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Indian pet care industry analysis


  • Pet ownership has grown multifold in the past decade in India
  • Increasing pet humanization is driving demand for premium pet products
  • Pet ancillary services like pet grooming, pet spa is also gaining prominence
  • E-commerce emerging as new medium for pet products distribution

 

Over the past decade, ownership of dogs, cats and other pets has increased multifold owing to rising disposable income majorly in the middle-class bracket, rapid urbanization and rising nuclear families. Further, in recent times, changing attitude of people towards pets such as humanization of pets and treating them as part of family have led to a record double-digit value growth in ownership of pets. Currently there are ~23 million dogs and ~4 million cats as pets and cared-for pets in the country with 600,000 pet adoptions happening each year, which present a huge potential for pet care industry in India, especially the pet food segment.

Pet care industry includes sale of pet food (nutritional and medicated), pet care products (veterinary care, supplies/OTC, medication etc.) and pet accessories as well as services (pet grooming/boarding, live animal purchases etc.). Pet food is the major segment in India covering more than half of the market revenues and is expected to grow at a CAGR of 13.9% (2018-2020) (source: Pretex), while pet accessories, grooming and healthcare are growing rapidly in the urban and elite markets.

Although, Indian pet care industry occupies only a fraction (< USD 0.8 billion) of the global industry (valued at USD 190.1 billion in 2018), it is amongst the fastest growing markets with projected CAGR of ~17.0% (2018-2024) vis-a-vis global projected CAGR of 5.2% (2019-2025). (source: Global Market Insight and Euromonitor)

With the saturation of pet care markets in North America and Europe, Asia (especially India) is witnessing entry of major international brands. Pet care market in India is largely unorganized with consumers gradually accepting the thought that pets require different food (against the conventional, made for humans) for better nutrition and growth. This is leading to increasing usage and acceptance of branded accessories and grooming amongst others. In the branded food segment, the market is currently dominated by 3 players, Mars International, Royal Canin and Indian Broiler Group accounting for over 65% of the market share in terms of value. The industry is in expansion stage with a number of Indian brands Provimi Animal Nutrition India, PetSetGo and Bharat International Pet Foods also scaling-up to meet the increasing demand and grab a pie of the expanding market. These developments have also led to the emergence of a number of pet startups like Petsworld, Dogspot, Heads Up for Tails, Nimble Wireless etc. in recent years.

With the increasing number of pet owners, the opportunities for the professionals have grown multifold. Few of the notable trends in the Indian Pet care industry have been analyzed in detail below.

  1. Growing opportunities with the rise of Pet Ownership: In India, dogs are more popular pets (~85% of the total) than other animals like cats, birds, fish, etc. Globally, India has seen the highest percentage growth in dog population in 2012-2017, registering a sturdy 77% CAGR (as compared to -3% in US and UK). Country’s pet care industry has historically been driven by strong dog food sales growing at a CAGR of over 21% (2013-18). In more recent times increasing humanization trend is also aiding the growth in cat ownership in the country, which is further expected to drive demand in the near future.
  2. Premiumization: Pet owners in India belong primarily to upper or upper middle-class families. With rising disposable income, humanization trends and rising health and wellness awareness, pet parents are now more conscious of the kind of products they buy and are increasingly looking for premium and natural offerings for their pets, which has drastically narrowed the gap between pet food and human food. To capitalize on this, pet food manufacturers are offering premium products that are gluten-free, GMO free and rich in high-quality vitamins and minerals, with increased health benefits like dog food with Omega 3 and 6 fatty acids for healthy skin, probiotics in dry formula to help maintain digestive health, glucosamine for healthy joints and strong bones etc.
  3. Growing Demand for Ancillary Pet Products: The growth of the pet care market is largely determined by the evolving mindset of pet owners, who are willing to go an extra mile than to restrict buying just food. More & more people are willing to spend on other pet products in order to give a good environment for their pets. This has triggered the opening of newer pet services from salons & spas to sophisticated services such as end of life services (Palliative services for terminally ill pets, pet cemeteries and cremation, grief consulting etc.). There has been an increase in number of foodservice establishments, such as restaurants and cafés, which are becoming pet-friendly, with some even hosting special events and pool parties for dogs. Further, technological advancements have seen a rise of smart pet products such as GPS-enabled tags, leashes and smart feeding machines as well as cameras that help the pet owner to connect with their pets when they are away from home.
  4.  
  5. Increasing Brand Presence through Pet Stores: Pet stores have remained the go-to channel for Pet care products. These stores offer a wide range of premium products, including pet food, personalized pet products and many also offering pet grooming services. Secondary brands like Arden Grange, Hill’s Science Diet, Farmina and Scientific Remedies etc. have gained popularity by selling through leading pet stores.
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  7. Diversification of Distribution Channel: The pet care industry now generates a major source of its income from pet products offered both online and offline. E-commerce is seen as a major potential growth driver for the industry. Convenience and options to choose from a wider assortment (with recent inclusion of premium offerings as well) over the internet on platforms such as PetPals, Flipkart, BigBasket, Amazon etc. are likely to drive online sales in near future. Further, mass merchants and grocery stores are adding premium pet foods and other pet products which has led to more points of distribution than ever before. The trend is increasing in tier2 and tier3 cities as well, with Mars International and Royal Canin increasing their retail presence in these cities.
  8.  
  9. With Indians welcoming more "paw" buddies supplemented by pet humanization trend among pet parents, demand for branded premium offering will likely fuel growth over time. The younger generations are especially embracing this phenomenon and regularly take their pets to veterinary clinics to have their animals checked out and to take advice on healthcare and dietary supplements. All this has led to many domestic companies such as Indian Broiler Group, Cuddle Up Diet Products etc. to step-up their game and give tough competition to the foreign players. In coming few years, India is also expected to become a major exporter of pet related products and accessories. The competition is only expected to be heated up going forward, but the market is also expanding, hence Televisory believes that the growth momentum in the Indian Pet care industry would continue over the short to medium term.

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