Gifts / Sports & Toys

In the overseas market, pet smart products belong to a relatively "roll" category, and even there is an interesting phenomenon of losing money at home and making money abroad. Pet products enterprises, such as cat climbing frames, which focus on high customer price, have also opened the brand's way to sea.

Import and export data show that financing events are relatively concentrated in the fields of smart home appliances, pets, clothing and consumer electronics. How can pet shipping brands win the favor of capital in 2022? In 2022, when the dividend of the epidemic fades away, is there any chance for pets to go to sea at the track?

1. From feeding back the domestic market to branding

The long-term dependence of domestic pet enterprises on the overseas market is due to the late start of the industry itself. Zhou Huipu (alias), an investor who is paying attention to the export of pet brands, said that "more of the overseas information learned will be fed back to the Chinese market".

However, the domestic pet industry has been developing rapidly in the past ten years. According to the Huacheng Import and Export Data Observation, the pet market growth rate reached 57.9% in 2011. After ten years of development, the domestic pet market growth rate will still reach 20.6% in 2021.

In the primary market, the investment and financing situation of pet track has also continued to rise in the past decade. In China, there are 1.1035 million enterprises in operation/existing with the keyword "pet". From the perspective of investment and financing, from 2011 to 2020, there were 358 investment and financing events in China's pet track, with an amount of more than 11 billion yuan. Huacheng Import and Export Data Observation reported.

In 2021, there were 42 financing cases in the domestic pet industry, and the disclosed financing amount was more than 3.1 billion yuan. From the perspective of the total financing amount, compared with 49 financing cases in the domestic pet industry in 2020, there were 7 fewer financing cases in 2021 than in 2020, and the disclosed financing amount was 4.4 billion yuan less. The enthusiasm for capital in 2021 fell slightly.

The injection of capital has also bred many pet brands for the domestic pet track, and the market competitiveness of domestic pet brands is also gradually improving. According to the statistics of Guojin Securities, in the domestic market, the concentration has declined in the past 10 years. From the perspective of the distribution of domestic and foreign brands, among the top 15 brands, the share of foreign brands decreased from 28.8% to 13.9%, and the number of shortlisted brands decreased from 7 to 6; The share of domestic brands increased from 13.9% to 15.5%, and the number of finalists increased from 8 to 9.

However, this also means that the domestic pet track is facing more and more severe competition. A pet industry practitioner observed that "the market is very prosperous. There are many new brands in the exhibition, but they are not easy to work and sell. Many of them are amateurs. They invest millions to get a brand. But you will find that they all have a cycle. Anyway, there are not many people who have lived more than three years. Of course, I personally think that more people come in than go out."

Therefore, an interesting phenomenon appeared in the pet track, and pet brands were going to sea collectively. Previously, there was incomplete statistics from the media. In the past three years, there were more than 30 products of intelligent pet feeder category online overseas, most of which were domestic brands. It includes CATLINK, PETKIT, Bird's Voice and Flower Fragrance, Petwant, PAPIFEED, HoneyGuaridan, Ameifu, Xiaomi, Linglong Cat, Mengkong and other brand products, and accounts for most of the market share of overseas pet smart products.

This may have become the collective strategy of domestic pet brands at present. Among the pet brands that received financing in 2022, pet products and smart product brands also chose to go overseas.

2. Smart pet brand pilot

Among these overseas brands, smart pet brands account for the majority. The main reason is that pet food involves food safety, and overseas sales need to be approved by target countries, which makes it relatively difficult to go overseas, "Generally speaking, low-value non-electronic goods cannot be shipped on a large scale, and can only be outsourced to foreign countries to earn a certain amount of gross profit. For example, Zhongchong, Petty and Yiyi, their gross profit is relatively low, all around 20 points." said Wang Chuanzhi (alias), an investor who has been paying attention to the pet track for a long time.

However, intelligent products with high customer price involve patent protection, and the industry barrier is high. In electronic products, China has its own supply chain advantages.

Now, smart pet products have formed its own industrial cluster in the Pearl River Delta. Zhou Huipu noticed that in the industrial park in Zhuhai, there may be four or five pet projects. We should complement each other, grasp the understanding of the pet scene and the underlying basic needs, and then go to see what plans are better and more optimized.

Many practitioners in the pet track have found that one of the advantages of Chinese brands compared with overseas brands is the rapid product update and iteration. "Foreign enterprises generally have a problem. They have a product that has not been innovative for 10 years, and it is expensive to sell, and the use experience is not so good. However, the domestic product supply chain responds quickly, the update and iteration are fast, the use experience is also relatively good, and the price is also cheaper. Therefore, the domestic product going to sea in many fields is a blow to the dimension reduction," said Wang Chuanzhi.

At the same time, the overseas market also has a broader market space. According to Huacheng Import and Export Data Observation, the global pet technology market will be worth $5.2 billion in 2021, and is expected to reach $17.57 billion by 2028, with a CAGR of 19%. Meanwhile, European and American consumers are also highly receptive to smart pet products. More than 52% of American adults have purchased smart devices for their pets. In Europe, the figure is even higher, at 67%.

