Image source @ Visual China
Text | Morgan Channel
The layout has a cause and effect, and the giants have no waste.
According to the Tianyancha APP, Tencent invested in the integrated service platform Pet Home after investing in pet service brand Pet, becoming the second largest shareholder.
Ali also attaches great importance to the pet business, Tmall said in the new fiscal year plan, to upgrade the pet category to a first-class industry, in the next three years to build the pet industry into the second Tmall beauty. JD.com followed, announcing that it would incubate more than 50 first-tier new brands within a year. Midea has created two pet brands, and Xiaomi has also invested in the pet smart hardware brand "Cats, Cats, Dogs and Dogs".
As the market grows with a growing pet economy, the entry of giants further affirms the market value of "its economy". But how big is the potential of the pet economy, and how to diversify profits, perhaps even the giants are in the exploration stage.
<h2>The industry threshold is low, but it is difficult for enterprises to become a barrier to competition</h2>
With the improvement of residents' income and the upgrading of consumption concepts, pet breeding has become an important window for the improvement of residents' quality of life. The "empty nesters" and the Dink group have increased dramatically, and the emotional needs have also driven a significant increase in the demand for pets.
In the "big situation", standardizing the pet industry, encouraging the development of domestic brands, and raising the threshold for foreign access have stimulated many domestic enterprises to devote themselves to the pet industry, and indirectly promoted the application and innovation of related technologies in the pet industry.
Returning to the status quo of industry development, although many Internet giants have poured in, the competitive pattern of the domestic pet industry has not yet emerged. Whether it is an established company or a new giant, everyone is working hard to broaden the boundaries of the pet industry.
Ai Media Consulting has characterized the pet market as a potential market, and it is estimated that by 2023, the market size of China's pet industry will reach 592.8 billion yuan. iResearch is relatively conservative, and it is expected that the domestic pet market will reach 445.6 billion yuan in 2023, and the difference between the two data is nearly 150 billion.
The core of the difference in forecast data is that the analysis models of the two are very different, taking into account different levels of interference factors, and the data gap reflects the uncertainty of the pet industry.
In the current pet industry, the upstream of pet trading lacks scale effect, with many participants and low market concentration. When consumers buy pets, they have a certain resistance to third-party sales channels.
For example, the incidence of pets in dog and cat houses is much higher than that of domestic breeding, and consumers have a greater risk of purchasing. While The pet home in which Tencent has invested increases consumer trust through offline stores, JD.com is the main online brand, trying to hatch an online brand that is deeply trusted by consumers.
Offline heavy capital but low reliance costs, while online saves the cost of opening stores, channels and other costs but the cost of trust is higher. Regardless of the model, pet trading belongs to the segment of fine slow growth. Similar to the upstream, the downstream of the pet industry also shows a phenomenon of too low concentration, the market is seriously fragmented, and there is a lack of head companies trusted by consumers.
The competition in the middle of the pet industry chain is relatively fierce, and it is also a field where large factories gather, especially pet smart products with a sense of science and technology.
Smart hardware is Xiaomi's strength, in 2019, it invested in the pet intelligent hardware brand "cats, dogs and dogs", mainly in the smart feeder and pet water dispenser. Midea launched "Cat Gravity" and "Fluffy & Floppy", which mainly laid out cat water dispensers, air purifiers and cat air boxes. Two traditional home appliance brands compete with emerging brands such as Xiaopei and UNIPAL to compete for a small market share.
Although the market size of pets is growing at a high speed and the trend of high-end pet products is prominent, due to the low completion of smart products at present, it is still in the stage of simple functional "stacking". Pet supplies coupled with "simple" intelligence have become pet smart supplies.
For example, the cat feeder, for consumers, the function of its demand is automatic feeding, but its price can be as high as 799 yuan. Consumers' demand for cat toilets is not to endure the smell of shoveling, but the price is as high as a few thousand yuan, and its function in addition to automatically collecting and storing cat, monitoring the frequency of cats going to the toilet has become a product selling point.
However, this is not a phenomenon-level need that is particularly concerned about the shoveler. Therefore, pet smart products are also considered by a large number of shovelers to be "IQ tax", when consumers have doubts about the function of a product, then the scale of this product is difficult to expand quickly.
Similar to the cosmetics industry, limited technical ingredients have led to the inability to form barriers to competition, resulting in a large number of inferior products flooding the market. Technology can not break through or can not find new user needs to "pile" product functions, can only open up the gap with inferior products through marketing and other means. The market as a whole presents the contradiction that high intelligent products "suppress" consumer demand.
<h2>Under the trend of high-end, the demand for shovelers is suppressed</h2>
The pet industry is an inevitable trend towards high-end, and after developed countries have entered the mature period of the development of the pet industry, high-end has become the most important driving force. However, the future trend is not equal to the current demand, the development period has not yet passed, and it is not necessarily a good thing to enter the high-end too early.
Although the effect of millet-style "explosive marketing" of small profits and high sales on the brand is very significant, it is suffering from the current intelligent demand for pet supplies by domestic shovelers who have not been completely liberated, and it is difficult to sell more than thin profits. For example, Xiao Pei's low-cost cat water dispenser, its low-end products rank first in the Taobao water dispenser category, but its sales in the face of a large cat group, the results are not outstanding.
