As the father of two children and the pet owner of two cats, Xiang Lin likes to take his family on short trips around by car, but he has never taken "hairy children" to travel together.
It's not that he doesn't want to, but that many inconveniences make him consciously give up this idea - few hotels are willing to accept pets, and it's not easy to meet a residence that makes pets feel good.
"Not before. It can\'t be inferred that this demand doesn\'t exist." As China's first listed pet comprehensive service platform, Fang Kai, Chief Strategic Officer of Boqi pet (NYSE: BQ), told first finance and economics that they believe that there will be an outbreak in the pet travel market, and the "sleeping" behind the supply and demand gap is a huge business opportunity.
He explained that, unlike a single service for purchasing goods, keeping pets is a multi-dimensional service demand: in addition to the staple food, retail and toilet cleaning supplies required by pets, pet owners also have a large number of high value-added low-frequency needs to be met, such as washing, medical treatment, foster care and travel. With the trend of pet family membership, more and more personalized segmentation services such as characteristic pet hotels, pet amusement parks and pet soup springs will emerge in the field of pet carrying travel, which will also allow more new opportunities to flow into the track.
Based on this industry consensus, China's pet economy industry has also entered an active period of strategic landing and financing listing.
How big is the market?
On January 11, 2022, Boqi pet and huajiantang, a high-end boutique resort brand of Yongle Huazhu group, jointly issued the proposal for China's pet friendly hotel industry in 2022, and created a model pet friendly hotel in Changxing, Zhejiang Province.
"At present, the occupancy rate of Changxing store has exceeded 60%." Xia Nong, executive vice president of Huazhu group and CEO of Yongle Huazhu Hotel Management Co., Ltd., told first finance, "the pet market is very large. In 2020, China's cat and dog pets exceeded 100 million, and the number of pet owners exceeded 60 million. On this base, about 35% of pet owners have the demand to travel with pets."
According to the white paper on China's pet consumption trend in 2021 (hereinafter referred to as the white paper) released by iResearch consulting, the pet consumption market will be close to 300 billion yuan in 2020. Driven by policy, economic, social and technical factors, as well as more potential pet raising people and emotional consumption caused by the epidemic, the pet industry will continue to maintain steady growth in the next three years, with a compound growth rate of 14.2%, By 2023, the industry scale will reach 445.6 billion yuan.
Two months ago, we invested in the plank road capital of Kairuisi, a PET staple food brand, and regarded pets as a key track. Wu Zhiwei, founder of the company, believes that the scale of the pet industry will increase significantly in the next 10 years. Taking Japan as an example, the scale growth of Japanese pet industry is positively correlated with the increase of aging rate, and China's aging trend will also become the driving factor of pet industry. Compared with the penetration rate of nearly 65% in Europe and America and 20% in Japan and South Korea, there is still much room for improvement in China's pet market with a single digit penetration rate.
In addition to aging, with the changes in the concept of marriage and love, young people also increasingly need the company and spiritual comfort of pets.
"Even if it is conservatively estimated according to the occupancy ratio of 10% ~ 15%, it can be seen that it is of an order of magnitude." Xia Nong believes that, coupled with the strong consumption ability of most pet groups, the market cake of bringing pet travel into high-end hotels will not be small.
Corresponding to the demand is the shortage at the supply side. Taking pet hotels as an example, according to the 2021 China hotel industry development report, as of January 1, 2021, the proportion of pet friendly hotels in the four first tier cities of Beijing, Shanghai, Guangzhou and Shenzhen was less than 1%. At the same time, the existing pet friendly hotels still have great differences in the process design of pet carrying check-in service experience, theme scene creation and staff operation specifications.
The current situation of supply and demand made Xia Nong decide to take pet check-in service as one of the core services of huajiantang in the future, and enrich the consumption scenes of pet carrying travel in China around the service standards, facility standards and personnel standards of pet friendly hotels.
Not only pet hotels, other pet service markets are also emerging.
The white paper shows that with the increase of pet owners\' income and consumption, pet owners\' demand for pet services is increasing. From the perspective of purchase penetration, the purchase penetration of pet services is close to 60%; In terms of purchase frequency, it is 3.3 times a quarter and once a month +, followed by the pet food category of "just need".
