case study

Hapinoy:
Building Local Business Networks

Initiative Description

In April 2013, Hapinoy joined the

Business Call to Action with a
commitment to create an innovative
and inclusive distribution network
of independently operated
convenience stores for over-the-
counter medicines and healthcare-
related products in marginalized
communities in the Philippines.

Hapinoy’s goals: Business Model

Very often rural communities have
• Educate and train more than
Over 30 million Filipinos live in limited alternatives and access
10,000 store owners by 2015
poverty.2 While the Philippines has to the products and services they
• Ensure that at least 20 per cent an efficient healthcare system in need. The Hapinoy programme
of the store network distributes place, it is not accessible to many will help us expand awareness of
and sells over-the-counter low-income communities or remote basic preventative healthcare at
medicines and healthcare- areas. Hapinoy’s commitment to the community level. It will also
related products by 2015 and the Business Call to Action seeks to allow individual owners to begin
40 per cent by 2020 reach this underserved population to attract new customers and
by partnering with existing sari-sari expand their offerings and value
• Ensure that over-the-counter
stores, convenience shops that are proposition.
medicines and healthcare-
common even in the remotest areas,
related products comprise at
to provide over-the-counter medicines Erika Tatad,
least 5 per cent of sales by Managing Director of Hapinoy1
and healthcare-related products to
2015
those who need them most. There
• Reach over 200,000 community are an estimated 1,000,000 sari-sari
residents and to provide stores in the Philippines, representing
greater access to healthcare- 35 to 40 per cent of total retail sales.
related goods and services The ubiquity of these micro-retail
during this period outlets provides a readily available
infrastructure to deliver affordable
and essential goods and services to
vulnerable populations.

1. Hapinoy. Retrieved 10 September 2013 from: http://hapinoy.com.

2. Santa Clara University’s Global Social Benefit Incubator. (2011). “Hapinoy: Empowering sari-sari store
owners to better serve poor communities.” Santa Clara: Santa Clara University, Center for Science,
Technology, and Society. http://www.scu.edu/socialbenefit/resources/upload/hapinoy_web-quality.pdf.
Empowered low-income women
entrepreneurs (“Nanays” which
means Mothers in Filipino) operate
these local franchises. As part
of its efforts to reach vulnerable
populations, Hapinoy has recently
integrated Health Hubs in select
stores, in which over-the-counter
medications are sold by Nanays
trained in basic healthcare
provision. Working in 160
communities and growing, Hapinoy
franchises have the potential to
create systemic transformations
both for and by those at the base of
the pyramid (BoP).

Hapinoy’s mission is to develop

a robust inclusive business
programme with the sari-sari stores Hapinoy’s Business Model
at its core, seeking to develop highly
skilled and empowered micro- How it Works Hapinoy provides training to Nanays
entrepreneurs by providing them on best practices in business and
with the necessary tools and skills The Hapinoy programme begins by finance then links them to goods in
to build a sustainable business and giving Nanay the training needed their area, providing a more affordable
generate impact at the community to run her business more efficiently and diverse product range for the rural
level, to give micro-entrepreneurs and acquiring tools that better store poor. Challenges include the difficulties
access to value-added inputs (e.g. operations. This education and training Nanays face in recording data about
capital, training and new business component runs for a period of sales and inventory levels. Training
opportunities) and to develop a approximately ten months. modules have been developed to focus
platform for channelling goods to on topics such as keeping track of daily
the community level in the most By the fifth to sixth month, Nanays who expenses, profit and credit thresholds.
rural areas, with a preference for would like to expand their business The programme also facilitates access
social impact goods. have the options of accessing more to loans (as a result of a partnership
capital through any of Hapinoy’s with the Center for Agriculture and
microfinance partners. Rural Development) so as to support
and eventually expand store operations.
MicroVentures also sources high-impact
products and services, then offers them Under Hapinoy’s Health Hub Initiative,
Innovations to Hapinoy Stores, which are owned
and operated by a Nanay, who earns
the programme has since extended
training to Nanays regarding the
a daily gross salary of at least Php500 appropriate provision of supplied
(USD 11). A number of these stores healthcare products and they now
that improve lives serve as hubs, like a micro-distributor
or wholesaler to approximately 30 to
serve as a vital source of health
information for their client base. The
100 smaller Hapinoy sari-sari stores in Health Hub model is based on the same
the surrounding area. Moreover, they Hapinoy business model used for selling
act as a focal point for information and basic consumer goods. MicroVentures
opportunities for the community. procures branded over-the-counter
medicines from Unilab, a leading
Hapinoy empowers Nanays by providing Filipino pharmaceutical business, and
education and training, capital and new distributes them to Community Stores.
business. Medications are dispensed in smaller
units (i.e. per pill instead of per bottle),
allowing for greater accessibility.
The regulatory framework regarding medicines by the piece (as opposed to
Hapinoy’s vision is built on the
medicine distribution has proven the full quantity as would be prescribed
idea of a Filipino community with
restrictive to the role that retail outlets, by a doctor). To mitigate identified
thriving and sustainable micro-to-
like sari-sari stores, can play in supplying challenges, Hapinoy has instituted a
small businesses at the grassroots
over-the-counter drugs. In a study training module on the correct use of
level. It envisions a community
conducted by the Center for Health antibiotics that includes discussions
where basic goods are accessible
Markets Innovation, research found on the regulatory issues at hand in
and more and more services that
that prescription drugs, particularly order to raise awareness amongst
improve the quality of life are
antibiotics, were being sold illegally in Nanays. MicroVentures fully adheres
efficiently delivered to even the
some sari-sari stores. The misuse of to regulations and does not distribute
most rural of areas.
antibiotics is particularly problematic, prescription medications to Hapinoy
especially since sari-sari stores offer Community Stores.
consumers the opportunity to buy

