digital format so that it is easier to scale up the training efforts. Once the store owners are on-boarded, a Hapinoy staff member or consultant visits them regularly for the first couple of months to check in andhelp trouble-shoot, etc. After that, Hapinoy provides a customer service hotline that the clients can call for help.

A Family Affair

Recognizing that the women in the house are often not alone, Hapinoy also works to offer training for the rest of the family. In the case of mothers with tech-savvy teenagers in the house, Hapinoy makes sure to invite the children to the mobile tech training workshops so that they can also support their mothers in mastering the technology.

Beyond mobile training, Hapinoy has found that as the women-owned Sari Sari stores become more successful, sometimes the owners face pushback from their husbands. So, part of Hapinoy’s training course includes a module that incorporates men into the business, helping them envision how the store can grow while centering it around the family. This helps prevent the men from feeling emasculated, and enables husband and wife to become business partners.

Scaling Up

When Hapinoy launched in 2007, they began by working with just 10 stores. Now, with their offering of micro-financing, training, and mobile business opportunities, they reach over 10,000 stores. The business training Hapinoy offers has led to important behavior change among store owners, namely, record keeping. Prior to Hapinoy’s business training modules, most store owners did not keep thorough records, making stores more subject to internal theft, a sub-optimal product mix, and lower profitability. As a result of better record keeping, on average, the Sari Sari stores that go through this training course increase daily cash sales by 24%, 57% decrease in loss of goods, and almost all qualify for a larger credit line.

Beyond this, Hapinoy’s BizMo app now operates in more than 300 stores in six different provinces in the Philippines, and Ruiz and his team continue to work to bring BizMo to more stores in more areas. Hapinoy and Qualcomm Wireless Reach aim to get BizMo into 1,000 stores by the end of the year . Results so far are promising, with most users seeing at least a 20% increase in sales. The owners using e-commerce typically can reach about a 25% increase, although Ruiz admits that number comes from a smaller sample size than the broader training sessions from which they have data. Ruiz would like to see them boost that to 50% eventually.

The Sari Sari store owners also report feeling more confident in themselves. While it can be easy to overlook the importance of mental health, particularly when access to good food andclean watercan seem so much more urgent, human dignity is also an important element of a holistic approach to global development, as Amartya Sen and others have advocated. The stress that comes with struggling to make ends meet, or not being able to plan for the future, takes an immense toll on emotional and physical wellbeing. As these store owners feel that they can walk around their communities with their heads held higher, Ruiz sees this as one aspect of true success.

Back to Basics

Figuring out the right way to offer free training to Sari Sari store owners, while also earning revenue to be more sustainable was tough. Hapinoy registered as a for-profit business. But soon they realized, that if they were to keep the training free, which was a priority for them, they would need grant funding. They looked to B-Corporations, and other hybrid social enterprise models. After that, they decided to set up a foundation arm of the company to be able to accept grants and donations, like the one from Qualcomm Wireless Reach, so they could continue with their training and capacity development services. This, in addition to selling their market research services, charging a small fee to users of BizMo, and earnings from the e-commerce transactions have started to provide a sustainable business model for Hapinoy. Hapinoy now employs more than 30 people, including staff in their main and field offices, as well as consultants, and is looking to hire a few more people.

Needless to say, Ruiz’s life looks very different now than it did five years into his career at a large multinational corporation. “It’s not easy,” he says. “There are times when it’s more stressful than my corporate job was.” He describes it as a positive kind of stress, though, adding: “I haven’t regretted leaving my job… I maintain a lot of respect for people who stay in the corporate world, but I have what I need. And I live a happy life.”

photo: Qualcomm® Wireless Reach™

photo: Qualcomm® Wireless Reach™

This story was made possible with the support of Qualcomm® Wireless Reach™