At the same time, the form and content of pet services are constantly refined and innovated. In the future, with the further development of pet owners' pet care refinement, in addition to the conventional beauty washing, there will also be pet training, walking, raising, high-end pet hotels, pet amusement parks, pet photography, pet funeral, etc. In huajiantang's scenario of traveling with pets, there are health services such as pet soup spring and more cultural, creative and social services.
According to the white paper, pet characters are mainly friends and family with accompanying function. 20% of pet owners regard pets as children and cultivate love through parenting relationship similar to parent-child relationship. Therefore, the anthropomorphic pet service market will be larger and larger.
For Chen Le, keeping pets and doing DINK are two unrelated things, but it gives him greater spending power in keeping pets. In addition to traveling with pets, he is most concerned about pet medical care, which is also the largest expenditure other than daily expenses such as cat food, cat litter and beauty washing.
As early as three years ago, the 2018 white paper on China's pet industry showed that the per capita annual consumption of a single pet of cat and dog breeders reached 5016 yuan, with an average of more than 400 yuan per month. Under the influence of the epidemic, this data only increased. Fang Kai pointed out that at present, China's pet services account for only 30% of the total pet consumption, and 70% are pet goods consumption. "The added value of providing services is higher than selling goods". Therefore, the new 2C channel model is to sell goods through e-commerce, and tap and meet the service needs of customers in more dimensions through the tentacles of Wuxi Online Offline Communication Information Technology Co.Ltd(300959) .
In addition to the service of making pets live better, pet funeral service has also become popular in recent years, and pet mortician has become a new profession. In 2021, performance stars such as Ouyang Nana and Li Bingbing experienced the career of pet mortician, which attracted more attention and resonance in this industry. At present, Beijing, Shanghai and other cities have legal institutions and corresponding regulatory authorities engaged in this industry.
active industry financing
Facing the rapidly developing market, China's pet economy industry has entered an active period of strategic landing and financing listing in recent years.
Recently, Jiangsu Zhongheng Pet Products Co., Ltd. (hereinafter referred to as "Zhongheng pet") submitted a statement to Shenzhen Stock Exchange and planned to break through the gem and raise 479 million yuan. This is another player after Yantai China Pet Foods Co.Ltd(002891) (002981. SZ), Petpal Pet Nutrition Technology Co.Ltd(300673) (300673. SZ), Tianjin Yiyi Hygiene Products Co.Ltd(001206) (001206. SZ) that have been listed on A-Shares in recent years and Boqi pets listed on U.S. stocks.
Xinruipeng pet medical group from Shenzhen has also completed hundreds of millions of dollars of strategic financing.
As a company engaged in the design, R & D, production and sales of pet products, according to the prospectus, Zhongheng pet achieved revenue of 855 million yuan, 962 million yuan, 1068 million yuan and 550 million yuan respectively in the three years from 2018 to 2020 and the half year from January to June 2021. The net profit in the same period was -2522 million yuan, 34.1928 million yuan, 94.266 million yuan and 35.4855 million yuan respectively, The scale of revenue and net profit showed a continuous growth trend.
According to the unaudited financial report recently released by the New York Stock Exchange, the total revenue of Boqi pet in the second quarter of fiscal year 2022 (as of September 30, 2021) was RMB 282.1 million (about US $43.78 million), a year-on-year increase of 23.1%; The gross profit was 55.71 million yuan (about 8.65 million US dollars), a year-on-year increase of 30.7%; The gross profit margin was 19.7%, an increase of 1.1 percentage points year-on-year.
The white paper proposes that with the development of digital informatization and the progress of Internet of things technology, Wuxi Online Offline Communication Information Technology Co.Ltd(300959) omni-channel operation mode will be a strategic channel for brands and channels to expand their scale in the future. With the entry of capital and the influx of foreign high-quality brands, it has stimulated the orderly competition in the Chinese market and promoted the vigorous growth of domestic brands. Under the epidemic situation, the validity period of imported brands and the stability of supply also give more development opportunities to domestic brands.
Fang Kai said that as an enterprise starting as an online pet supplies supplier, Boqi pet has made every effort to expand its offline layout since 2021 and plans to build a Wuxi Online Offline Communication Information Technology Co.Ltd(300959) integrated one-stop service platform in 2-3 years. "Offline is not necessarily the main source of income, but it is an important node connecting users, which can meet the needs of low-frequency and high added value in the process of user pet raising".
According to the white paper, China's pet industry has entered a stable and mature period of orderly growth, and in Fang Kai's view, this market is on the eve of an imminent outbreak.