In the field of pet supplies, the current domestic market presents a high-end phenomenon of high-end driving low-end. Establish a brand image through the high quality and high safety of high-end brands, and promote the volume of low-end products.
The business logic is not too much of a problem, but creating a high-end product is not a one-time thing. And before the brand image has been deeply rooted in the hearts of the people, the high price has suppressed the demand for shovelers, which is not conducive to the rapid development of the industry.
The current pet smart products are still high-end consumption, and there is not much added value of the product, which belongs to a hammer transaction. There is no structural paradigm of human intelligent products pulling the whole, or the millet-style "enthusiast" phenomenon, safety and product quality are the main driving forces for consumers to accept the premium. For example, Porky Pet, which has a market value of 424 million, has its main revenue from product sales and a single revenue.
Not only in the field of pet smart products, the main focus of consumers in the field of pet food is also quality and safety. The quality of domestic brands is questionable, the industry has no qualitative standards, the phenomenon of shoddy brands is serious, and the collapse of consumers buys more expensive imported products or more expensive domestic brands.
Xiao pei pet belongs to a well-known brand for consumers, and its brand effect of high reputation for many years has quickly become one of the current head enterprises, which is welcomed by capital.
However, it is such a big brand that still has product quality problems, and the phenomenon of leakage of pet water dispensers and stuck grains often occurs. In April this year, Xiao Pei Pet also clarified the fire caused by the water dispenser on the official Weibo, saying that its own products were no problem and was caused by indoor voltage surges, but some consumers did not pay for this explanation.
In pet medical treatment, the phenomenon of chaotic pricing is serious, and it also suppresses the needs of consumers. The whole presents the phenomenon of autonomy of minor diseases, lack of awareness of physical examination, and having to go to major diseases. As for pet insurance, the shoveler is still in the stage of "medical food and housing" for pets, the living foundation is still not guaranteed, and the demand for insurance is naturally suppressed.
The concept that low prices and domestic products are equivalent to inferior products has been deeply rooted in the hearts of the shovelers for a long time, and it is difficult to dissipate. With strong funds and large-scale operation, large factories can indeed quickly become big brands in the pet industry that has not yet formed a competitive situation. However, whether it is a traditional large manufacturer or an emerging brand, it is not only facing the problem of how to establish a brand image, but also to jointly reverse the problem of consumers' prejudice against domestic products.
How to break the ice and liberate the suppressed demand of shovelers, perhaps marketing is the way to go.
<h2>Can emotional marketing guide shovelers to release demand? </h2>
Its own strength is insufficient, can not find a breakthrough, and eventually develop into a marketing-oriented enterprise, which is a conventional trend for new domestic products, but how to choose the marketing direction is crucial.
In the field of cosmetics, Perfect Diary is on fire, and its main weapon to break the blockade of the foreign beauty brand market is not product quality, but marketing, a marketing that leads the trend and drives the emotions of the Z era. There are also similar companies in the pet industry, such as Ah Fei and Badi, which mainly focus on cat food, and have gradually sold well on e-commerce platforms in recent stages.
Similar to The Perfect Diary, Ah Fei and Badi also started as a foundry. The fast-growing industry does not lack new brands, but a brand that can impress users and gain recognition. Slightly better than domestic counterparts, packaging appearance on the line, compared to the imported product volume of large discounts, and marketing, are the main reasons why Ah Fei and Badi can sell well.
Compared with cosmetics, the pet industry is more suitable for emotional marketing, because emotional marketing fits the core needs of the shoveler: the release of loneliness and emotional sustenance.
"Cloud pet sucking" has become a new content marketing hotspot in recent years, and those who do not have the conditions to raise pets have obtained the inherent demand of "pet raising" by watching other people's pictures and video sharing, and even resulted in a phenomenon-level cute pet KOL.
At the same time, the shoveling official inscription hall has also become an important place for the public to "suck pets", and the Ai Media Information Survey shows that the consumer satisfaction of the 2021H1 China Pet Museum is 90.4%. In foreign countries, pet training, surrogate breeding, walking, pet photography, pet funerals and other forms can already be planned and operated.
As can be seen from these phenomena, consumers are willing to spend time and money on them as long as they can meet their core needs. To some extent, the pet economy is essentially an extension of the "lonely economy", so for enterprises in the pet track, the shaping of perceptual brand value will become an effective means to build corporate brand barriers.
Marketing on the basis of satisfying consumers' emotional sustenance and strengthening the cultural malleability of pets may be able to further improve consumer acceptance of emerging products. The addition of cultural attributes can not only blur the premium space, but also increase consumers' awareness of the brand, so that the shovelers feel warm and intimate from products and services is the "ultimate magic weapon" for user retention.
However, marketing is only a means, and excellent products are the core competitiveness, in order to obtain unlimited possibilities in this new blue ocean of "its economy".
At present, the domestic pet economy, whether it is a user or the market needs a slow and difficult cultivation process, although the advantage of giant entry is large, but in the uncertain pet market, down-to-earth enterprises are more likely to explore a sustainable development path.