Indian Pet Care Segment Moving Fast Forward  

By Jyaneswar Laishram

With gradual economic growth and changing lifestyles, India’s pet care industry has perceived tremendous development over the last few years. Pet owners in the country’s urban pockets have begun to look upon their pets more as ‘companions’ or members of the family, rather than just domestic animals. And these people increasingly take keen interests in the diet, health, and grooming of their beloved pets. In turn, a swift change in the pet care market has been observed over the review period. This new trend has spawned the entire industry, with major pet product players emphasising the expansion.

Market Overview

Since long, the Japanese pet care market dominated the region’s sale. India, Thailand, China, and Vietnam were some of the other potential players in the block. But things have changed and India is emerging as a potential pet care market in Asia-Pacific region with companies like PetCare witnessing a splendid annual growth rate of more than 50 percent in the past few years.

According to the latest Euromonitor International report, Japan’s 75 percent of regional value sale, a remarkable figure, has decreased to around 70 percent in 2007. In this concern, the developing markets like India saw retail value sales increase in access of 10 percent in 2006. “It’s true that Japan has a prominent pet care products market. But Indian market is emerging with its urban people dedicating a lot to pet care activities,” said Mr Stephane Bordier, Area Manager–Indian Subcontinent, South Korea, and Japan, CEVA Animal Health Asia.

In 2005-06, India and Thailand were included in the chart of 10 fastest growing markets in the world. Pet care market accounts for all categories of products ranging from toys to grooming products like shampoo, harnesses, collars, etc. The current overall size of Indian pet care and pet food market, in terms of current price value, is Rs 1739.9 million, expecting to grow up to Rs 3,687.5 million by 2012. Of this, the pet care segment occupies Rs 507.5 million. Year-on-year average CGAR of pet shops in India accounts for 0.4 percent during 2002-07.

Major Players

Indian leading pet care companies, which are predominantly sub-divisions of pharma majors, are significantly contributing to the booming industry. Major players like Vetnex-RFCL, PetCare, Venky’s Pet, Intas, and Pfizer are potential boosters of the growing pet care market. Their products, which are categorised from premium and super premium range, are widely distributed all over India covering the country’s remotest regions.

Born out of Indian pharma major Ranbaxy, Vetnex-RFCL focuses on in vitro diagnostics, animal healthcare, laboratory solutions and custom synthesis through its four strategic business units – Vetnex, Rankem, Diagnova, and Neosynth. Established in 2006, Vetnex-RFCL extensively operates through 22 important cities and metros all over India. In the domain of nutrition and therapy, PetCare is another trusted name among big players. The company deserves all attention on health, hygiene, and vigour matters. PetCare has brought a new revolution in Indian pet industry with its innovative solutions that meet international standard and have been acclaimed in various South East Asian countries and Brazil.

Despite providing therapeutic provision to the pet world, many companies across the country play pivotal roles in pet awareness front. Pune-based Venky’s Pet is one of the leading companies whose target is not only products but also providing educational counselling to its clients. From time to time, the company organises and supports dog shows and pet seminars to spread pet awareness across India.

Distribution Channels

Most of Indian pet care companies predominantly use supermarkets, veterinarians, breeders, pet shops, and retail chemists as vehicles to distribute their products. Deploying SAP system, Vetnex-RFCL has a wide network of 329 distributors across the country. A team of 22 CFAs, 600 Stockists, and 15,000 retailers cater to major livestock account and 100 stockists, 400 retailers and pet shops catering to pet segment of Vetnex. The company has strategic plan to expand distribution units to the remotest North East region of India, according to Mr Subrata Mukherjee, Vice President, Vetnex-RFCL.

Despite using emerging veterinary clinics as major distribution routes, pet shops including supermarkets/hypermarkets still lead with their increase of share of retail value sales of pet food and pet care products in 2007. Confronting on what the current pet care product market is progressing on, Vetnex Vice President Mr. Mukherjee stressed that that stores, veterinarians, and neutralists are primary distribution channels for Vetnex-RFCL products in the last few years.

Mushrooming of specialist pet shops in up-the market areas is a significant change in distribution system in the Indian pet care market. With its major production units located largely in Pune, Veky’s Pet distributes its unique products through doctors, breeders and other sales outlets like pet shops, chemist shops, and supermarkets. Similarly, PetCare operates its product distribution primarily through veterinarians, breeders, pet shops, retail chemists, etc.

