Pet Industry Unaffected by Recession... Big Bang Predicted as It Meets IT and Bio Sectors

Startups like BM Stage Developing Products Using IoT
Healthcare Businesses Also Active
Market Size Expected to Reach 6 Trillion KRW by 2027

Pet Holic's 'Nose Work Weekend Farm'. It helps relieve stress by allowing pets to find treats using their sense of smell.
[Photo by Pet Friends]

# One-year-old puppy ‘Joy’ is no longer lonely when alone without her owner. This is because an AI robot puppy ‘Join,’ which looks just like her, plays with her. Han Boram, a single-person household and pet owner, can check in real-time at work through a home camera to see Joy and Join playing with a toy ball. Inside the toy ball is a sensor that measures Joy’s activity level. The average lifespan of dogs, which used to be 12 to 15 years, has increased by more than five years thanks to advances in pet healthcare technology. Han identified through genetic testing that Joy is vulnerable to kidney disease and is preparing by giving her supplements that are good for kidney health. The smart automatic feeder linked to Han’s mobile phone dispenses food and supplements accurately at set times.

This is a virtual scenario envisioned as a pet care service to be introduced as early as the first half of next year by pet industry startups such as BM Stage and PitPet. The pet industry, which was centered on primary industries like food and grooming, is evolving into pet tech by integrating advanced technologies such as AI, Internet of Things (IoT), and bio, thereby advancing the pet industry.

◆ Application of IT and bio technology... Large corporations also showing interest= BM Smile, a company specializing in pet products, established a joint venture ‘BM Stage’ in June with Stage Five, a Kakao affiliate. Currently, BM Stage is developing pet products that combine data and IoT technology. The plan is to provide real-time care for pets using advanced technology even when the owner is away from home, and as early as the first half of next year, they plan to release smart IoT devices based on pet data, such as a cat litter box. Targeted at single-person households, these products are expected to be a signal for the digital transformation of the pet market.

A visitor accompanied by a dog is browsing products at the Pets Room booth during the '2022 K-Pet Fair' held last month at Ilsan KINTEX.
[Photo by BMSmile]

The pet healthcare business is also booming. PitPet, aiming to establish a pet-specialized insurance company, received investments of 20 billion KRW from overseas venture capital (VC) BRV Capital Management and 7 billion KRW from a private equity fund established by IBK Industrial Bank of Korea this year. PitPet plans to develop a new bio kit for testing pet diseases in collaboration with Theragen Bio, a new drug development company. Additionally, pharmaceutical companies such as Daewoong Pharmaceutical, Kwangdong Pharmaceutical, and Ildong Pharmaceutical are diversifying their businesses by launching health functional foods for pets. The pharmaceutical and bio industries are emerging pet healthcare businesses as new growth engines. In this process, companies are collaborating with pet startups, revitalizing the pet industry.

Pet Friends, a pet shopping mall, offers data-based curation services using 800 million customer behavior data points, 800,000 pet data records, and 15 million purchase data points. Rather than simply showing good products, they recommend the most suitable products and services based on each customer’s needs and situation, such as their pet’s age, weight, and allergy information, improving efficiency.

◆ Despite the startup winter... The pet industry remains recession-proof= With the rise of nuclear families and single-person households, the number of people raising pets for emotional support continues to increase steadily. According to the Ministry of Agriculture, Food and Rural Affairs, about 6.38 million households raise pets, corresponding to 15 million people, which accounts for 30% of the entire population. Accordingly, the size of the pet market is also growing significantly. According to the Korea Rural Economic Institute, the market grew 78% from 1.9 trillion KRW in 2015 to 3.4 trillion KRW last year, and it is expected to reach 6 trillion KRW by 2027.

Although investment sentiment has worsened and a cold wind is blowing in the startup sector, the pet industry is maintaining remarkably solid performance. Unlike other industries undergoing restructuring such as workforce reductions due to domestic and international economic instability, the pet industry is expanding its business and increasing its presence. BM Smile’s flagship brand, Pesroom, expanded its customer touchpoints by showcasing products in 4,000 offline stores as of October, and the pet shopping mall Pet Friends, where pet product companies are listed, recorded a transaction amount of 47.6 billion KRW in the first half of this year, a 47% increase compared to the same period last year.