Business Diversification by Targeting the Pet Market
Estimated 15 Million Pet Owners in Korea
"Increasing Annual Sales Targets to Expand Market Influence"
Paper and household goods company Kkaekkeutan Nara is accelerating its entry into the ‘pet’ market. This is due to the weakening performance caused by a decline in demand in its core business of white cardboard and rising raw material prices. Based on its achievements in diversifying its existing paper business in the rapidly growing pet market by launching paper products used by animals, Kkaekkeutan Nara has introduced pet products in the non-paper sector as well.
On the 15th, Kkaekkeutan Nara announced that its pet specialty brand ‘Popomong’ launched the ‘Dust Zero Bentonite Cat Litter’ for cats last month. This is the third product in the lineup following the pet tissue and waste pads released at the time of Popomong’s launch in July last year, expanding the product range. Popomong’s name is derived from the English word ‘paw,’ meaning footprint.
From the 23rd of last month, to commemorate ‘International Dog Day,’ a Popomong welcome kit giveaway event was held for registered full members of the Korea Blood Donation Dog Association. The welcome kit consisted of an eco bag and pet tissues. In particular, the eco bag was made with pet photos, adding special meaning.
The pet tissues and waste pads are the result of expanding the target of diapers, wet wipes, and tissues, which Kkaekkeutan Nara had previously produced for humans, to pets. This is interpreted as an attempt to leverage its strengths as a paper and household goods manufacturer in the pet market as well. The pet tissues received positive feedback for being thicker and moister compared to other pet brand products, making them effective for cleaning. The waste pads were praised for their high instant absorbency that prevents spreading to the sides, and their thicker thickness and non-slip treatment compared to other products, making them safe to use for small dogs.
Based on such positive reviews from pet owners, the company expanded to produce cat litter. The Dust Zero Bentonite Cat Litter uses natural Wyoming bentonite raw materials and boasts strong clumping and absorbency through optimal blending. The ratio of particle sizes was adjusted to consider the convenience of cats using the litter box. Thanks to the large particle size and firm clumping, dust is minimal, and a state-of-the-art dust collection method was applied to minimize dust generated during the manufacturing process. Zeolite was added to the bentonite to enhance deodorizing power. The soft texture ensures that cats’ paw pads are not damaged.
Kkaekkeutan Nara is focusing on the pet market to diversify its business. The company recorded an operating loss of 18.9 billion KRW last year. In 2022, it had an operating profit of 3.8 billion KRW but turned to a deficit. The deterioration of the white cardboard sector and rising raw material prices are the causes. In the household goods sector, the declining birthrate means diaper demand is expected to decrease.
The pet market is emerging as a blue ocean. Kkaekkeutan Nara aimed to find a breakthrough in this market ahead of other paper and household goods companies. The number of pet owners in Korea alone is estimated to reach 15 million. The Ministry of Agriculture, Food and Rural Affairs announced last year through the ‘Pet-Related Industry Promotion Plan’ that it plans to grow the domestic pet market size from 8 trillion KRW in 2022 to 15 trillion KRW by 2027.
A Kkaekkeutan Nara official said, “With the growth of the domestic pet market, we decided to enter this market and added pet product manufacturing and sales to our business objectives following last year’s shareholders’ meeting. Starting from the initial target of 900 million KRW set at launch, we plan to raise the annual sales target and expand our influence in the market.”
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