With a growing pet population and rising disposable income of pet owners, the pet industry in the country is proving that it is not all bark and no bite
Six months ago, when Divya Sanbhwani opened her 2,000-square-foot All Ears Training and Socialising Centre in Mumbai, only two dogs were part of the pet playschool. Today, around 10 dogs spend their day at the centre.
Just like an actual playschool for kids, it offers report cards and hosts parent-teacher meetings to help pet parents understand their dogs’ progress graph. Sanbhwani also organises outings at the beach, off-leash meet-ups at dog parks, and even dog birthday parties where humans and canines can have fun together.
While some find this cute and others ridiculous, the fact remains that services like day boarding, individual training, personalised accessories and doggie dabbas are no longer alien concepts.
As the number of pet parents, who will leave no stone unturned to ensure their four-legged lovelies are cared for, goes up, companies, like Sanbhwani’s All Ears Training and Socialising Centre, are making a beeline to fulfil their needs and reimagine new ones.
While pets have always been part of many Indian households, people would not formally call themselves pet parents. That, until the pandemic struck.
Pegging the number of pets in the country at approximately 11 million in 2019, canine trainer Nitika Ahlawat says, "Recent market studies show that this has grown to approximately 30 million as of July 2022, which is a 172 per cent increase in a little over three years."
Ahlawat notes that the pre-pandemic pet care industry was clocking roughly 16 per cent CAGR but during the recent rounds of investments in some pet care companies, the estimated growth rate of the industry was said to be around 35 per cent CAGR for the next three years.
The trend of welcoming a pet home during the pandemic led to a growing demand for pet-oriented products and services. A key aspect pushing this demand was also the humanisation of animals, where people consider pets an integral part of their family. An increase in disposable income is the other driving force.
"The biggest reason for the growth during the pandemic has been the need for companionship, especially amongst the Gen Z crowd. With a critical mass of people having pets, this is encouraging more people to adopt," says Varun Sadana, co-founder of Bengaluru-based pet care start-up Supertails. While the market currently has a larger proportion of dogs in this mix—about 60 per cent—cat parenting is growing at a much faster rate, he adds.
Sakshi Chopra, managing director of Sequoia India, which has invested in pet care brand Heads Up For Tails (HUFT), believes that the sector is largely a supply-constrained market with latent demand.
“Pet parents have the intent to spend but lack high-quality choices, especially in the non-food categories, which are dominated by unbranded or lesser-known brands. Companies like HUFT have addressed this gap by providing access to the finest range of products,” she opines.
The emergence of a new discerning and quality-conscious consumer set sees pet care as a strong reflection of their own personality, thus fuelling almost 100 per cent growth in some categories, says Rashi Narang, founder, HUFT. While she says that there is no documented estimation of pre-Covid growth rates, the current growth rate, if marked against the category growth, is estimated at around 20 per cent annual recurring revenue.
Sadana believes it boils down to the parenting style. Chalking the basic spend, he says that it can be around Rs 1,000 to Rs 2,000 monthly if the pet is fed home-cooked food and upwards of Rs 4,000 if it is on a packaged food diet. This does not include the amount the newer generation of pet parents is willing to spend on accessories, toys, training, grooming, socialising or even travelling.
Pet owners in Tier I cities tend to pay higher and buy premium products, says Ahlawat. "The average monthly expenditure could range from Rs 8,000 to Rs 12,000 per month, depending on the breed and the level of humanisation of the pet in the family," she points out, adding that Tier II cities are fast catching up with the current average monthly expenditure there being in the range of Rs 4,500 to Rs 6,000.
Irrespective of the city, a new pet owner generally has to spend anywhere between Rs 20,000 and Rs 50,000 in the first year on essentials like vaccinations, beds, medicines, leashes, collars, bowls, etc. Post pandemic, with many pet parents shifting to a hybrid or on-site work environment, they are likely spending an additional Rs 5,000 to Rs 12,000 monthly to leave their furry friends at kennels.
When it comes to the pet care ecosystem, pet food remains the fastest growing vertical but other categories like pet couture, lifestyle, dietary supplements, walk gear, grooming, litter, treats, and even pet transportation and pet-friendly hotels have emerged quickly. Many of these are also a result of pet parents finding a lacuna in the space and taking steps to fill it themselves.
