DOST partners with Packworks to digitize sari-sari stores

By Francis Allan L. Angelo

Sari-sari stores in the Philippines are set to become smarter and more technologically advanced through a new initiative funded by the Department of Science and Technology (DOST).

Packworks, a Filipino startup, is leveraging Artificial Intelligence (AI) to equip over 1.3 million sari-sari stores with data-driven inventory management tools aimed at enhancing business growth.

The DOST-Philippine Council for Industry, Energy, and Emerging Technology Research and Development (PCIEERD) Startup Grant Fund (SGF) Program has allocated PHP 3.5 million to support Packworks’ PHP 1.5 million investment.

The funding will develop a machine-learning-powered precision marketing model that offers sari-sari stores customized recommendations on sellable items and promotions from Packworks’ fast-moving consumer goods (FMCG) partners.

DOST Secretary Renato U. Solidum Jr. expressed his support for the project.

“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,” Solidum said in a press statement.

Sari-sari stores, which account for daily essentials for about 94% of Filipinos, face challenges such as inadequate financial management, lack of actionable customer insights, and ineffective promotional campaigns.

Packworks aims to tackle these issues through its AI-powered model, as explained by Chief Data Officer and project lead Andoy Montiel: “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.”

Micro, small, and medium-sized enterprises (MSMEs) constitute 99.5% of all business establishments in the Philippines. Among these, around 500,000 are in the wholesale and retail industry.

The new AI capabilities will be integrated into Packworks’ Sari.PH Pro app, benefiting over 270,000 sari-sari stores nationwide by providing tools for better inventory management and business insights.

The initiative aligns with Republic Act (RA) No. 11337, or the Innovative Startup Act (ISA), reinforcing the government’s commitment to fostering technological advancement and economic growth through strategic public-private partnerships.

Dr. Enrico Paringit, Executive Director of DOST-PCIEERD, highlighted the importance of this collaboration: “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.”

Packworks CEO Bing Tan shared his optimism about the partnership.

“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 rapidly as a B2B platform, enabling growth for stakeholders across the supply chain.

In 2022, the startup introduced Sari IQ, a business intelligence tool offering real-time and historical consumer expenditure data to help retailers and brands gain visibility into sari-sari stores and expand their reach.

The 18-month collaboration with DOST aims to reach more micro-retail stores across the Philippines, enhancing their digital capabilities and fostering entrepreneurial growth and success.