Filipino B2B startup ramps up sari-sari stores transformation

Filipino B2B startup Growsari said it will use the $77.5 million from its recent Series C round of fund raising to accelerate its plans to transform the country’s small physical retail stores, such as sari-sari stores, carinderias, eateries, pharmacies, and other roadside shops into comprehensive service hubs of their communities.

Growsari CEO and co-founder Reymund ‘ER’ Rollan said they are set to triple the number of store partners that will benefit from using their platform within two years, with an estimate of 300,000 store partners by 2023.

Growsari’s expansion in Visayas and Mindanao include key cities such as Iloilo, Bacolod, Cebu, Davao, and General Santos. Growsari is now present in 20 key cities and 400 municipalities nationwide.

“We are proud to share that we are on track in fulfilling our mission of creating a positive socio-economic impact to the lives of more MSME owners and the communities they serve nationwide,” said Rollan.

Rollan explained that aside from gaining a nationwide footprint, the expansion to Visayas and Mindanao is also strategic in terms of helping in the digital transformation of the small stores they serve.

“As we get farther out into the provinces, a lot of sari-sari store owners are underserved given the challenges of FMCG distributors to physically reach them. Digital inclusion in these areas has also been slower. So we see this as a huge opportunity where Growsari can come in to make a difference in the lives of small physical retail store owners,” added Rollan.

“300,000 small physical retail stores from different parts of the Philippines will soon be able to offer services beyond the selling of essential and basic items,” shares Rollan.

The added services that Growsari store partners can have access to through the app include telco credits, money remittance, bills payment, e-commerce, WiFi, and other e-services.

“Through our platform, store owners have access to new revenue streams which allow them to maximize their capital,” said Rollan. “In addition, we are doubling down on our capabilities to improve the overall customer experience and look to expand our ability to provide access to credit and basic financial services, which is a key pain point for MSMEs who have limited access.”

Growsari was born when Rollan and his fellow co-founders realized that the small physical retail sector is underrepresented and underserved, mainly because they are technologically-marginalized and logistically difficult to organize as a group.

“When we consider the extent of the presence and reach of sari-sari stores, then we can see that they are easily the single largest distribution channel in the country,” explained SiddhartaKongara, co-founder and chief technology officer of Growsari.

“Moreover, sari-sari stores serve a unique role in the neighborhood. Beyond being a commercial center and go-to of the community in providing easy access to their daily basic essentials, they are in fact their neighborhood’s social hubs,” added Kongara.

The continuing reality for these small stores is that despite the importance of the sari-sari store to the community, store owners make very little margins and few receive formal training on how to run a retail business. On the other hand, FMCG companies and their main distribution networks struggle to reach these stores given their small basket sizes, distance and lack of access in smaller roads.

Growsari bridges this gap by combining goods from multiple suppliers and applying route planning efficiencies.

Another way that digitalization impacts small store owners is through Growsari’s new financial services and partner offering - the upcoming launch of Digital Payments QR Code. The service allows owners to credit their Growcoins, Growsari’s in-app currency, directly and in real-time. which is seen to help make their lives even easier.

“Ultimately, our ambition is to cater to and reach the more than 1.1 million sari-sari stores nationwide and be their true partner in transforming and growing their small businesses,” said Kongara.