Artificial intelligence is no longer just a concept for large corporations but is becoming a practical tool for neighborhood sari-sari stores across the Philippines, helping small retailers make smarter business decisions and significantly improve their profitability.
Substantial Sales Growth Through AI Implementation
Recent analysis from technology startup Packworks.io reveals that artificial intelligence is making a measurable impact on micro-enterprises. The company studied over 300 stores in its network during a two-week period following data collection in September 2025 and documented impressive results.
Stores utilizing AI-driven recommendations experienced a remarkable 46 percent increase in daily gross merchandise value (GMV), indicating substantial improvements in overall store efficiency. This efficiency boost translated into a 17 percent rise in total sales for participating stores during the same monitoring period.
Working Smarter, Not Harder
Perhaps most notably, stores achieved these revenue gains despite operating on 20 percent fewer active selling days—reducing from five to four days over the two-week analysis period. This demonstrates how artificial intelligence can guide store owners in managing inventory more effectively, improving product selection, and planning for customer demand with greater precision.
The insights emerged from Packworks' examination of sari-sari stores that accessed its Store Insighting Project (SIP) document, a personalized report that transforms each store's transaction history into actionable recommendations powered by AI technology.
By comparing store performance before and after implementing SIP recommendations, Packworks quantified the direct business impact of engaging with AI-driven insights. The analysis further revealed that the sales increase was primarily driven by previously underperforming products identified by the AI tool, giving store owners clear guidance on which inventory to prioritize for maintaining operational efficiency.
Strategic Partnerships Driving AI Adoption
Packworks developed its AI-powered precision marketing tool with support from the DOST-PCIEERD Startup Grant Fund (SGF) Program, awarded in 2024 to promote wider artificial intelligence adoption in the country's micro-retail sector.
The company also formed strategic collaborations with ST Telemedia Global Data Centres (Philippines) to access its AI Synergy Lab for running large-scale machine learning models, and with Ateneo's Business Insights Laboratory for Development (BUILD) to construct a comprehensive data warehouse and business intelligence tools.
Packworks Chief Data Officer Andoy Montiel emphasized the early success: "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."
He added that as stores learn to leverage recommendations from AI-driven insights accessible through SIP, micro-retailers can make smarter decisions that directly translate into higher sales and more efficient operations.
Bridging the AI Adoption Gap
Packworks' latest innovation supports government efforts to help micro, small, and medium enterprises (MSMEs) embrace artificial intelligence. While AI adoption could unlock PHP 2.8 trillion in economic benefits by 2030 across various sectors, a report by the Philippine Institute for Development Studies (PIDS) indicates that only 14.9 percent of local businesses currently use AI tools.
This significant gap persists despite widespread computer ownership and internet access, highlighting both the slow rate of adoption and the urgent need for accessible, practical solutions tailored for small businesses.
Packworks Co-Founder Hubert Yap stated: "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."
The company's mission to integrate artificial intelligence into micro-retail operations aligns with the Philippine Development Plan 2023-2028, which recognizes the crucial role of digital transformation and emerging technologies like AI in increasing efficiency and revitalizing industries and services throughout the country.
