Study: AI lifts sari-sari store sales by 46% in two weeks across the Philippines

AI adoption in sari-sari stores is beginning to deliver measurable commercial impact, with new data from Packworks showing that small neighbourhood retailers can significantly lift revenue by acting on AI-powered recommendations.

The Philippines-based tech startup analysed over 300 sari-sari stores in its network, reviewing performance before and after store owners accessed its AI-driven Store Insighting Project (SIP) document. Within just two weeks of the September 2025 data collection period, Packworks recorded a 46% increase in daily gross merchandise value (GMV) and a 17% rise in total sales across participating stores.

The findings offer a compelling glimpse into the potential of AI at the micro-retail level - one of the country’s most fragmented but economically vital sectors.

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One of the most striking insights is that stores applying AI recommendations still earned more despite operating on fewer days. Packworks found that the stores’ active selling days dropped from five to four per week - a 20% reduction - while revenue continued to climb. The data suggests that AI-guided inventory choices, product mix optimisation, and demand planning helped store owners maximise output within tighter operating windows.

The report also highlights AI’s role in unlocking revenue from stock that typically underperforms. By surfacing slow-moving items that carry sales potential, the SIP allows micro-retailers to correct inefficiencies and move inventory more strategically.

Packworks developed its AI-powered precision marketing tool through the DOST-PCIEERD Startup Grant Fund (SGF) awarded in 2024. The company also collaborated with ST Telemedia Global Data Centres in the Philippines via its AI Synergy Lab to run large-scale machine learning models, and with Ateneo’s Business Insights Laboratory for Development (BUILD) to develop a data warehouse and business intelligence suite.

“Even at this early stage of adoption, we’ve recorded increased sales and enhanced operational efficiency from stores by using the AI tools we’ve developed with support from DOST and through our collaborations with STT GDC and Ateneo BUILD. As stores learn to leverage the recommendations from the AI-driven insights they can access through SIP, microretailers can make smarter decisions that translate into higher sales and more efficient operations,” Packworks chief data officer Andoy Montiel said.

The company positions its SIP tool as a practical on-ramp to AI for sari-sari owners - many of whom manage limited inventory, tight margins, and fluctuating demand patterns daily.

While AI’s economic potential in the Philippines is immense - estimated at 2.8 trillion pesos (US$47.5 billion) in additional value by 2030 - adoption remains low. According to the Philippine Institute for Development Studies (PIDS), only 14.9% of businesses currently use AI tools, despite high levels of computer ownership and internet connectivity.

Packworks sees its role as enabling bottom-up transformation among the country’s smallest retailers.

“Our mission at Packworks is to close the gap by making AI practical, accessible, and useful for the smallest retailers. Our latest innovation highlights the immense potential of how technology, especially AI, and strategic partnerships can drive sustainable growth for neighborhood stores across the Philippines,” Packworks co-founder Hubert Yap said.

The initiative aligns with the Philippine Development Plan 2023-2028, which underscores the value of digital transformation and emerging technologies in revitalising industries and improving operational efficiency among MSMEs.

Packworks began in 2018 as a passion project among founders Yap, Bing Tan, and Ibba Bernardo, who travelled to remote areas delivering solar panels. Their trips revealed the everyday constraints faced by sari-sari store owners - limited access to goods, data, and tools - and sparked the idea for a platform designed to give small retailers the same technological leverage as large FMCG brands.

Since then, the company has grown into a B2B ecosystem that connects thousands of stores with distributors, wholesalers, and major FMCG players. With women owning roughly 75% of all sari-sari stores, Packworks also considers digital access an essential lever for economic empowerment.

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