Great Expectation

Indian pet care product industry has been receiving great turnovers and forecasting more in the near future. Currently, PetCare, a leading market player has annual growth rate of more than 50 percent, which is quite a satisfactory growth level of the company. Vetnex-RFCL is estimating a turnover of Rs 900 million in 2008 registering a growth of almost 22 percent over the previous year. According to Mr Mukherjee, the targeted growth rate is expected to be 20-25 percent in all segments.

Combining turnouts of the company’s overseas partners Bremer Pharma and Alved, RFCL’s veterinary product portfolio will be in excess of Rs 1600 million. This figure will push the company in to the list of Top 25 global integrated veterinary healthcare players by 2009.

Overseas Brands

Prominent overseas companies in pet food industries have traced their footprints in Indian sub-continent. In the pet care segment, some new players are eyeing the nascent Indian market. In a recent development, French company CEVA Animal Health and Australia-based grooming product company Plush Puppy marked a new beginning in the Indian pet care market. In collaboration with Vetnex-RFCL, the French company launched a first ever product D.A.P. (Dog Appeasing Pheromone).

D.A.P. products are useful synthetic canine appeasing pheromones produced naturally by a lactating bitch to reassure and calm puppies. It helps puppies and adult dogs stop or prevent from fear and stress related signs. And most of all, it works effectively to establish puppies in a new house or family. “With the help of D.A.P. we have treated nearly 80,000 dogs a day,” said Thierry Hirtz, International Product Manager, CEVA Animal Health on his recent visit to New Delhi.

Despite its quality products, arrival of CEVA Animal Health in India is a significant move towards the development of the country’s pet care industry. Plush Puppy, whose activities include grooming services as well as manufacturing of grooming products, landed on Indian pet care market just a few months back.

Domestic Products

Being a leading pharma company in the Indian animal health industry, Vetnex-RFCL offers an extensive product range covering important therapeutic areas such as antimicrobials (Cesftan, Temobax, Enrocin, Clavotin, and Otirel), de-wormers (Plozin, Plozin Plus, Plozicheck, Helmonil-C, and Fenzebol 3D) and skin & coat care (Spetrazole, Ranvidone Spray, Doline, and Myconil), pet diagnostics (Rapigen), behaviour management (D.A.P.), skin care (Cisaflux, Cisa-bath, Cisa-tix, Tic Tac, and Canovite), and nutritional (Arnibax, Frecia, Verol, and Caldipet).

PetCare’s product range that includes Notix group, Nutripet group, Ridd, Nutriticoat, Provical Pet, etc are widely demanded in the emerging market. Similarly, Venky’s Pet products categorising into medicines, feed supplements, and pet food products are popular in all segments in the industry. In the current market trend, Venky’s Pet produces quality pet care products like Worm Stop Combi, Furfree, and Sheen-n-Kleen Forte, which are highly demanded. The company’s other popular food products include Reagal Meal, Regal Pup, Show Cat & Best in Show PP (food) and Glossy Coat, Vengro, and Petspark (feed supplement).

Surging Market

India boasts of various domestic pet care companies which are currently operating only in the foreign markets. In a recent Creature Companion survey during the second India International Pet Trade (IIPTF), it was found that those India-born overseas companies are now headed for home ground. “We have been in the export business for the last 25 years. But in the last 7-8 years, we saw a good potential in the domestic market. So, our future plan is the Indian market,” said Ashish Jain, Ankur Export.

Doubtless to say, Indian pet care market is booming since last decade. Despite the fact that Indian companies operating in foreign markets are tending to open up business in India, some foreign companies are heading to the nascent yet promising Indian pet market. For a long time, overseas pet food brands like Royal Canin and Bento Kronen have ruled the Indian pet world. However, the sector has grown with new impetuses in the ‘pet care’ segment with the recent arrival of the products from Europe (CEVA Animal Health) and Australia (Plush Puppy).

Import Duties

In the wake of the Avian Flu outbreak in 2006, imports of pet foods to India were banned and affected badly. In turn, various manufactures, importers, and consumers were frustrated due to reduced availability of pet food products. But slowly and steadily, the gap has been recovered with government’s reduction of import duties on pet foods in 2007.

Similarly, the reduction of import duties is required on pet care products too. “Contrary to the reduction in pet food segment, India’s imposition of 36 percent tax on imported pet care products is really high. It should be reduced, otherwise it will deter foreign companies coming to India,” suggested Mr. Stephane Bordier. Of course, the easing of import duties is expected to bring much needed relief to importers and manufacturers of pet care products in India