It is said that the offline business of the pet industry is "difficult", of course, it is the dilemma of the entire offline ecology. At a time when there is both desire and skepticism for the offline market, this report may be able to clear the first gap in the fog and allow more pet industry people to get a glimpse of the "Next Level" of the pet industry.
In a myriad of things, it is always necessary to start with the most basic information channels - just like the help that tools such as business advisors bring to e-commerce operations. Offline channel operation naturally needs a more powerful grasp and landing point.
In the context of the current digital economy, the importance of data, as the core element driving the leap in industry productivity, is also being put in the forefront. The first "Pet Entrepreneur Index" (pet store version) report recently released by Pet Industry helps users understand industry trends and gain insight into development prospects through data.
In the past few years, this report is a scientific index of China's pet store market, which has been established by pet industry experts in the past few years, covering hundreds of thousands of store data, exploring the sample database covering thousands of pet stores, researching thousands of pet stores, and establishing analysis data covering nearly one million pet commodity SKUs, in order to provide more guidance and reference for practitioners who pay more attention to the offline pet store market.
On this basis, the pet industry observation will also conduct a series of in-depth interpretation and analysis of the content of the report from different dimensions. This issue is the first issue of a series of interpretations, mainly focusing on the revenue of pet stores in super first-tier cities and possible development opportunities. (Note: Super first-tier cities refer to the top 5 cities in the country with relatively high net value of pet market value and pet store ownership in the region during the monitoring period, namely Beijing, Shanghai, Guangzhou, Shenzhen, and Chengdu)
The details are as follows:
#01
Nearly 10,000 pet stores in super first-tier cities
It contributes to about 1/5 of the country's revenue
The report pointed out that as of Q1 2024, the number of pet stores in super first-tier cities is 9,583, accounting for 11.94% of the number of pet stores in the country. The number of pet stores contributed nearly 12% of the comprehensive revenue in the first quarter of 2024 was 1.158 billion yuan, an increase of 24.51% year-on-year, accounting for about 18% of the national pet store revenue.
If this data does not seem intuitive, then if these five cities are placed in a comprehensive sample size of 691 cities in Chinese mainland, it may be possible to conclude that the "Next Level" of pet stores is hidden in super first-tier cities.
Why? Because these highly representative data have shown that super first-tier cities may be a better window to observe the format of offline pet physical stores.
Specific to the dimensions of each super first-tier city:
- The revenue of the Beijing regional market in Q1 was 277 million yuan, an increase of 17.59% year-on-year, and the revenue contribution of a single city accounted for 4.50% of the national comprehensive market;
- The revenue of the Shanghai regional market in Q1 was 293 million yuan, an increase of 39.99% year-on-year, and the revenue contribution of a single city accounted for 4.76% of the national comprehensive market;
- The revenue of the Chengdu regional market in the first quarter was 156 million yuan, an increase of 21.84% year-on-year, and the revenue contribution of a single city accounted for 2.53% of the national comprehensive market;
- The revenue of the Shenzhen regional market in Q1 was 308 million yuan, an increase of 33.73% year-on-year, and the revenue contribution of a single city accounted for 5.01% of the national comprehensive market;
- The revenue of the Guangzhou regional market in Q1 was 121 million yuan, a year-on-year decrease of 3.36%, and the revenue contribution of a single city accounted for 1.97% of the national comprehensive market;
One of the interesting points is why the combined market revenue and average single-store revenue of Guangzhou and Chengdu are significantly lower than those of Beijing, Shanghai and Shenzhen, which are also super first-tier cities.
There may not be a standard answer to this question. However, in the view of pet industry observation, the difference in the cost of living and the pace of life between cities may be one of the key factors. For example, Beijing, Shanghai, and Shenzhen are typical fast-paced cities, and not only are consumers generally making faster purchase decisions through offline channels, but also operating costs such as rent and manpower are generally higher, resulting in stores having to be more involuted in order to survive in the local market. This has also forced stores in Beijing, Shanghai, and Shenzhen to have higher standards for ping efficiency and human efficiency, and their operating GMV and average revenue have also shown a better level.
