The pet business shows its claw in e-commerce

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Large businesses that participate in the pet market and entrepreneurs of all sizes have taken advantage of the boom of a million-dollar industry that does not slow its growth in the face of any economic circumstance.

Pets have become one of the protagonists in the consumption of food, clothing and all kinds of accessories. Both large companies and newcomers to the market are ready to take advantage of the momentum that the coronavirus pandemic gave to this business. Players get their grip on the physical world and e-commerce.

The estimated value that the sales of the pet care or pet care industry would reach in Mexico during 2021 is 2.455 billion dollars, which represents significant growth if compared to 2016 when this figure was just 1,664 million dollars, which represents a growth of 47.5%. By 2025, it is expected to grow by 27.2%, according to data from Euromonitor International.

In Mexico, 57 out of 100 households have a pet. Among the various companion animals, 85% correspond to dogs, which represents 19 million of these animals, according to information from the National Institute of Statistics and Geography (Inegi). An opportunity to grow in the business.

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Tila. Photo: © Fernando Luna Arce

E-commerce became one of the great impulses for the sale of products and services of the friends of home. Only in Mexico, the pet care category in e-commerce had a growth of 792.3% in the 2015-2020 period, explains Euromonitor International.

In addition, in April 2020, 5% of people who made purchases for the first time on the Internet chose pet products, while, in June and October of that same year, the percentage was 3%, says the “Report 5.0: Covid-19 Impact on Online Sales in Mexico ”, prepared by the Mexican Online Sales Association (AMVO).

Likewise, 10% of those surveyed in April last year ranked the category of pets among the top products and services to buy, which placed it among the top eight preferences.

This is the story of a steady business, promising bigger players and growing profits for firms, no matter their size.

He gets dog

The Petco supermarket chain has been one of the companies that turns around adverse conditions through electronic commerce and the renewal of its sales channels.

“The pandemic made us more efficient across all channels, and so did our customers. Being locked in on the issue of the pandemic, they had different needs and are now looking for omnichannel. We are serving the client how they want, where they want, and when they want, ”says Alejandro Ahuad Goya, CEO of Petco Mexico.

Petco is a company from the United States, which opened its first branch in Mexico on January 24, 2013, through a temporary strategic association (joint venture) with the Mexican conglomerate Grupo Gigante.

The president of Grupo Gigante, Ángel Losada Moreno, and its CEO, Federico Bernaldo Quirós, highlighted Petco’s growth in their last annual report. “Petco’s performance was exceptional during 2020, with sales growth of more than 30% in physical stores and more than 100% in digital commerce.”

The Losada family, Grupo Gigante’s majority shareholder, is ranked 28th on the Forbes Mexico “Millionaire List 2021”, with an estimated fortune of $ 1,040 million, which represents a growth of 7.2% compared to 2019.

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Thannos. Photo: © Fernando Luna Arce

In general, Grupo Gigante registered total revenues, in 2020, of 26,276 million pesos (mp), while, in the previous year, it registered 32,445 million pesos, which represents a 19% drop for the company.

The pet firm’s sales had an increase of 35% during 2020, compared to the previous year. 30% of e-commerce sales were made through the Petco App.

“We also reported excellent results through the ‘Petco Easy Buy’ program, where we obtained a 168% increase in our sales, as well as a 30% increase in online sales participation from the ‘Petco App'”, says the latest report Grupo Gigante’s annual financial statement.

The firm witnessed how consumers migrated from physical sales to electronic commerce, despite the fact that these types of pet stores did not lower their curtains, since they were considered among those that carried out “essential activities”.

By 2021, Petco plans to conclude the year with the opening of 12 stores, to reach a total of 108 new branches. In addition, the company will allocate part of its investments in infrastructure to strengthen its technology and consolidate omnichannel.

Alejandro Ahuad Goya is satisfied with the effort of his team and the performance of the market. “The one who works the least here is me, and I can’t take many flowers, because those who do everything are on my team,” says the manager, with a smile, in front of the results.

But not only large chain stores take advantage of the good run in business. Entrepreneurs have a story to tell.

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Pet entrepreneurs

Four years ago, Fernanda Rodríguez discovered that she could start in the pet business and founded Collar Pet, a firm that markets artisan collars for dogs.

Two years before starting out, the young Mexican woman bought two woven bracelets and decided to join them to form a necklace for her pug dog. This is how the search for someone who could materialize the production of this article began since it was a terrain that had not yet been explored. However, the costs were very high.

A few months later, during a vacation in Chiapas, Fernanda met José, a native of Chiapas who put her in contact with the artisans of the region, to discuss her idea with them. With a small investment and the trust of both parties, the development of the first collars for pets began.

