Merges Business

Profile: Mark Ruiz Merges Big and Small Business in the Philippines

A can of sardines inspired Mark Ruiz — a middle-class, well-educated Filipino from Quezon City, just outside Manila — to begin his road to social entrepreneurship.

Shortly before leaving a seven-year position at Unilever in 2006, Ruiz, now 35, had been reading micro-finance guru Muhammad Yunus’ book “Banker to the Poor,” which had a strong influence on him. He’d also kept in his head a memory of an overnight “immersion” trip he’d done in high school, where he was assigned to spend a night with a poor family of six in a ramshackle concrete and wood home in a resettlement development for urban squatters in Manila.

“Since I was a visitor and they knew I was from a good school and from a middle-class background, they wanted to offer their best, and their best was rice. And because I was there, they had to open a can of sardines just because I was there. A can of sardines. On a daily level I don’t even think about it.”

Now, Ruiz’s life is all about getting household staples like cans of sardines, soap and instant coffee — along with more critical supplies, like medicine — to small household shops in the outreaches of his country.

To American ears, the words Ruiz uses when he talks about his venture may sound something like the language of Wal-Mart or Amazon.com. He talks a lot about streamlining product distribution and inventory management. But his customers are much smaller-scale, culled from the hundreds of thousands of Filipino women who run little household goods shops from their homes while their husbands are working in the fields or factories. Their shops are called sari-sari stores, and they’re everywhere in the Philippines.

Photo courtesy of Hapinoy.

Ruiz’s enterprise, technically named MicroVentures but marketed under the brand name Hapinoy (a combination of “happy” and “Pinoy,” a colloquial word for Filipino), is a combined for-profit/nonprofit venture that Ruiz founded five years ago with a former high school friend, Pablo Benigno “Bam” Aquino to help boost these women’s incomes.

Until September, Hapinoy’s for-profit distribution and market-research arm was selling these women basic goods like instant coffee and shampoo — products similar to what Ruiz was selling when he was a Unilever executive scouting these women as potential sellers for that company’s line — at a discount.

This fall, though, Hapinoy partnered with a new investor, a larger for-profit company, Tao Corp, to bring these kinds of products to the stores. That left Ruiz and Aquino able to focus instead on marketing more humanitarian products to the sari-sari stores: over-the-counter medicine kits, solar panels that charge cell phones, and an electronic service that lets Filipino workers abroad transfer remittances over the telephone.

Alongside the distribution company, Ruiz and Aquino also have been building a nonprofit sister organization to help teach these rural shopkeepers better inventory, cash flow and customer service methods.

Although he’s always had a social goal, Ruiz said business has been foremost for him. “To be frank, I didn’t set out to start a nonprofit — the concept really was it had to be a business,” he explained. “We wanted to force ourselves to have a certain pressure; and, also, because we wanted to be able to raise investments down the road, [we knew]that would have been tricky if we’d been a nonprofit. We wanted it to be a business to force ourselves to find a way to make it sustainable.”

To make it sustainable, Ruiz developed what he says is a better way of distributing consumer goods to small villages: the company finds a woman in a village willing to be a “redistributor” of Hapinoy’s products for her entire village. The company then sends its products only to her, and she distributes them to the other village shopkeepers. “Rather than going to every single small store, we create a level of these mothers to be the distributors in the villages,” Ruiz said. “Previously, if you wanted to visit all of these stores … to make sure that you’re stocked, you would have to go to all of the hundred small stores.”

There are more than 160 of these women distributors now, each serving at least 100 sari-sari stores in their villages of 5,000 to 10,000 people. And “aggregating” all the shop owners into groups has made it easier for other distributors to reach them.

Despite the company’s successful, profit-making emphasis, Yunus’ influence is still front and center.

“All I knew is that whatever [the business]would be, it would fundamentally, at its core, have a mission to help people, and that should never be compromised.” He didn’t know, at first, there was name for this, but, “Lo and behold, a couple of years later, people said that that’s a social enterprise.”

The nonprofit arm of Hapinoy now has a staff of eight and has trained more than 1,000 shopkeepers. It has received funding from the United Nations and Coca-Cola among other entities, and it recently partnered with the Philippine government’s Department of Social Welfare and Development to offer further training.