The long-held retail belief in the Philippines that “bigger is better” is being reshaped as consumers increasingly seek speed, convenience, and accessibility in their shopping experiences. Small-format stores, including neighborhood supermarkets, mini-marts, and convenience stores, have become key players in meeting these demands.
A recent report by Retail Asia estimates that the small-format retail sector in Southeast Asia is set to reach USD40 billion by 2024, with the Philippines positioning itself as an emerging market for this trend.
The rise of small-format retail in the Philippines is deeply rooted in the country’s “tingi” or sachet culture, which allows consumers to purchase products in smaller, more affordable quantities. These smaller, more organized retail outlets complement the traditional sari-sari stores but offer a more structured, modern shopping experience.
In 2022, the small-format sector in the Philippines reached USD1.5 billion, with significant growth expected in the coming years. Despite this, small-format retail still accounts for just 9% of the market, up from 5% in 2013, with room to grow compared to regional peers like Indonesia, Thailand, and Vietnam, according to a report by the Boston Consulting Group.
However, the sector faces several challenges. The Philippines’ fragmented archipelago presents logistical obstacles that hinder the efficient movement of goods. High inflation and interest rates have further added pressure to operational costs. In particular, disruptions in logistics have been identified as a major challenge for retailers, making specialized and agile logistics solutions essential for unlocking the full potential of small-format stores.
The logistical difficulties stem from the nature of small-format retail, which often caters to residential areas in both urban and remote locations. Standard delivery trucks, typically used for larger shipments, struggle to meet the needs of these smaller stores. The long travel distances, combined with delays and empty return trips, result in higher operational costs and inefficiencies.
To address these issues, Ninja Van Philippines has introduced its “Ninja Restock” service, a tailored logistics solution designed for the growing small-format sector. Ninja Restock uses tech-enabled route optimization to ensure timely deliveries to dispersed locations, including those in hard-to-reach areas. The service accommodates smaller orders, reducing the inefficiencies of full truckload (FTL) shipping and lowering costs by allowing multiple shipments from different customers to share space in the same truck.
Ninja Restock also offers real-time tracking and inventory management, helping businesses maintain optimal stock levels and reduce the risk of stockouts or overstocking. With its flexible fleet, which includes four-wheel vehicles as well as more agile two- and three-wheelers, Ninja Van is able to navigate tight spaces and cater to smaller-volume deliveries efficiently.
For businesses looking to tap into the small-format retail market in the Philippines, partnering with logistics providers like Ninja Van that offer tailored, flexible, and efficient solutions will be crucial for success. Embracing this shift will not only meet the growing consumer demand for convenience but will also help businesses navigate the unique logistical challenges posed by the country’s archipelagic nature, ensuring long-term growth in a rapidly evolving retail environment.