Results Achieved

Hapinoy has trained 1,300 women her business (e.g. through increased access to finance and to promote
store owners as of December 2012 and inventory, a combination of new gender equality and empower women.
introduced Health Hubs in selected goods and services, the acquisition of
areas, and, through its Business Call to productive assets such as a delivery The company has made it a priority to
Action, seeks to reach 10,000 more by vehicle, etc.), she may be referred to train Nanays in business management,
2015 with training for health-related a lender that best suits her purposes. personal development and the care and
products and services to better serve Nanays may also be introduced to new provision of products. This approach
vulnerable and remote communities. businesses (such as medicines, solar promotes long-term sustainability
solutions or mobile-based services) that both for the sari-sari stores and for
Business Impact can generate further revenue. the communities they serve. Such
Hapinoy focuses on developing capacity actions also promote inclusion of
among Nanays, emphasizing business Since the programme’s inception, sari- populations living at the BoP, fostering
sustainability and profitability. The sari stores have witnessed a marked entrepreneurial spirit and building local.
programme allows Nanays to develop improvement in business practices,
valuable sales strategies (e.g. record including: As of 31 December 2012, the
keeping, marketing and customer • 20 per cent increase of average programme has graduated 1,300
relations). During monthly meetings, a daily sales of over 80 per cent of women from its training programme.
group of 10 to 20 Nanays gather at one Nanays Through increased income from their
of the Hapinoy Stores in their group businesses, Nanays are better able to
• 57 per cent decrease of average
to learn about various mechanisms support their children’s education and
daily product loss by family
to ensure proper store management afford healthcare for their families.
members without proper inventory
through training modules. Hapinoy Nanays that take part in the programme
• Overall decrease in average daily have been shown to: gain higher self-
seeks to introduce higher margin and
credit Nanays extend to her esteem and self-worth; explore new
higher value goods and services to rural
customers businesses and market opportunities;
communities through sari-sari stores.
This brings added revenue to Nanays • Higher credit rating by independent provide others with employment
and creates access to essential goods microfinance institutions stemming opportunities as their own businesses
and medicines. from better management habits grow; involve family members in
managing their business; make goods
Hapinoy provides Nanays with the within reach of their community both
Development Impact
opportunity to expand business in terms of availability and affordability;
Through this initiative, Hapinoy is and assist other micro-entrepreneurs in
operations, depending on local market addressing Millennium Development
needs. For example, by the fifth to structuring their own business systems.
Goals 1 and 3 to end poverty and
sixth month of the programme, if a hunger by strengthening opportunities
sari-sari storeowner wishes to expand for business growth and providing
Key Success Factors Achieving Scale
Next Steps and
Sustainable Business Model A key driver of success in the Hapinoy
model has been the development of a
Spin Off Effects
Hapinoy provides one of the only
opportunities rural entrepreneurs sustainable supply chain through a hub
have to scale their businesses, and spoke system that has transformed
assisting small producers with product a hitherto unaffiliated network of stores Working towards achieving
development, quality control, packaging into an effective distribution platform its Business Call to Action
and operational support required to for the poor. By managing the chain commitments, Hapinoy plans to
scale-up production. The meaningful and coordinating product distribution, educate and train more than 10,000
inclusion of all stakeholders in the Hapinoy reduces costs to store owners sari-sari store owners by 2015,
design and implementation of the and their customers, thus having the reach over 200,000 community
Hapinoy programme is one of the potential to raise incomes for all. A residents and to provide greater
project’s key success factors. For strategic partnership with RiteMed access to healthcare-related goods
example, the Health Hub Initiative is now under way in order to expand and services.
included workshops that were the portfolio of healthcare products,
organized with the project team, extending into advocacy, affordable Hapinoy also aims to ensure that
strategic partners and Nanays so medicine and services. at least 20 per cent of the store
as to co-develop all aspects of the network distributes and sells
programme. This included consultation over-the-counter medicines and
and collaboration on merchandizing, healthcare-related products by
the assortment and pricing of goods 2015 and 40 per cent by 2020, and
and the education event launching that these medicines and products
the initiative. comprise at least 5 per cent of sales
by 2015.

Challenges include the difficulties

Nanays face in recording data about
sales and inventory levels.3 Training
modules have been developed to
focus on topics such as keeping
track of daily expenses, profit, and
credit thresholds.

3. Center for Health Markets Innovation. (2013).

“Hapinoy Healthcare Hub Case Study.”
http://healthmarketinnovations.org/sites/
healthmarketinnovations.org/files/Case_Hapinoy_
Chapter%20Health%20MVI%20v3.pdf.

Contact the Business Call to Action

E: [email protected]
T: +1 212 906 5695
www.BusinessCalltoAction.org
This case study was written by Samantha Young from
the Business Call to Action.