A Pet Parent spends ~Rs 5k p.m. on their pet, and the margins in this industry are crazy…
Let’s first understand the Market Size
👉🏼 India has ~30 million pet dogs and about a fifth of that in pet cats
👉🏼 India’s pet food market is over USD 300 Mn p.a. i.e. Rs 2500 crores
👉🏼 The pet care and vet services market is expected to reach USD 1 Bn in market size by 2025
👉🏼 Around 6 lakh pets are adopted each year out of a total of 80 million strays
👉🏼 The market is growing at a rate of ~14% p.a. because of smaller families, increase in loneliness, lower fertility rates in couples and people wanting a pet as a child they can care for
Now, let’s understand the areas of play in the value chain.
👉🏼 Royal Canin and Pedigree are owned by the Mars group (chocolate fame) which is the fourth largest privately owned company in the US with USD 45 Bn as annual revenues - Pet Food is a massive category with a retailer having margins between 8-15% depending on the scale of operations
👉🏼 Then comes pet apparel, toys, shampoo, snacks, and a ton of other useless things which pet parents shell out money for to pamper their pet children - with easily gross margins of 40-60% across categories
👉🏼 In metros, the spend on pets is easily upwards of Rs 10k per month, which is monthly recurring revenue if you can offer the following through a subscription:
pet food delivery - monthly
pet apparel and toiletries
pet grooming and hair/nail cutting
👉🏼 A simple pet store in your society can easily do about Rs 8 lakhs of sale of goods, and another Rs 4 lakhs of sale of services, and make a monthly profit of Rs 2 lakhs from a small shop
Of course location selection is primary to have high density colonies around with nuclear families
👉🏼 It’s the adding of services in the mix that take the margins up to 15-17% for a store on total revenues
I’ve been working with a few founders in this space for a while now, and think that despite premium brands in the space, there’s a huge opportunity for smaller more accessible players capturing local pet parents in their towns and cities
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A Chartered Accountant with about 10 years of experience in areas of Tax Advisory, Startup Consulting, Fundraising, Audits, Deal Advisory, Business Modelling and contract CFO services.
Winner of the ISB Young Leader Award 2017 and the Best All Rounder, PGP Class of '17, Sarthak has also been published about in the leading financial newspapers such as The Financial Express as possibly the youngest Indian to have completed the courses of CA, CS and CMA along with a graduate degree in Financial & Investment Analysis from University of Delhi, all by
Sarthak Ahuja