Making Red Oceans Blue

Earlier this afternoon, i was a panelist in Anna Rojas’ strategy class in Ateneo. A group of students decided to study the sari-sari store industry, with a specific focus on Hapinoy.

Their research and analysis confirms what we as MicroVentures already know – that the sari-sari store industry is a difficult sector to compete in. It’s a bloody red ocean with a smorgasboard of players from all sides - Manufacturers. Distributors. Wholesalers. Megachains. Groceries. Other retailers. Suppliers.

And amidst this dramatically competitive backdrop, our beloved sari-sari store battles it out as the smallest unit of retail. The smallest.

But wait.

Individually, the smallest, yes. But in aggregate, there are more than 600,000 of them out there.

Which is the first opportunity in this red ocean that we’re capitalizing on. That we can be the first to actually aggregate and organize them in such large numbers. Based on our estimation, that tipping point is 100,000 Hapinoy Stores. With that scale, we can definitely reinvent the scale equation.

But that’s not where we want to end up in. Aggregation is only the first step.

As we’ve said continuously, the only way to create more value in this space is to bring sari-sari stores to the next level.

Evolution is the name of the game. Innovation is our fuel.

And so if we do what we set out to do, the sari-sari store as you see it now will be so much different when we reach the Hapinoy Store of the future.

It’s not going to happen overnight, most definitely. But it’s the only way to outcompete the industry and turn it on its head.

It’s the most viable path in making this bloody red ocean, blue.