The pieces made from a piece of leather and a handmade fabric began to be sold in bazaars in Mexico City, but consumers also began to request straps for necklaces, as well as bibs. Then, new models were added to the offer of the entrepreneur.

In addition, the young veterinary graduate also created a brand of knitted products for people, called Kanava, which offers camera straps, bags, hats, and T-shirts. However, Collar Pet is still the favorite brand among consumers.

“Pets are already part of our family. We have the other brand, which is part of us [Kanava], and people would rather buy a collar for their dog than take a bag for themselves. This market grew a lot ”, assures Fernanda.

But the health contingency due to the SARS-Cov-2 coronavirus would bring favorable surprises for the Collar Pet business. “The pandemic helped us a lot,” says Rodríguez, speaking of the momentum that the products had in the national territory, and also abroad.

Today, Collar Pet ships products to Spain, the United States, and El Salvador. The firm has an Internet page to market its merchandise and takes advantage of social networks to spread its offer among pet lovers.

The entrepreneur has decided to show the value of artisan products from Mexico, which may require up to 12 hours to make in the case of braided pieces. This has been a way of taking advantage of the pet market and promoting the work of national artisans.

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Victory. Photo: © Fernando Luna Arce

The main challenge is to meet the growing demand for the products and have the capacity to produce the parts in high-demand seasons, as has been the case in the days of the pandemic. In addition, it has managed to enable payment by electronic means through the Mercado Pago platform, since people request this type of tools due to the ease of transactions.

“The pandemic helped us … too much,” says Fernanda Rodríguez, whose products are marketed in a range that goes from 260 to 600 pesos.

Collar Pet’s sales growth has reached levels above 50%. This “Made in Mexico” for pets is not the only case of entrepreneurship in the business.

Mónica Juárez is a veterinary doctor and her specialty was anesthetizing horses. However, the pandemic caused her to change her career path, as the job shortage led her to think about new businesses.

Thus, he devised a canine aesthetic and installed it in the backyard of his house. In addition to haircuts and grooming in general, it offers various accessories. The space is called The Barkbery. and it is located in the State of Mexico.

The substantial change in their business was the payment of services through bank cards and promotion on social networks, to sell their products or services.

“I am already hesitating to return with the horses […] It has been a very good turnaround and I liked [the venture],” says Mónica Juárez.

Currently, the business has allowed him to install two operating rooms in different locations to care for pets that require service in the community, in addition to offering dog walks.

The challenge for pet businesses is to generate trust among users and professionalize the services of the field, says the entrepreneur.

Monica’s plans are focused on continuing in the pet market and formalizing the creation of an entire clinic to provide new services, such as pet psychology, for example, in addition to opening an additional branch. “All this has a lot of growth and potential to exploit it,” says the veterinary doctor.

Juicy growths

Express shipping companies have also taken advantage of the momentum of the pet market, both domestic and foreign. One of those firms is the startup Dostavista, which has increased the delivery of products during the confinement season.

The delivery express firm has registered a 500% growth in the number of shipments of products and pet food within Mexico City and the Metropolitan Area so far in 2021, and it is expected that, at the end of this year, you can record a cumulative advance up to 1,000%.

“We had to be on the side of the coin, where we grew a lot […] People and companies are becoming professional in the field of electronic commerce, and before [the pandemic] that did not happen,” says Iñaki de la Peña, Country Dostavista Manager.

This company, founded in Russia in 2012, has focused on developing a technological platform for logistics and parcel shipping, which competes with iVoy in the country.

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Lukas. Photo: © Fernando Luna Arce

In May 2017, Dostavista landed in Mexico and has taken the opportunity to grow with e-commerce in the country’s capital and Guadalajara, Jalisco. The Covid-19 pandemic allowed it to achieve historic growth.

The firm’s promise is to deliver within 60 minutes, while the average in Mexico City is around 45 minutes. Its times have allowed this startup to be attractive for the delivery of products in the pet market.

“From 2019 to 2020, we quadrupled the number of users in the animal category,” says De la Peña, who is convinced that categories such as food will grow in the coming years. Some pet care companies that collaborate with Dostavista are Petco, LEA & BO, Señor Dog, La Farmascota, UNAM Banfield Veterinary Hospital, and Vet & Pet’s Pharma, among other brands.

“It is an industry that is growing a lot, and we are increasingly adopting ‘doggies’; we see them as part of the family. And all this trend, guided towards premium food and serving them in a better way, has made that niche explode, ”says Iñaki, speaking of an industry that does not stop and pull out its claws.

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Source: forbes.com.mx

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