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Analysis on the Present Situation of Pet Industry at Home and Abroad

Update:13 May 2017
Summary:

When the economic crisis swept the world, the major com […]

When the economic crisis swept the world, the major companies have layoffs, the US pet industry to achieve total consumption in 2008 increased by 4.9%. This makes people realize that as long as the direction can go against the market.

"Motorola global layoffs 3000 people", "global home appliance chain retailers Best Buy 1000 global layoffs", "HP global layoffs 24000 people", "Citigroup layoffs 52000 people" ... ... When these voices floating in the world, the financial crisis The pet industry and the retail industry in the pet food and supplies industry can be confident that: "Just go to the direction, we are in the direction of the United States pet industry in 2008, the total consumption of 4.9% Will be able to wind up.

From the world's largest integrated pet supplies retail and service chain - PetSmart development process, "big shop" + "e-commerce" has become the pet food and supplies retail industry's most effective business model. At present, domestic pet food and supplies chain enterprises, with more than 1,000 square meters of chain stores much, and very few will be "pet business super" concept interpretation of a good big shop.

First, the domestic pet retail industry development status:

Pet food and supplies retail industry business coverage: pet food and snacks, supplies and drugs, pet hospitals or clinics, pet trading, and foster care, including other pet services.

Pet chain stores in accordance with the area from large to small, the category of goods from simple to complex can be divided into six categories: warehousing, supermarkets, small retail stores, convenience stores, self-employed retailers, e-commerce.

In the current Chinese market environment, pet food and supplies retail industry is still in the emerging stage. Since 2007, many international authoritative consumer market research institutions began to pay close attention to the Chinese pet industry. A survey shows that China's total pet in the 1999-2007 8 years increased by nearly 500%, according to incomplete statistics, China's current pet dogs, cats and other types of pets in more than 200 million, by 2015, the The number will reach 500 million. In 2008, the pet industry's annual output value of about 20 billion yuan, the annual growth rate of more than 30%, accounting for about 60% of the world's share, the transcripts are mainly benefited from China's pet supplies industry chain is complete. It is estimated that by 2010, the annual output value of the pet industry will reach 40 billion yuan.

International experience shows that when the country's per capita GDP reached 3,000-5000 US dollars, will lead the country's pet market into a period of rapid development, the eastern part of China's eastern coastal areas per capita GDP has reached the above standards; international pet industry data show that pets The economy accounts for 6% of the country's total GDP, 3% -4% in Europe, and 2% in Japan, compared with 0.4% in China. With the rapid development of China's economy and the continuous improvement of the concept of people's consumption, will provide opportunities for the rapid development of the pet industry, and is bound to lead to pet economy boom.

In the current global "financial crisis" has not faded the environment, the pet retail industry how to find a road with their own success, is worth every interested in the development of the industry to pay attention to, to think, to explore of. Fortunately, the mature US market for the Chinese pet enterprises to provide the most worthy of reference for the successful business model.

Second, the US pet industry status:

US pet supplies industry association survey shows that the United States in 2008 the pet industry total consumption of about 43.2 billion US dollars, the past 15 years to achieve a total growth of up to 154%, is expected in 2009, the figure will reach 45.4 billion US dollars, an increase of 5.1% The In the past decade, the use of the Internet to query the number of pet information owners increased significantly, the proportion of the total number of searches from 5% in 1998 rose to the current 27%, and all peters have said that through the online shopping for pets Selection of supplies and care products, and choose to supermarket stores and large pet stores to buy pet food and supplies of pet people accounted for only 76%. The late 80s of last century, the United States pet food and supplies chain enterprises to 200-300 square meters store-based, less commodity categories, small size, and in the late 80s encountered growth bottlenecks; the early 90s, there have been PetSmart and Petco As a representative of the super-large-scale store business, to lower prices, more choices and greater traffic to protect the sales and profit growth.

In 2008, the total consumption of the pet industry in 2008 was $ 2.1 billion for the purchase of pets, spending about $ 16.8 billion for pet food, spending $ 10 billion on supplies and drugs, and $ 11.1 billion for veterinarians , Other services similar to beauty, boarding and other expenses of about 3.2 billion US dollars. In 2009, the total consumption of the pet industry will reach $ 45.4 billion, of which people will spend $ 2.2 billion on pet live purchases, $ 17.4 billion in pet food consumption, and $ 10.2 billion in supplies and drugs , The cost of the veterinary surgeon will reach $ 12.2 billion, and other services may cost $ 3.4 billion, similar to beauty and boarding.

The above data show that the US pet food and supplies retail industry in the past 15 years to achieve a faster and more stable growth, also experienced from March 2000 to March 2003 lasted 3 years of the Internet bubble , As well as by the 2007 subprime mortgage crisis caused by the global large-scale financial crisis. This shows that the pet food and supplies retail industry has a strong ability to resist risks.

