Growing Pet Market... Distribution Industry Racing Ahead

CJ OnStyle Operates Pet Specialty Mall
GS Retail and Pet Friends Joint Acquisition
11st Bets on Early Morning Delivery

Pet market size. [Image source=Korea Institute for Industrial Economics & Trade]

[Asia Economy Reporter Lim Chun-han] As one in four Koreans now live with pets, the distribution industry is jumping into the ‘pet business.’ Although the domestic pet market is rapidly growing every year, no company has yet secured market dominance. Distribution companies are accelerating efforts to capture the market through brand launches and acquisitions of specialized malls.

According to the Korea Institute for Industrial Economics and Trade on the 10th, the size of the domestic pet-related market is estimated to have grown from 900 billion KRW in 2012 to 1.8 trillion KRW in 2015, and 5.8 trillion KRW in 2020. The industry expects the pet market to expand further due to aging population and the rapid increase in single-person households.

Especially, the ‘Pet-cokjok’ (pet + staying at home) group, which increased after COVID-19, is spending generously on dogs and cats. According to the ‘2021 Korea Pet Report’ released by KB Financial Group Management Research Institute, as of the end of last year, 14.48 million people own pets, accounting for 29.7% of all households. The average monthly fixed expenditure on pet care was 140,000 KRW, with costs distributed as follows: food (33.4%), snacks (17.8%), daily necessities (11.1%), grooming and beauty (10.0%), etc.

CJ OnStyle 'All Pet Day' image.

CJ OnStyle has been operating the pet specialty mall ‘Allpet’ since 2018, selling about 1,400 products. While it used to be limited to food and fashion items, the product range has now diversified to include beauty, health supplements, and leisure services. Especially from this month, ‘Allpet Day’ is held regularly every month to showcase exclusive products. According to CJ OnStyle, from January to July this year, orders for pet products increased by 22% and order amounts rose by 30% compared to the same period last year.

GS Retail jointly acquired the pet specialty mall ‘Pet Friends’ last month with the private equity fund IMM Private Equity. The two companies jointly hold 95% of Pet Friends’ shares, with GS Retail investing 32.5 billion KRW to acquire a 30% stake. This investment was made to strengthen GS Retail’s pet category. Previously, GS Retail had invested in pet startups such as Dogmate, Petpick, and Baram System, and has a subsidiary called About Pet.

11st launched a differentiated delivery service as a strategic move. Earlier this month, 11st introduced a dawn delivery service for about 1,500 products including pet supplies, food, snacks, and toys through the pet specialty shopping mall Storebom. This service delivers orders placed by 5 p.m. on weekdays (excluding weekends) by 7 a.m. the next day. Delivery areas include all of Seoul and parts of Gyeonggi Province. A 11st official said, “More customers prefer online purchases of pet supplies due to the convenience of ordering and delivery.”