[Executive Edge] The man who wants to transform ‘sari-sari’ stores

The most iconic microenterprise in the Philippines is the “sari-sari” store. A staple of barangays and subdivisions everywhere, they sell everything from canned goods to cell phone load at a small, but non-inconsequential profit. They’ve remained largely unchanged over the years – the sari-sari store of your parents is not much different from the one you would go to – until Hapinoy came along.

Hapinoy is a social enterprise founded by Senator Bam Aquino along with Mark Ruiz, who is married to Reese Fernandez Ruiz, the founder of Rags 2 Riches.

Hapinoy aims to level up the sari-sari store as we know it. “Hapinoy empowers women microentrepreneurs who own sari-sari stores; we partner with them by providing training, access to capital, and new business opportunities,” Ruiz said.

They focus specifically on supporting new initiatives that can create social change. Ruiz shared, “These new business opportunities are ideally goods and services that can positively impact the communities that these sari-sari stores serve, a concrete example of which is our current focus – mobile financial services.”

Of course, this is all hard to picture until you hear individual stories of transformation. One story that the Hapinoy team recently shared on their blog narrated the experience of Nanay Belen who joined Hapinoy in 2007. Prior to joining the Hapinoy network and undergoing its 10-month intensive program, her store had very limited inventory.

Post-Hapinoy, her store has prospered. Her store has doubled in size and now includes a storage room and 4 refrigerators. Most notably, her store now offers new, value-added services, including silkscreen printing, photocopy and lamination, and mobile money remittances.

The additional income generated from her upgraded store has allowed her to set her sights on paying for her children’s education, buying a service vehicle for her husband, and improving her business even further.

The Hapinoy story

How did Ruiz come up with such a seemingly niche idea? When entrepreneurs think of new business ideas, the first thing that comes to mind is not usually a support network for sari-sari stores. Ironically enough, Ruiz got the idea while working in the corporate world.

After earning a degree in management engineering from Ateneo de Manila University and working his way up at Unilever Philippines, he ended up in senior management. There, he worked on retail solutions, customer marketing, and channel strategy. Through this position, he became familiar with the inner workings of sari-sari stores, and he recognized the opportunity that Hapinoy is today.

Still, the corporate world is different from dealing with microenterprises. How does Ruiz pitch Hapinoy to sari-sari store owners? “The pitch is really that Hapinoy will partner with you in order to help you grow your business through a combination of training, capital, and new business opportunities,” Ruiz said.

Of course, most sari-sari store owners have probably never even heard of what a social enterprise is, so Ruiz is bound to get objections. “Common objectives that are sometimes encountered is that we also ask a lot from them in terms of effort – for example, we run a rigorous training program that requires time and hard work; engaging in the new business opportunities entails additional work and compliance.”

To Ruiz, this is part and parcel of the process. “But this is in line with our philosophy that the nanays (mothers) also have to equally work had for the opportunities that are also provided to them – that this is in essence a partnership, and not a dole-out,” he said.

Though it’s easy to convince a few sari-sari store owners to partner with Hapinoy, Ruiz needs to ideally network thousands of them. “The challenges at the macro-level are really the economics of working with the micro,” Ruiz said. “Since you work with microenterprises, the tipping point is achieved only when massive scale is achieved.”

Despite this scale required for success, Ruiz remains upbeat. “The flipside though is that there are so many microenterprises in the Philippines and so the potential for scale exists,” he shared. “That is why we need to continue on forward in our expansion and helping more stores!”

Ruiz has good reason to remain positive: Though the concept of Hapinoy is still new, the company has gotten a lot of traction. “Hapinoy’s communities are now across South Luzon – from Laguna, Quezon, to Camarines Norte, Camarines Sur, and Sorsogon,” Ruiz said.

“This year we’ve begun to expand to Leyte and hopefully, Samar, helping sari-sari stores get back on their feet post-Yolanda," he said.

Ruiz has big ambitions for Hapinoy, specifically with regard to market penetration. “We envision a future wherein there is a Hapinoy Store in every barangay in the Philippines, providing social impact goods and services such as mobile financial services to their communities,” he said. “We also believe in catalyzing local, vibrant economies by circulating products made by local microentrepreneurs throughout the store network.”

A marriage based on shared vision

As Hapinoy grows, Ruiz has his wife, Rags 2 Riches founder Reese, to share ideas  and strategize with. He calls having this kind of relationship with the person you are married to as “the best feeling in the world.”

“Reese and I have a great, healthy relationship mainly because we share the same values and are headed towards the same direction,” he said, adding, “Of course we share notes across our social enterprises and the learning is very porous.”

Like any two entrepreneurs, Ruiz and his wife are opinionated and have their fair share of business disagreements, but it’s never over their central mission. “What never ceases to amaze me is that the core purpose – the Why We do What We do – is so intrinsically aligned,” Ruiz said. “We can argue about strategy, operations, details – but never The Why.”

Given that they are both social entrepreneurs, they are much more understanding with the demands of the calling.

“Furthermore, being very passionate individuals, we both are extremely hardworking – almost 24/7 at times – but it’s easy to understand each other because we’re both extremely dedicated to the missions of our social enterprises,” Ruiz said.

Still, the couple makes it a point to take time away from their busy schedules as social entrepreneurs. Ruiz said, “I think the secret though is that we still know how to recharge, vegetate, and have fun.”

Since Ruiz leads Hapinoy and also gets an inside look at the growth of Rags2Riches, perhaps there is no other person in the country better suited to giving an overview of the landscape of social entrepreneurship in the Philippines.

When asked to outline the challenges that lie ahead for social entrepreneurs, Ruiz said, “There are still many challenges mainly because the models are still emerging. While the ecosystem and environment has certainly moved forward these past few years, we are still in the fairly early days.”

He continued: “The good news though is that in the past couple of years, there’s so much momentum that is snowballing. When we were starting around 7 years ago, nobody knew of the term ‘social enterprise.’ Now, people know the term and have an idea of what it is. In fact, so many people are diving into it – whether straight from college or leaping over from the corporate world.

Ruiz encourages, “Now is the best time to be a social entrepreneur in the Philippines!” – Rappler.com

 

Rappler business columnist Ezra Ferraz graduated from UC Berkeley and the University of Southern California, where he taught writing for 3 years. He now consults full-time for educational companies in the United States. He brings you Philippine business leaders, their insights, and their secrets via Executive Edge. Follow him on Twitter: @EzraFerraz