Third, PetSmart's development process:

PetSmart was founded in 1987, the mid-development with VC investment boost, has now become the world's largest integrated pet supplies retail and service chain. The initial 2,300-square-meter PetFood Warehouse store has created a new concept for the pet food and supplies retail industry to deliver products to consumers in large quantities and low prices and to extend this model to the nation. Between 1989 and 1993, the US economy was in the financial crisis triggered by the 1987 stock crisis, which lasted for five years. In such a large environment, PetSmart launched a warehouse-style shopping district with the traditional retail store model with the expansion of the way, rapid expansion in the country, the competitors have not yet seized the market before the first layout for the success of PetSmart laid the foundation , PetSmart's annual sales growth rate from 1989 to 15.9 million US dollars in 1991 to 58.2 million US dollars in 1990, the company already has 29 stores, the average area of each store covers an area of 2,500 square meters, with 7,500 kinds of goods The In 1992, the company's revenue reached $ 106 million, and for the first time to achieve $ 400,000 profit, in 1993 the company's revenue reached $ 188 million, net profit of $ 2.4 million, and successfully in NASDAQ initial public offering, a pet chain industry's first listed company The

In 2007, PetSmart operating income of $ 4.7 billion, an increase of 10.4%; by 2008, operating income reached $ 5 billion, an increase of 5.4%, net profit of about $ 200 million, a total of 1112 chain stores; The United States the history of the most serious financial crisis in the context of contrarian up. During this period, PetSmart's strategy was to provide one-stop service in all offline stores, including perfect foster care, training, beauty services and food and supplies retailing, and distribution of approximately 900 square feet of space in stores Dedicated to providing high-quality beauty services, including bathing, beauty, pet teeth and nail polish. In 2008, PetSmart's pet services, including foster care, training, and beauty, achieved a 15.8% year-on-year increase of $ 5.3 billion, or 10.4% of total revenue. PetSmart's merchandise sales accounted for 89.6% of total revenue, of which consumer goods sales accounted for 57% of sales revenue, durable goods sales accounted for 40% of sales of goods, pet transactions accounted for 3% of sales revenue.

PetSmart is mainly in the business of large stores to provide a wide range of commodity categories and continuously reduce the price to beat the opponent, with the supermarket model of high turnover and low margin characteristics. Store back with a simple way to sell pet food, pet accessories displayed in front. In addition, the store also set up beauty, foster care and medical centers, these are ordinary pet chain can not match. It is precisely because PetSmart has adopted a large store policy to enrich the products and low prices to meet user needs, supplemented by e-commerce to meet the growing needs of online shopping customers in the context of the financial crisis, still maintain strong growth.

Fourth, the domestic pet food and supplies industry situation:

From PetSmart's successful experience and US industry statistics, the pet retail industry's best strategy should be supermarket store-style big store strategy with online sales, online and offline combination of one-stop service. Traditional community convenience store, although able to facilitate the user to buy, but because the store can place the goods is limited, resulting in incomplete product category, usually only high-end products with high gross margin, but this product only 10% of the entire market, Users need more is in the low-end products, resulting in low market share Supermarket store type of large stores to provide customers with more complete product category, not just to enlarge the size of the store is really from the customer needs to start, according to the pet type and size of the different picking and category management, but also Can provide more detailed and more professional services, reduce unit costs.

At present, China's pet food and supplies retail industry is the purchase channel through the national distributor, regional distributor, dealer, and then reach the business process, the process takes a long time, and the links are varying degrees to improve the merchant ultimately sold to customers of goods price. And operating a large store chain because of a one-time large purchase, unified purchase and then the deployment of the stores, which can directly with the national distributor and even manufacturers, deduct the intermediate links, so as to effectively control costs, to provide customers with lower price.

Throughout the current domestic pet food and supplies chain enterprises, with more than 1,000 square meters of stores in the chain of small, and very few will be "pet business super" concept interpretation of a good big shop. In August 2009, Le pet holdings of the "pet supermarkets" slogan to attract the attention of all, Le Chong in Beijing CBD lots to establish a 2500 square meters of "pet business super", in the super to provide customers with Including pet food and snacks, supplies and drugs, pet clinics, foster beauty services, pet trading, including all-round services, can be described as the first domestic pet store model precedent. Le pet holding mainly e-commerce + line shop as the main line, also has a purebred dog club, often carry out and undertake some dog show. Music pet shop is the current inventory of 100 times the store, and the cost is only 2 times the store, usually a new store opened to 3 months to achieve break even, and large stores as long as the income reached the store Of 1.5 times to ensure breakeven. Le pet holdings in the CBD business district to establish "business super" is to use the core business district of the huge radiation capacity driven by a large number of passenger flow, to enhance the single store business income, get rid of the control of the pet chain industry development "bottleneck" to provide customers with large quantities , Low prices of goods and quality of the train service.

Pet consumer industry is an emotional consumption of the industry, pets in the minds of people occupy the status of more and more heavy, when the financial crisis in the violent beat the hearts of people, the pet into their more lonely, sustenance of psychological Object, the pet is no longer just a simple animal, but a member of the family, so customers of goods and services will be more demanding quality requirements, emotional consumption even more powerful. The pet industry, "big shop" model, with the best model will be products, services and customer feelings very good together in the together, reduce the price, reduce the cost of the amount of goods and other elements instead of the second place, become icing on the cake The factor. Therefore, drawing on the successful mode of the United States, conform to the development trend of the industry, help China's innovation pioneer, "big shop" model will become a new round of domestic pet consumer industry competition for the high ground, the new comparative competitive advantage will be unfolded.

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