The pet care industry has enjoyed strong revenue growth and has been growing dramatically, with a number of countries witnessing higher than ever pet ownership and spending. While UK and USA have long been the leaders of the world pet market, (revenues of $14.5bn in USA in 2011), a number of countries are emerging as global pet forces with which to be reckoned. Instead, a report from about.com states that, worldwide sales of pet related products and services reached $81 billion in 2010, despite of the global recession.
Pet store in India is set to continue to register a double digit retail value growth in 2012.
What are the possible reasons for this growth? Rising disposable income? Is it increasing awareness of the dietary needs of pets and the benefits of pet food? Or is it that consumers are in search of companionship?
Rising disposable income:
Pet care grew at a rate of 24% in current terms in 2011. As the spending power increases, consumers are more likely to trade up premium pet care products and specialized products and even shift from homemade food to prepared food.
When we consider the middle and low-income consumer segment, they still feed their pets’ table scrap or homemade food. Though there was a noticeable increase in the portion of the prepared food consumed by cats and dogs over a period. For example, prepared dog food as a proportion of dog food consumption rose from 1.1% in 2006 to 1.4% in 2011.
The rising disposable income is one of the major factors relating to the growth of the pet care industry, as it is also driving sales of non-food pet products such as pet healthcare products and pet dietary supplements for their strong growth.
The rising disposable income will result into a better financial position which would then encourage pet ownership. This would even lead to greater demand of pet food and other pet products. As the trend evolves over the years, urban consumers would shift to premium products like pet grooming kits and training equipment which would result into increased business for the pet store industry.
Search for companionship:
When we consider the most popular pet in India, dog wins the race, followed by cats. In 2011, the population of dogs was over 9 times that of cats and 14 times that of other pets. As consumers view dogs, and sometimes cats as companions, they give these pets human-like treatments, such as grooming services or buying them prepared food. So this leads to increased sales.
With the trend of greater humanization of pets, pet owners would be more interested in understanding their pets and meeting their needs, including their healthcare, dietary needs and personal grooming.
Health and Wellness Products:
As already stated above, pet owners have started being more concerned about their pet’s needs and health. For example, they have been showing more interest in organic pet food or DHA-enriched pet food, as they are aware of the benefits of the same.
Pet dietary supplements, a significant category with pet products, grew by 18% in 2011. This is because in urban areas, there is a growing demand for products that provide skin care, digestive aids, immunity enhancement and weight management. Most of these products are made for cats and dogs because of the simple reason that many urban pet owners treat cats and dogs as family members and would not hesitate to spend on products that would maintain their pet’s health.
Noticing the changing trends, the manufacturers would make efforts to educate the consumers about the functional benefits which would boost the volume sales.
More Segmentation and Functionality in Premium Pet Food:
The pet food offer has seen increasing specialization in the last few years. This trend is the most evident in premium dog and cat food. We can notice, many major players have developed a variety of functional products, by either launching extensions of existing brands or creating entirely new product lines. So differentiation attracts new consumers as well as is a driver for current consumers. The ongoing humanization trend will continue to drive demand for specialized and functional pet products.
Lucky dogs: pet owners will invest in premium products as disposable income rises, IBIS World.
Pet Care in India, Datamonitor
Pet Care in India, Euromonitor International, December 2011
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