Is the enterprise actually in trouble?, Obtain the "wealth key" e-commerce | pet | enterprise in this quasi trillion level industry
In 2023, JD.com released the "618" battle report, which showed that pet retail transactions during the "618 opening" phase increased by over 56% year-on-year; According to the sales report of the first phase of Tmall Pet "618", 27 stores had transaction volumes exceeding 10 million, 161 stores had transaction volumes exceeding 1 million, and 242 brands saw a year-on-year growth of over 500%.
In recent years, the pet industry, especially the pet food industry, has been in the spotlight at e-commerce shopping festivals. There is also a group of operators who use e-commerce platforms as their "wings" and take advantage of the initial blank market in the pet industry, quickly accumulating hundreds of millions of wealth in the pet food field. Nowadays, they call themselves "very confused and anxious".
Is it even harder for businesses to reach the ceiling?
A report released by iMedia Consulting shows that the scale of China's pet economy industry reached 493.6 billion yuan in 2022, and is expected to reach 811.4 billion yuan by 2025.
According to Frost&Sullivan's estimate, the compound growth rate of China's pet industry was 19.1% from 2015 to 2021, and 16.6% from 2021 to 2025. Among them, pet food, pet supplies, pet medical care and services account for 39%, 14%, and 34% respectively.
From a segmented perspective, pet food is the largest segmented market in the pet industry. With people's increasing awareness of feeding commercial food, the demand for pet food in the market is constantly being released.
"Although the Chinese pet food market has a large scale, its potential still needs to be explored, and it has not yet formed an independent and strong brand that is comparable to internationally renowned brands." Liu Lang, Vice President of the China Veterinary Association and President of the Pet Industry Branch of the China Animal Husbandry Association, said in an interview with China News Agency's Guoshi Express.
In the early stages of development, Chinese pet food companies have rapidly grown into a group of new brands with highly mature e-commerce platforms due to relatively less competition. Although enterprises and brands with annual revenue of billions or even billions of yuan have supported most of the pet food industry, once enterprises with a high degree of dependence on e-commerce reach the development ceiling, they appear somewhat powerless in innovation and upgrading, breaking through development bottlenecks.
During an interview with China News Agency's Guoshi Direct, Lv Shang believed that the difficulties he is currently facing and the achievements he has made in the industry are all due to his high dependence on e-commerce. Five years ago, he founded a pet food brand. Through precise market positioning and marketing strategies, he achieved an annual revenue of over 100 million yuan and over 1 billion yuan in a short period of time without any brand recognition and influence.
"Now, the operational potential based on e-commerce rules has been fully tapped, and although the size of enterprises is large, their development is slow, and there is even a risk of performance decline or 'collapse' at any time." Lv Shang said that currently, the customer resources and operational models of enterprises are based on e-commerce platforms. Due to the lack of brand influence in enterprises, once they leave e-commerce platforms, it is difficult to not only explore new customers, but also to attract old customers to other sales channels such as their own apps and offline stores.
What makes Lv Shang even more anxious is that after e-commerce brings enterprises to the "ceiling", the space left for enterprises is getting smaller and smaller.
The former "key to wealth" has become a "double-edged sword"
"Even if one is fortunate enough to obtain the 'wealth key' on the e-commerce platform, they will soon reach the last door." Lv Shang said that the wealth rule provided by the e-commerce platform is based on maximizing their own interests. At first, startups who settled in e-commerce platforms could enjoy various discounts after studying the rules, and attracting a customer to visit the store only cost a few cents. Nowadays, not only has the cost of attracting traffic increased to over 1 yuan, but various channels are also more expensive and not as convenient as when I first joined the platform.
Lv Shang said that all seller data is transparent to the platform. Enterprises with a certain level of revenue may reduce their reliance on e-commerce platforms and choose to develop more diverse and three-dimensional marketing methods on their own. In this way, the interests of e-commerce platforms may be affected. But if the platform continuously supports new sellers in the same industry and allows more and more competitors to participate in the competition of e-commerce platform marketing investment, it is more in line with the long-term interests of the e-commerce platform itself.
The power of discourse lies in e-commerce platforms. Lv Shang believes that after the rapid growth of pet food operators, they are facing a constantly shrinking space.
