Innovator aids sari-sari stores

Sari-sari stores or small community retailers often face the problems that big businesses encounter, such as high inventory and lower-than-expected revenues.

The difference is that sari-sari stores usually do not have immediate access to the latest technologies that can help them improve their business operations.

Assembling a group of fellow motorcycle riders, Bing Tan created the startup Packworks, a provider of the Sari.PH Pro app.

The app is a business-to-business data tool that tracks the inventory, prices of goods, cash flow of sari-sari store owners, and consumer trends so they can increase their sales.

It also links the sari-sari store operators to lenders so they can diversify their product range and grow the business.

“After years of using the technology, they saw bigger products spread. We were able to increase their sales by 30 to 50 percent,” Tan, co-founder and chief executive officer of Packworks, said.

Through the app, Tan said sari-sari store owners can check business operations faster, reasonably price their items, and immediately see which goods are moving fast or slow.

Instead of manual record-keeping using pen and paper, small entrepreneurs employ smartphones and tablets to access the app and review its various data sets for free.

“The sari-sari store owner usually is the sole manager of the operations of the business. Most of the time, they cannot keep up with the changes in prices of goods because of inflation and they are left with too much inventory,” Tan said.

“The way we do it is similar to the way that Facebook functions.”

It’s free for the stores we work with. That’s why the relationship with the fast-moving consumer goods (FMCG) industry is important,” he said.

Packworks has helped nearly 300,000 sari-sari store owners nationwide. Tan said the company aims to grow its clients to 500,000.

Meanwhile, through the company’s Sari IQ, brands can compare sales of their products with competitors, and see their market share per area and weigh the performance of sari-sari stores.

Tan stressed Packworks has gained some success through its relationships both with the sari-sari store owners and the players in the FMCG.

“We are their indirect trade partner. We work with FMCG for general business strategy. We’ll work with a sari-sari store owner if he or she has good standing with suppliers,” he said.

Trifecta magic

“This is a trifecta relationship. That’s part of the magic we’re creating here,” Tan added.

According to data gathered by Packworks, the country has over 1 million sari-sari stores where 94 percent of Filipinos source their essential goods.

“Before we worked with the sari-sari store owners, we didn’t know them. But we know that they are the most resilient and they’re also the grittiest entrepreneurs,” Tan said.

Packworks launched the app during the pandemic when people were prohibited from gathering outside at malls to prevent the spread of Covid-19.

“We started in 2018 when we were building software for big companies. The problems we were solving for the sari-sari stores were also the ones we were trying to solve for big clients. We thought why not help those who were in need,” Tan said.

Tan, along with Hubert Yap, the startup’s chief platform officer and Ibba Bernardo, chief marketing officer, realized that sari-sari stores needed to digitalize to make their operations more efficient as many Filipinos remained dependent on them for their basic goods.

Their motorcycle rides, Tan said, helped Packworks easily determine the entrepreneurs’ pain points.

“We have been motorcycle rider friends for 15 years. Our relationships with sari-sari stores are very personal. We would always talk to the people there,” he shared.

Thanks to the team’s diverse skill set built in 20 years, Tan also said Packworks has been able to serve its clients well.

He shared that Yap worked in the distribution services to sari-sari stores, while Bernardo served in Facebook’s literacy committee for digital inclusion.

Initially used for corporate social responsibility activity, the app’s users grew from 20,000 in 2019 to 60,000 by 2020.

Packworks’ 2023 report also shows its network generated P8 billion in sales from over 8 million transactions, a 20 percent increase from the previous year.

Trained young

“I did not graduate from a technical course and a technical university. I developed my skills along the way,” Tan said.

Instead, Tan said he accumulated his engineering, coding and technical knowledge through short courses, such as those from IBM and Ateneo de Manila University.

He said he has been passionate about technology since he was a kid. “I don’t know how to explain it, but passion is passion. You just have it,” Tan said.

He said his drive to help sari-sari store owners and being business-minded partly stemmed from the death of his father.

“I lost my dad at an early age so I had to help my mom to take care of the family.

I think that’s why I wanted to help sari-sari stores because I know how it feels when you need money. I learned how to be resourceful from that experience,” Tan shared.

More opportunities

Tan said Packworks continues to find ways to broaden the access of sari-sari store owners to financing.

Currently, it works with Cebuana Lhuillier and 1Sari Financing Corp. due to some challenges with traditional banks.

“There are only a few institutions in the country that know how sari-sari stores work. There are only a few banks that have an end-to-end process,” Tan said.

He said banks tend to offer excessive amounts of credit the sari-sari stores cannot afford to borrow.

“When we talked to banks, their credit line was too high. Our average credit line is P2,500 to P5,000. They cannot afford P1 million,” Tan said.

While Packworks aims to serve more Filipino entrepreneurs, Tan said the company is open to exploring expansion projects.

“It’s difficult to expand in other countries but we have high hopes. We were lucky enough to have been invited to Indo-China, Cambodia, Indonesia and Bangladesh,” he shared.