Philippine retailers may be navigating rapid changes brought by AI, new sales channels, and shifting consumer behavior, but strong fundamentals remain critical to building businesses that can scale, according to corporate venture capital firm Kickstart Ventures.
Speaking at the 32nd National Retail Conference and Expo (NRCE) 2026, Kickstart Ventures General Partner Joan Yao said technology and market trends may evolve, but the characteristics investors look for in sustainable businesses remain largely unchanged.
“Technology evolves, trends come and go, but the fundamentals tend to stay the same,” Yao said.
With the Philippine retail market forecast to reach USD 64.99 billion by 2031, businesses are increasingly looking for ways to adapt to emerging technologies while maintaining sustainable operations.
Yao identified four recurring traits among companies positioned to scale: community-driven growth, channel fluency, operational leverage, and cash flow discipline.
1. Build growth around communities
Yao said strong companies build relationships with customers around shared values rather than relying solely on transactions.
A strong community allows businesses to stay closer to their customers, understand their needs, and respond more quickly as preferences change.
She cited Edamama, an e-commerce platform for baby and maternity essentials, as an example. Its parent community has helped shape the company’s private-label products, demonstrating how customer feedback can influence product development and turn trust into demand.
“The channels may change, but the core message of what the brand stands for has stayed the same—and this really resonates with people,” Yao said.
2. Stay fluent across channels
As consumers move between online and offline shopping, businesses also need to adapt to the different channels customers use.
Smartphones accounted for the majority of e-commerce sales in the Philippines in 2025, while many Filipino online shoppers continued to visit physical stores to inspect products before completing their purchases online.
For Yao, this makes channel fluency an important indicator of whether a company can respond to changing consumer behavior.
Rather than treating online and physical retail as separate experiences, businesses need to understand how customers move between platforms and meet them wherever they choose to shop.
3. Use technology to improve operations
Growth also needs to come with greater efficiency.
Yao highlighted operational leverage as another key characteristic of businesses capable of scaling. Companies that can increase their output while improving efficiency demonstrate that their business models can handle rising demand without costs increasing at the same pace.
As AI and other technologies become increasingly accessible, businesses can use these tools to improve processes and productivity. However, the underlying objective remains the same: building operations that can support sustainable growth.
4. Maintain cash flow discipline
Finally, Yao emphasized the importance of cash flow discipline as businesses expand.
Managing inventory, receivables, and margins effectively helps companies maintain sufficient liquidity for day-to-day operations while keeping capital available for reinvestment.
For investors, disciplined cash flow management can also demonstrate whether a business has the financial foundation needed to sustain growth.
Fundamentals still matter in an AI-driven market
AI may be changing how retailers operate and how consumers shop, but Yao said businesses should not lose sight of the fundamentals while pursuing new technology and growth opportunities.
For companies looking to attract investment and scale, building strong communities, adapting across channels, improving operational efficiency, and maintaining financial discipline can provide the foundation needed to navigate a rapidly changing market.
The message from Kickstart Ventures is straightforward: technology can accelerate growth, but strong fundamentals determine whether a business is ready to scale.