The founding team of Furbulous said in a recent interview with the media about its observation of the overseas market that at this stage, we should do the overseas market first because the overseas pet products market is relatively mature and there are no products and brands that specifically meet the needs of consumers. Another very important point is that the overseas market is not so "voluminous", which means that you can spend some time to create a good product, not just to compete for supply chain costs.

In contrast, the domestic market has reached a stage of high inward volume.

"Domestic pet electronic products have a scale of about 3 billion yuan, with an annual growth rate of 80% to 100%. The industry growth rate is very fast. However, due to the fierce competition ahead of time, many people have done it, and they have also taken money, and are doing it crazily. However, after the valuation in the past two years, it is difficult to raise funds at a higher valuation. There is no way to continue financing, and there will always be a number of deaths. Therefore, domestic enterprises will experience some reshuffle in the past two years, and some enterprises will die Maybe not. Some enterprises may emerge slowly. " Wang Chuanzhi said.

As a result, smart pet brands are in the stage of making no money at home and making money abroad. In this regard, Wang Chuanzhi made a settlement with the brand factory, "Why lose money in China? Because of the price war and product homogeneity, and the product cost itself will not be too different. For example, when the smart cat litter basin was first sold, it sold 2000 and 1500 yuan, and now it sells 1200, 1300 and even 1000 yuan. The cost of a device can be as high as 700 to 800 yuan. In China, it is necessary to sell this category, as well as marketing and R&D expenses, so the domestic loss is caused by too fierce competition. The domestic price is 1500 yuan The overseas sales price of the smart cat litter basin of yuan may be 4000 yuan or more, and the gross profit has reached nearly 80%, but after deducting the delivery cost, the net profit may be about 10 points. " Wang Chuanzhi said.

As a result, the fierce competition of domestic smart pet products forced these brands to speed up the market. The founding team of Furbulous, a pet smart product brand, said, "We have observed some domestic peers and it is true that everyone is burning money, which is one of the reasons why we decided not to do the domestic market for the time being."

5. Go to sea

However, the way for brands to go to sea has never been smooth. Many practitioners of pet track to go to sea have gradually found that the difficulty of going to sea in 2022 is much higher than before. The market dividend since 2020 is gradually receding.

Guo Ming has a deeper understanding of this. Through Alibaba International Station, he has expanded a lot of customers, some of them are overseas offline supermarkets, pet hospitals, and some are e-commerce platform sellers, many of whom, like him, have entered the pet track with a focus on the epidemic dividend.

Now, however, he has clearly felt that the whole industry is getting more and more complicated. Although the order volume has increased compared with 2021, he has to lower the price to customers under the fierce competition of the industry, so the profit margin has also been relatively lower. Fortunately, he can still maintain the growth of net profit due to the impact of exchange rate fluctuations.

Zhiou Technology, a furniture and home furnishing overseas brand, also feels the industry competition of the pet track. In 2018, Zhiou Technology founded the brand of pet furniture and household products FEANDREA. After two years of development, the head of FEANDREA found in 2020 that pets were getting hotter and hotter. In addition to the outbreak of the epidemic in 20 years, the demand of the whole foreign country increased sharply. In addition to the shortage of supply, many auctions made a lot of money in that year. But after 2021, the overseas economic contraction caused by the epidemic, including excessive consumption in the early stage and the backlog of domestic goods to foreign countries, led to the fierce competition in the industry, There is some disorder in some categories.

The only way to stand out from the competition is to differentiate. Li Zhiting (pseudonym)'s organization is providing agency operation services for a smart pet product brand in Shenzhen. To cooperate with this brand is to select the uniqueness of the brand's R&D products

According to Huacheng Import and Export Data Observation, in order to achieve differentiation, FEANDREA has chosen to rely on multi-category layout and fast update and iteration strategy. According to the head of the brand, "For example, in the research and development of Cat Tree, in addition to carefully studying the habits of cats, we will also pay great attention to the scenario-based integration of products and furniture products of other brands of Zoomlion, which will facilitate customers' one-stop purchase by category layout and increase the frequency of customers' re-purchase. At the same time, the furniture home industry belongs to the industry of slow growth and slow death, while the products of Zoomlion will be updated faster, with a general life cycle of about 2 to 3 years."

At the same time, in order to prevent plagiarism and co-selling, Zhiou Technology has protected and controlled the supply chain. However, in the narrow circle of the pet industry, copying and co-selling seem unavoidable. The head of FEANDREA revealed that some products have been copied as soon as four months.

The inherent problem of the intelligent pet products industry is in the after-sales link. "Smart pet supplies must have their own offline entities when they go to sea. If there is no entity, the after-sales service of products is very troublesome. Electrical products are more or less after-sales service," said an employee of the smart pet supplies supply chain.

Whether it can be truly accepted by the local market is still a test for every overseas brand. At present, Xiaopei is the first tier of domestic brands to go abroad, but its co-founder and CEO Guo Weike still said in an interview, "From the perspective of the revenue share of the whole company, you can see that we are investing every year, but its revenue share has been hovering around 20%, which is difficult to break through. In fact, our coverage in other countries has been quite wide, but not deep. It is very difficult for a brand to really settle down and become a brand accepted by local people and very knowledgeable."