For instance, the idea of A Dog's Story, a chain of pet-first hotels, germinated after hotelier Himmat Anand was once frustrated with hotels’ 'pets not allowed' policy while planning a holiday with his family, including his labrador, Jugnu. Today, Anand’s chain has hotels in Agra, Corbett Country, Jaipur and Mussoorie where parents and their pets can discover open spaces and even dip in a swimming pool. They also have a special Wags Menu for their four-legged guests.
Pet travel is another space that has been witnessing increased traction. Aamir Islam, the managing director of Gurugram-based Carry My Pet, a start-up which provides pet transportation and relocation services for people travelling overseas, claims to have witnessed 15 to 20 per cent growth in pet travel since 2021.
"The pet travel or relocation sector was completely unorganised and lacked someone offering transparent, affordable and trustworthy services. With more people travelling with their pets, we expect 15 per cent growth in the coming years," he says.
Sequoia’s Chopra cites global studies that show that spending on pets tends to rise sharply when GDP per capita hits around $4,000. “India is forecasted to hit this number over the next five to six years. With increasing pet adoption and spending by pet families on their furry children, the pet market in India is estimated to see accelerated growth,” she adds.
Barring the pet food, accessories and even the salon category, the pet industry has been characterised by the presence of small independent players.
Narang states that almost 70 to 80 per cent of the food and medicines/supplements categories is organised. The remaining categories are a blend with only 15 per cent organised players making their presence felt.
The existing industry has been built on the back of large brands like Pedigree, Royal Canin, Whiskas, etc., while the smaller, newer brands and start-ups created niche scales within subcategories. No indigenous pet food start-up has been able to scale up massively in India till now.
There is also potential to disrupt other areas like training and grooming. Sadana estimates that while are many sub-categories exist in India today, once the primary needs mature, the fledgling sectors will get the required push, especially in urban cities.
Interestingly, big FMCG brands are turning their sights to the sector as well. A case in point is Nestlé India. In 2018, the company set up a new entity, Purina Petcare India to foray into this sector with the Supercoat pet food brand.
In June 2022, Emami invested in Cannis Lupus Services India, a start-up offering Ayurvedic remedies for pets under the 'Fur Ball Story' brand. Talking about the deal, an Emami spokesperson said, "Since we are into manufacturing and marketing of mostly Ayurveda-based products, we found a synergy in the business of Cannis Lupus Services India. Our investment in this start-up is in line with our strategy in the FMCG space." As a strategic investor, Emami would not be involved in the day-to-day business but will offer support as and when required to grow the business.
Chopra feels that the emergence of the FMCG players in the space will help increase shelf acceptance at modern trade and standalone stores, and fuel awareness in the category.
The entry of larger corporates is also expected to make the nascent pet industry more organised and give local brands a fillip. Explaining this, Sadana says, "All brands in India are mostly foreign based and import led, which leads to supply constraints in the industry. This forces customers to keep switching between brands. Entry of these well-known brands can bring in credibility and consistency in supply."
Small businesses in this space will take some time to scale up but they are likely to grow along with the rise in the country's pet population.
Supertails, for instance, has already seen a considerable surge in veterinary and training consultations with close to 20,000 consultations in a year. It estimates this to become a $150-million market soon.
To attract a broader swathe of consumers, companies are focusing on education and awareness through strong digital strategies and more personalised shopping experiences. Newer channels of growth will mostly be led by digital distribution with social commerce leading the way.
Some, like HUFT, have also successfully complemented product sales with services like grooming and medical consultation under a single roof. This has gotten the attention of investors. Last year, HUFT raised $37 million in a Series A funding round led by Verlinvest, Sequoia Capital India, Amitell Capital and existing investor W&C PetTech. The company had previously raised $13 million.
In 2021, Mars Petcare, which owns pet food brands like Pedigree, Whiskas, IAMS and Temptations, announced its plans to invest Rs 500 crore to expand its Hyderabad pet food factory to meet the growing domestic demand and to export to various Asian markets.
Sequoia’s Chopra maintains that pet care is well suited for a vertical commerce play that is omnichannel. “Pet parents often seek quality supply and advice in choosing products that are right for the age, stage, season and breed of their pets, making specialty retailers with curation, content and advisory a great shopping destination. This creates a golden opportunity for specialty retailers like HUFT,” she says.
When asked whether a unicorn will arise in the sector, Chopra opines that given the market tailwinds, the emergence of a dominant player in this space is a question of when and not if.
For now, start-ups and larger brands are busy rushing to pamper the post-pandemic burst of puppy love driving growth in India's pet care industry.