The "sari-sari mentality"....

Photo from the Sari-Sari story, © 2002 by Jim Richter.

While standing in line in a large chain supermarket near my house a couple of days ago, I quietly observed dozens of carts overflowing with various dry grocery items, like various canned goods, instant noodles, snacks, juices, soaps and toiletries, etc.

Here I was, trying to buy a loaf of bread, a bottle of ketchup, a bottle of seasoning, and some other stuff, surrounded my these massive shopping carts filled with what looked like tons of grocery items. It's obvious that these copious amounts of groceries aren't for personal use. Rather, it's more than likely that these items will be sold in one of the probably thousands of sari-sari stores dotting the Philippine suburban landscape.

Sari-sari is a Filipino term which means "variety". Hence, a sari-sari store can be translated as simply a "variety store". Sari-sari stores are a staple of Philippine life. They're literally everywhere, offering various goods for sale from virtually every street corner and everywhere else in between.

In suburban residential areas, much like the one I reside in, you can hardly walk a few meters without coming across one of these stores. In some places, these stores stand shoulder to shoulder with other similar stores, offering similar goods, and often at similar prices.

Which brings me back to my predicament. I'm stuck in this slow moving checkout line, all because of these sari-sari store proprietors, who are stocking up on goods to sell. I scan the various other checkout counters in the distance. Virtually all of them are lined up with full shopping carts containing similar items.

You know what? I think the typical Filipino is a poor entrepreneur. There. I said it. I just hope I don't get flamed for having a negative opinion of the average Pinoy's business acumen, but hear me out first. The reason I came to this conclusion is the fact that the majority of Filipinos, instead of offering some unique product or service to the community, invariably fall prey to the "me too" style of entrepreneurship. For convenience, let's call this phenomenon the sari-sari mentality.

The sari-sari mentality is a style of entrepreneurship wherein a person, either because of the lack of ingenuity or creativity required to come up with a totally unique business model, or at the very least the refusal to take the financial risk of putting up a unique venture, invests in exactly the same type of business other people have invested in. The side effect? A marketplace awash in similar businesses. Don't bother looking up this definition in some business book. I just made it up.

The sari-sari store is a perfect example, hence the name. What's the point in setting up a variety retail store when there's virtually one almost everywhere? And yet, more and more are sprouting up. The vast majority of these stores probably aren't even licensed to do business by their respective local governments, much less pay taxes.

With so many of them around, do any of them actually make money? Surprisingly yes, though I would imagine the profit margin for such ventures can't at all be that large. The profit in the retail industry can be attributed to volume, and not markup. And small stores probably don't have the capability to deal in huge volumes.

Filipinos, traditionally, seem to be really susceptible to the sari-sari mentality. If you think about it, it isn't really surprising why most successful Filipino businessmen and industrialists are more often than not of foreign descent. They're more likely to make aggressive business decisions, which often pay off in the end. Pure blood Pinoys on the other hand, when it comes to business, typically just play it safe.

We've seen this mentality rear its ugly head before, lots of times. The story typically goes like this: a new and unique business opportunity sprouts up, everyone else gets in the action, there is a saturation of the market, and inevitably the market crashes altogether.

I can think of a lot of businesses which went this way. During the 80s there was the litsong manok (roast chicken) craze. Everyone wanted in on it, leading to an overabundance of businesses wanting to fill the demand. Eventually the craze collapsed in on itself, everyone got tired of eating roast chicken, and today the litson manok industry has consolidated itself into a handful of large chains and a few independent businesses, and outlets aren't even that common anymore.

A few years ago there was the tapioca balls "pearl shake" craze (internationally it's known as "bubble tea"). Same story, everyone wanted in as well, leading to market saturation. Only Zagu seemed to have survived the pearl shake wars, with perhaps Orbitz a distant second. I have no idea what happened to the rest. I guess most of them went under.

And in recent memory there was also the internet café/network gaming fad. These businesses sprouted up like mushrooms after a stormy night, filling a perceived demand for people wanting to surf the net, or virtually kill each other in Counter-Strike and other video games. Yes, the demand was there, but competition became so tough that prices dropped way below the threshold of profitability. Nowadays the large franchises (like Netopia) have dominated the market, while some independent establishments have continued to make their businesses thrive, particularly in niche areas.

I've read somewhere that 99% of businesses fail within the first five years of operation. I'm not really surprised, given the lack of originality in the commercial scene. I too was a victim of that statistic at one point in my life. What can I say? I'm not that hot of an entrepreneur myself. Or maybe I was just associated with the wrong people. Or both.

Let's face it, the "me too" attitude is a very safe and reassuring way of starting up a business, hence its prevalence. The perception is: "Well, if he's making money, I should too." Sadly, it doesn't always end up that way. The market is strewn with the decaying ruins of businesses that wanted to sell what everyone else was selling and not much else.

I just hope that we Filipinos start to be more creative in coming up with commercial ventures. In the same vein, I think we should learn to take more risks in business. Only if we do so can we have any hope of being successful in the market. Sigurista lang kasi talaga tayong mga Pinoy.

And I'm not just talking about the local market. With globalization starting to rear its ugly head, if we don't shape up, we're all going to be eaten alive in the global marketplace. And that won't help our economy at all.

The sari-sari mentality can only take us so far. It's about time we do something different and unique for a change.