Comparatively speaking, the pace of life in Guangzhou and Chengdu may be slower, and the pressure and cost of all aspects of operation are relatively smaller, which ultimately leads to a more obvious difference in the market.
On the other hand, the trend of pet store chain operation in various super first-tier cities may be another key factor. In the context of the fast-paced social environment and the digital era, consumers expect pet stores to achieve standardized service processes and one-stop demand satisfaction, which has had a huge impact on the business model of traditional mom-and-pop stores and community stores, and has driven the chain operation of pet stores to become the main trend in the development of offline terminal store channels.
Pet Industry Observation has also mentioned before that the integrated and standardized business model of chain pet stores is conducive to the centralized consumption of pet owners, thereby saving the transportation time caused by the separation of single service consumption, and can also ensure the quality of pet services, so that consumers can harvest stable service expectations. The core advantages of chain pet store brands with a larger average single store scale and generally richer commodity retail channels and service experience can also attract and drive consumers to actually spend in stores.
Specifically, Beijing, Shanghai and Shenzhen are undoubtedly deeply in line with the general trend of business chaining. For example, the head chain pet store brand Pet Home has taken Beijing, Shanghai, and Shenzhen as the basic market, and continued to increase the layout of chain stores.
However, in Guangzhou and Chengdu, where some "lag behind", mom-and-pop stores and community stores still occupy most of the market size, so that not only the comprehensive market revenue, but also the single-store turnover has opened a big gap.
#02
The average single-store turnover is 108,000
What is the difference from other city stores?
According to the report data, pet stores in super first-tier cities will achieve an average single-store revenue of 108,120.24 yuan in the first quarter of 2024, an increase of 20.1% year-on-year. In the same period, the average revenue of pet stores in other regional cities was 70,863.82 yuan.
In other words, pet stores in super first-tier cities have an average of about 30,000 more revenue per store than other regions in a single quarter. Among them, there are different factors such as the income and consumption power of users in different tier-level cities; On the other hand, the difference in the average unit price of cleaning and beauty services in super first-tier cities may also be the main reason for this situation.
From the report data, it can be seen that the average revenue of a single store in super first-tier cities in terms of commodity retail is not significantly different from the revenue of other regional cities in the country, and even the revenue of many sub-categories is lower than the average revenue of the national market market. For example, pet medical care, pet health care, and more subdivided pet food categories such as dog food.
The market factors behind this are also worth considering. In the view of the pet industry, on the one hand, the price power impact brought about by the changes in online channels, live broadcast e-commerce and other channels may have a greater impact on pet stores in super first-tier cities, which is based on the characteristics and portraits of pet owners in super first-tier cities.
On the other hand, the population density of super first-tier cities and the high growth of the regional economy not only give more pet stores room for survival and development, but also allow consumers to have more choices, resulting in more fierce market competition.
Specific to the dimensions of each city:
- The average single-store revenue in the first quarter of 2024 in the Beijing regional market will be 139,331.32 yuan, an increase of 17.68% year-on-year;
- The average single-store revenue in the first quarter of 2024 in the Shanghai regional market will be 147,357.76 yuan, an increase of 40.08% year-on-year;
- The average single-store revenue in the Q1 quarter of 2024 in the Chengdu regional market will be 78,434.45 yuan, an increase of 21.96% year-on-year;
- The average single-store revenue in the Q1 quarter of 2024 in the Shenzhen regional market will be 154,903.52 yuan, an increase of 33.95% year-on-year;
- The average single-store revenue in the Q1 quarter of 2024 in the Guangzhou regional market was 60,962.01 yuan, a year-on-year decrease of 3.59%.
The revenue flow that generally exceeds the national average also involves another dimension of insight: the operation of pet stores with an annual turnover of more than one million. According to the data, the number of pet stores with an annual turnover of one million in super first-tier cities is 772, accounting for 8.05% of the 9,583 pet stores in super first-tier cities. It can be said that on average, for every 12 pet stores in super first-tier cities, there is 1 terminal store with an annual turnover of more than one million.
As for more details of the million stores, the pet industry observation will be specifically analyzed in the next in-depth interpretation. For more information about the report, please click "Initial Release | Pet Industry Index: The number of pet stores and retail sales declined, and the revenue of beauty washing services rose sharply" Read more.