Domestic pet food companies embark on the road to rise

  Recently, the performance and stock prices of pet food companies have shown a "bright" moment.

  Public information shows that in the first half of the year, China Pet’s revenue was 1.59 billion yuan, an increase of 26.42% year-on-year, and its net profit increased by 4.88% year-on-year; Petty’s revenue was 846 million yuan, an increase of 18.93% year-on-year, and its net profit increased by 37.21% year-on-year.

The share price of Yuanfei Pet, which has just landed in the capital market, has doubled; the share price of China Pet and Petty has also risen sharply in recent months.

  The "2021 White Paper on China's Pet Industry" shows that in China's urban households, the number of pet cats is 58.06 million, and the number of dogs is 54.29 million.

Under the "pet trend", the scale of China's pet economy industry has grown rapidly.

Among them, the pet food track is particularly prominent in the entire pet industry.

A Bain research report predicts that by 2025, the size of China's pet food market may reach 150 billion yuan.

  The 100 billion yuan market has also attracted more and more companies to enter the track.

  For a long time, imported brands have become the preferred choice of many pet owners for their high regulatory standards, good raw materials, and stable quality control.

Foreign-funded enterprises represented by Mars and Nestle Purina are increasing their presence in the Chinese pet food market.

  In 2020, Purina, a subsidiary of Nestlé, spent 600 million yuan to expand the pet food production capacity of its Tianjin factory; in 2021, it will increase its capital by 230 million yuan to lay out the high-end and ultra-high-end pet food industry chain.

At the same time, overseas high-end brands have more and more ambitions to enter the Chinese pet food market, and many imported high-end brands represented by Desire and Peak have flourished in the Chinese market in recent years.

  With the rapid growth of market demand, domestic pet food brands have increasingly entered the attention of consumers.

A large number of new brands have opened up the market with high cost performance and stood out with novel e-commerce traffic play.

  In 2017, Petty and China Pet, which started as OEMs for overseas brands, went public successively; this year, Loos was promoted to the “No. 1 Pet Food Stock” on the Beijing Stock Exchange, and production companies such as Good Treasure and Fubei are also lining up to submit IPO applications.

According to Tianyancha data, there are more than 1.049 million pet food-related enterprises in my country, and the number of registered enterprises in 2021 will exceed 740,000.

  Capital has also begun to pay attention to the domestic pet food market.

According to public data, from 2021, there will be more than 70 investment and financing events on the pet track, including nearly 30 pet food projects.

After 2022, the pet food industry will once again enter the "little spring", and Bernard Tianchun, Meat Pad, Dou Chai Pet, etc. have successively obtained financing.

  The rise of e-commerce has provided opportunities for domestic brands.

According to Euromonitor data, from 2013 to 2021, the proportion of e-commerce channels in China's pet food market has increased from 10.1% to 45.4%, and it will reach 61% in 2021.

  However, competition in e-commerce channels has brought extreme "involution".

Many pet food companies are actively or passively involved in the "price war" of e-commerce.

Deformed competition also makes domestic pet food appear shoddy, raw materials, product deterioration, mixed with foreign objects and other chaos.

  It is understood that in the first half of this year, the National Consumers Association received 6,617 pet complaints, a year-on-year increase of about 89.17%, of which pet food safety has become the main issue of consumer complaints.

  It can be said that food safety has become a "lifeline" for the development of domestic pet food.

The standard is not perfect, and the lack of strict and powerful industry standards has become the main constraint.

Some industry experts have called for the formation of mandatory national standards and regulatory norms in terms of production, processing, and quality testing.

  Although there are still gaps with imported products in many aspects, from the current stage, domestic pet food is embarking on the road of rise.

As more and more domestic pet food brands continue to emerge, the supply chain tends to be homogeneous, and competition will become increasingly fierce.

Whether it is product research and development, production control, or channel layout, they have become the hurdles that new brands cannot bypass in their development.

Whoever can solve the above problems may have a favorable position on the track.

  Yang Ranran