The Department of Science and Technology (DOST) has joined forces with Filipino startup Packworks to revolutionize over 1.3 million sari-sari stores nationwide through the integration of Artificial Intelligence (AI). This collaboration aims to equip these traditional micro-retailers with advanced, data-driven inventory management tools, boosting their business growth and operational efficiency.
The initiative is supported by a PHP3.5 million research grant from the DOST-Philippine Council for Industry, Energy, and Emerging Technology Research and Development (PCIEERD) Startup Grant Fund (SGF) Program. This funding, combined with Packworks’ PHP1.5 million allocation, will facilitate the development of a machine-learning-powered precision marketing model. This innovative model will provide sari-sari stores with customized recommendations on sellable items and promotions, leveraging insights from Packworks’ fast-moving consumer goods (FMCG) partners.
“Our mission at DOST is to build an integrated, inclusive and sustainable startup ecosystem. We hope to support startups at every stage of development, from formation to validation, until growth,” according to DOST Secretary Renato U. Solidum, Jr. emphasizing the significance of this project.
The SGF Program, now in its second cycle, is dedicated to supporting technology-based startups, transforming early-stage technologies into market-ready products. Since its inception in July 2022, the program has backed 123 startups across various sectors, including sustainable industries, education, creative industries, data-driven technologies, climate change, and productivity enhancement tools.
Sari-sari stores, serving as the primary source of daily essentials for approximately 94% of Filipinos, face numerous challenges such as inadequate financial management, lack of actionable customer insights, and ineffective promotional campaigns. Additionally, the absence of a streamlined approach to receiving high-quality promotions from FMCG manufacturers hampers their ability to attract and retain customers effectively.
Packworks Chief Data Officer and project lead Andoy Montiel highlighted the potential impact of the AI-powered model, “Through this AI-powered model we will develop in partnership with DOST, we aim to equip small entrepreneurs with data-driven insights and targeted strategies for enhanced business success and expansion.”
As micro, small, and medium-sized enterprises (MSMEs) account for 99.5% of all business establishments in the Philippines, the AI-powered capability will significantly benefit the sector. The new technology will be integrated into Packworks’ Sari.PH Pro app and is expected to serve over 270,000 sari-sari stores across the nation.
DOST-PCIEERD Executive Director Dr. Enrico Paringit expressed enthusiasm for the partnership, “We are thrilled to partner with Packworks in this groundbreaking initiative to support the sari-sari store sector, a vital pillar of the Philippine economy. This collaboration exemplifies the government’s commitment to fostering technological advancement and economic growth through strategic public-private partnerships, as outlined in the Innovative Startup Act.”
Aligned with Republic Act (RA) No. 11337, or the Innovative Startup Act (ISA), this initiative underscores the government’s dedication to enhancing the country’s startup ecosystem and driving economic growth through technological innovation.
Packworks CEO Bing Tan shared his optimism about the collaboration, “We are elated to be collaborating with DOST through a shared vision to energize the grassroots retail industry in the country. This public-private partnership will be instrumental in addressing the unique challenges faced by sari-sari stores, providing them with the tools and insights needed to thrive in a competitive and increasingly digitized market.”
Since its launch in 2018, Packworks has grown from supporting a few sari-sari stores to becoming a comprehensive B2B platform that aids stakeholders across the supply chain ecosystem. Through the Sari.PH Pro app, sari-sari store owners can access pricing tools, inventory management, sales tracking, and working capital loans. In addition, the Sari IQ business intelligence tool, launched in 2022, provides real-time and historical consumer expenditure data, enabling retailers and brands to make data-driven decisions and boost sales.
The 18-month collaboration with DOST aims to expand the digital capabilities of more micro-retail stores, fostering entrepreneurial growth and success across the Philippines.