"Everything has two sides, and e-commerce platforms are no exception." Liu Lang believes that the advantages of e-commerce platforms can enable some enterprises to develop rapidly, but any industry, including the pet industry, if it relies too much on e-commerce and has a too single operating model, it will leave a legacy for long-term development. The pet industry needs more diversified marketing and operating models.
If pet companies that are growing rapidly on e-commerce platforms are proactive and plan their operations and development in advance, it is meaningful to solve the difficulties of breaking through after hitting the ceiling. However, for enterprises like those operated by Lv Shang to truly break through and develop clear paths, there are still more problems that need to be solved.
In the early stages of development, finding and even supporting some pet industry self media and "big Vs", paying them to directly attract fans to e-commerce platforms and live streaming rooms, is a shortcut for the pet industry to attract customers.
However, as more and more enterprises require precise customer traffic, and with the doubling of prices, resources are far from enough to be "divided". Based on a large fan base, some "big Vs" do not care about the legality of qualifications and processes, and conduct evaluations, commissioned inspections, and even release unproven "rights protection" information to attack enterprises in the pet industry. Some companies feel trapped, but often have to cut their flesh to satisfy their former partners.
According to Lv Shang, seeing that big "V" can bring benefits to some pet companies, even some consumers who have previously given sellers positive reviews, such as "Water Army" and "Small V", have taken the opportunity to start businesses. Regardless of whether there is evidence or not, as long as a set of text and images can be used to link the problems with pets with the product, the seller can be blamed. Mild cases can result in refunds, severe cases can result in compensation, and if the goal is not achieved, the seller will post a "black" message.
Lv Shang believes that these series of troubles make him feel a bit "unable to straighten up".
Liu Lang said that in order for companies in the pet industry to have a strong backbone, they must first have a strong product and their own strength.
The enterprises themselves that have overcome difficulties and broken through the situation must "act properly"!
An insider in the pet food industry revealed to China News Service that some pet food companies in the industry often worry about third parties conducting "spot checks" on their products, and the underlying reason is still "their own product anxiety.". Some brands disclose inconsistent feed and ingredient ratios for pet food, and only disclose a portion of the raw material traceability. High priced ingredients such as "anchovy meal" are not disclosed at all. Even in the past few years, some brands added animal hair powder to increase the protein content of pet food in order to reduce costs, which could be fatal to pets.
During the "6.18" period, Guoshijun purchased a fish oil brand called "A+Pets" on a certain platform. The packaging not only did not find the production date, but also found that the production license number began with "Pu Si Tian". According to online searches, the first letter of the product certificate number for this category is abbreviated as the province of origin, such as "E", "Jin", etc. There is no "Pu" for the province abbreviation in China. After calling the competent department in the name of a consumer to inquire, the staff informed that the prefix "pu" was definitely incorrect. Even if it was understood as the misprinted "jin", the item "fish oil" was not found in the scope of the production license number provided by the reporter.
Guo Shijun contacted a staff member known as "Mr. Wang" from Taiyuan Dixin Pharmaceutical Co., Ltd., a manufacturer of the product. At first, he said that the product was not registered with the relevant local departments, but was registered on a certain feed industry network platform. Later, it was said that it was not produced by them. They only had the idea of producing this type of pet food, but did not actually produce it.
Industry insiders have revealed to China News Service that this type of "fish oil" is advertised to have the effect of reducing hair loss in pets such as cats and dogs. But some illegal products not only label imported raw materials or fish oil as fake, but also add lower priced flaxseed oil to impersonate. This fake and inferior fish oil is not only harmful to pets, but also exacerbates the competition between genuine products in the industry, disrupting the market and industry development order.
Liu Lang believes that while promoting diversified operations and not overly relying on e-commerce, the pet industry needs to do several things well. The first is for enterprises to ensure product quality, strengthen industry self-discipline, and establish an open and effective regulatory system; The second is to continuously formulate and improve standards in strict accordance with legal provisions, providing a basis for industry norms; The third is to promote the optimization, adjustment, and legislation of laws related to animals, including pets.
Liu Lang stated that the improvement of laws and standards is a prerequisite for helping enterprises overcome development difficulties and even promoting the standardization of the pet industry towards high-quality development.
