Pet healthcare

With the stable and improving pet economy, the demand for various related services is constantly increasing. Taking pet healthcare as an example, the number of pet hospitals is gradually increasing driven by demand, but at the same time, there are problems such as high cost and difficulty in seeking medical treatment for pets, opaque prices for pet hospitals, uneven quality of employees, and non-standard operation.

The development of China's pet industry has also ushered in a period of rapid development along with the rapid development of the domestic economy. With the shift in the role of pets in daily life, pet owners nowadays often refer to themselves as "poop collectors" and treat their pets more like family members. Most of them are kept to seek companionship and fill the loneliness in their hearts. Therefore, with the increasing demand for pet healthcare, services, insurance, and other services, medical institutions related to pets will also experience certain development. At the same time, under the guidance of the "Internet plus" and other policies advocated by the Chinese government, more and more fields and industries are gradually starting to connect and integrate online and offline, further reforming and innovating the traditional model, and the e-commerce model will also become a major breakthrough in the further development of the pet medical industry.

The current situation of the pet healthcare industry

1.1 Pet healthcare accounts for a relatively large proportion in the segmented fields of the entire pet industry

In the entire industry, pet food and medical care are essential consumer categories for pets in their daily lives, and they are also the largest market development potential and largest demand components in the entire pet industry. They have the characteristics of high consumption frequency and long consumption cycle. In the newly released 2020 Pet Medical Industry Research Report by the Pet Products Association, it can be found that food accounts for 33.83%, medical accounts for 22.88%, supplies account for 15.90%, other services account for 13%, and sales account for 12.46%. From the data, it can be seen that the proportion of medical services is second only to food, and it has the characteristics of high market share and high demand.

1.2 Giants rapidly expand offline to accelerate market share

The development of China's pet industry was relatively late. Currently, the pet medical industry in China is mainly occupied by pet hospitals. Pet hospitals, as the main body of treatment, are the most important form in the pet medical field. In the pet hospital industry, industry leaders have formed strong alliances to accelerate the deployment of offline pet stores. Hillhouse Capital, Ruipeng Group, and Ruipai Group are currently the three giants in the pet industry. The group's pet hospitals have shown a trend of scaling up. As of September 2021, New Ruipeng's hospitals have exceeded 1600. And gradually move towards standardization based on consumer and market demand. Hillhouse Capital invested in Xinruipeng Pet Medical Group for resource integration. Xinruipeng also acquired other pet hospital brands and pharmaceutical companies to further integrate resources and accelerate market share. However, this expansion did not achieve the expected results under the impact of the epidemic.

1.3 The epidemic has shifted offline pet consumption to online consumption

Affected by the epidemic, the increase in pet companionship time by pet owners has driven overall pet consumption, and pet owners have increased their attention to pet health. The epidemic has accelerated the expansion of the pet medical market, cultivating more new potential consumers for the industry. At the same time, under the influence of the epidemic, the flow of offline physical stores has decreased, but consumer willingness to consume is still present. Consumers have shifted from offline consumption to online consumption, which has driven the rapid growth of e-commerce platform sales and the transfer of pet healthcare from offline to e-commerce platforms.

At present, some companies in the market have already deployed online pet medical projects in advance, such as JD Health's latest launch of "Pet Hospital", which can provide one-stop medical services for pets. According to Cloud Finance, more than 1000 JD pet online stores have been launched. According to reports, more than 40000 users have used this service in the past two months, with a high praise rate of 98%. JD has targeted the current gap in the online pet medical market and seized the opportunity of the epidemic to quickly occupy this part of the market.

1.4 Pet vaccines and medicines are in great demand

According to the White Paper on China's Pet Medical Industry in 2020, most of the existing pets in China are too young. A large number of pets will enter the old age period from 2022 to 2025. With the growth of age, the incidence rate will increase, the medical market will further expand, and there will be great demand for disease treatment and prevention.

Summary: Nowadays, the development and growth of pet e-commerce is the trend, but if online development wants to thrive, it cannot do without the support of offline stores. The model of online and offline cooperation will become the mainstream development direction of the pet industry, and online consumption will also become the future trend. Therefore, relevant enterprises can consider seizing the current demand gap in the pet market and combining pet medical care, insurance, and community communication through e-commerce platforms to build a one-stop pet medical service platform. At the same time, we will integrate the resources of offline pet hospitals, promote standardized hospital operations, solve the problems of uneven quality of offline medical care, difficult and expensive medical treatment, and promote online and offline joint ventures.