Since the COVID-19 pandemic, online shopping spending in the Philippines has increased significantly, with more consumers shifting to eCommerce websites. Retail tech startups are enhancing their online presence to tap into this market.
The Philippine retail market is likely to grow by USD 70.67 billion from 2021 to 2026, with a CAGR of 11.68%, and much of this will be online. The primary driving force behind this robust growth in the retail landscape is the rising demand for convenience food products, particularly among busy individuals.
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However, the sector faces significant challenges, particularly from the threat of counterfeit products, which will disrupt the market for key players. Despite these obstacles, the emergence of innovative startups like Growsari, Peddlr, Packworks, ChatGenie, and Enstack is a clear sign of the potential and optimism in the retail tech industry in the Philippines.
Growsari
The tech-enabled B2B platform Growsari has made significant strides in helping small stores in the Philippines digitise, transforming sari-sari stores into comprehensive service hubs. Founded in 2016, Growsari serves neighbourhood stores, pharmacies, and other roadside and market shops by providing on-demand inventory, telco loading, bill payment, and working capital services.
The startup’s user base has grown from 1,000 stores in three cities in 2018 to over 100,000 across 220 municipalities on the island of Luzon. The startup’s 2022 achievement of raising USD 77.5 million in a Series C funding round led by KKR, bringing its total funds raised to USD 110 million, is a testament to its growth and success. The funds helped expand operations, technology, and data science teams and launch in the Visayas and Mindanao regions.
Peddlr
Another startup, Peddlr, provides micro and small enterprises with inventory and business financial management tools. It offers an “OS lite” mobile POS tool, digital ledgers, and an online shop for small businesses.
Since its inception in July 2021, Peddlr has raised USD 4.8 million, including USD 4.3 million, from a seed funding round led by Patamar Capital and Crestone Venture Capital in 2022. The company aims to support 1 million micro and small businesses and accelerate the release of new software features and digital products.
Peddlr’s community has grown to over 28,000 active users on their Facebook Group, providing a support structure for embracing technology.
Packworks
Philippines-based mobile enterprise resource planning firm Packworks has made significant strides in digitalising sari-sari stores by offering inventory, accounts, and data management services. Founded in 2018, Packworks connects these stores directly to suppliers and financial institutions through its super app.
In 2022, it secured USD 2 million in seed funding led by Fast Group and CVC Capital Partners from the Department of Science and Technology. They ringfenced the funds to develop an AI-powered precision marketing model and enhance the super app.
Packworks started with five sari-sari store partners and now has a network of 150,000 stores. However, like others in the industry, the company may face challenges like market saturation and evolving consumer preferences, which could impact its future growth.
ChatGenie
ChatGenie is a multi-channel commerce platform that provides online payment and automated delivery services to over 2,500 merchants in the Philippines. Founded in 2020, the startup raised additional capital in its fundraising campaign as part of Accelerating Asia’s fifth cohort.
It has processed over 2,500 transactions via Messenger, GCash, and Viber. The company introduced the MSME Booster Program to offer free online store services for MSMEs, and expansion of its operations and client base are also in the works. It has raised USD 220,000 over two rounds, with the latest funding success in October 2023.
Enstack
The business super app Enstack aims to digitise small and medium enterprises in the Philippines and Southeast Asia. The startup raised USD 3 million in a funding round led by Mangrove Capital Partners, with participation from Xendit and William Kim in March 2023.
It offers integrated tools for businesses to sell across online and offline platforms. Enstack grew fivefold in the last quarter of 2022, and projections show it will continue its exponential growth in the coming years. The super app empowers SMEs to be future-ready, addressing the rise of “Commerce 3.0” in Southeast Asia.
A promising future for retail tech in the Philippines
The continuing growth of eCommerce and brands enhancing their online presence have been excellent boosts for retail tech in the Philippines. They have sparked a significant wave of new job opportunities spanning diverse sectors and contributing to the country’s economic growth.
In logistics and delivery, the demand for warehouse personnel, delivery drivers, and supply chain managers has surged as online shopping volumes continue to increase. Meanwhile, AI has improved data analytics of consumer trends and behaviour.
By digitising traditional operations, retail tech streamlines processes and enhances customer experiences through personalised services and efficient inventory management systems. Adopting digital platforms has empowered small businesses to connect with a broader audience, contributing to economic inclusivity and resilience in the Philippines‘ retail landscape.