One sari-sari store at a time

I’m beginning to think most good ideas come from high school buddies who want to change the world for good and coffee shop talks late into the night.

An exaggeration, of course, but that’s exactly how it started for Paolo Benigno A. Aquino IV and Mark Joaquin Ruiz. These two thirty-somethings have come up with an idea to alleviate Philippine poverty one sari-sari store at a time through a business model that aims to create the first Filipino branded sari-sari store chain.

They both gave up their leadership positions in their regular jobs – Aquino as chairman of the National Youth Commission and Ruiz as senior customer marketing manager in Unilever – to set up Microventures Inc. last year and begin the Hapinoy Store chain.

If the idea sounds like a novel, idealistic and quite impossible idea, blame it on their youth and, perhaps, genetic make-up. Does the “Aquino” surname ring a bell? Paolo Benigno or Bam as he is known to friends, is the nephew of former President Cory Aquino and the late Ninoy Aquino.

Interestingly, however, big corporate names like Smart Communications smell a good business proposition and have signed on for a long-term engagement. Smart public affairs chief Mon Isberto told me their main reason is definitely not altruistic. Nestle, Colgate, Century Tuna and the maker of Oishi have also signed up. They all think they can fulfill their “doing good while doing well” sort of thing in this new idea.

The concept of the sari-sari store is a Filipino invention that comprises a major chunk of the Philippine economy, numbering to around 650,000. Question is, can Microventures make this thing work?

Here are the mechanics:

Beneficiaries of Microventures’ microfinance partner, Center for Agriculture and Rural Development Inc., who are in good standing and has an existing sari-sari store can sign up to join the Hapinoy Store program.

Beneficiaries of CARD are mostly nanays, the more glamorous title being work-at-home moms. If you are familiar with how microfinance works, these nanays work together in groups of five or thereabouts, so when Bam says the nanays have to be in good standing to be considered for the program, I imagine they need to have good peer reviews.

Reason? Under the program, Microventures will take a chance on these stores by giving sari-sari stores a makeover with bright paint and the huge Hapinoy smile plus additional capital from CARD. The stores will have direct access to manufacturers resulting in a bigger margin, the nanays can qualify for trainings under sari-eskwela where they will learn about inventory management, credit management and other stuff.

That should be of interest to overseas Filipino workers who are always enticed to put up a sari-sari store and fail because of bad management. The Hapinoy idea is like franchising and professionalizing how the business is done. Eventually, if all goes well, Microventures wants to see the sari-sari stores evolving into bigger businesses.

It’s not very hard to see how manufacturers will benefit from the scheme. Stripped of the PR lingo, they are merely expanding their market so they can reach areas where the big dealers cannot go. I asked Bam if Microventures itself could survive with a profit? Those trainings, makeovers, logistic support, the food we ate for lunch during the press conference – all those require money!

“We are trying to fulfill our business and social objectives at the same time. We don’t want mere dole outs, we want to help people on the ground. But we will also fulfill our business objective and we will be sustainable once we have the scale,” he said.

The targeted scale is at least 100,000 stores. Whew. That’s a lotta work, but it’s an idea that I personally think is worth trying. When you write business stories day in and day out as a profession, you see a neat idea immediately. This is definitely one of those.

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