Is India's Pet Care Market The Next Investment Hotspot?
For savvy investors seeking promising opportunities, the pet care industry stands out as fertile ground. What began as a modest sector has now flourished into a multi-billion-dollar market, driven by urbanisation, changing family dynamics, and a significant shift in attitudes towards pet ownership. With the pet population surpassing 38 million and investments exceeding $170 million, the appeal of this sector to investors is undeniable. Let's explore in detail how the Indian pet care market is attracting such keen interest from investors.
Background
Today, the Indian pet care market stands as the world's most rapidly expanding pet care market. In 2019, there were approximately 20 million pets in India, but now this number has exceeded 38 million, out of which 34 million are pet dogs. This growth is poised to accelerate further as the market offers an array of quality products and services and is expected to touch 54 million by 2027. During the pandemic, the need for companionship became a driving force behind pet adoption and purchase, causing the pet population to soar.
Emerging Trends
This transformation in the pet industry can be attributed to several factors. Urbanisation played a pivotal role, as nuclear families in urban centres started embracing pets as integral family members, rather than just guard dogs, as was the case in the past. Remarkably, couples now encourage their children to refer to their pets as brothers or sisters, a concept unimaginable a decade ago. Previously, pets were often tethered indoors and restricted to the floor, but now, they roam unleashed, snuggle on couches, and even share beds with their parents. Indians have transitioned from being pet owners to becoming pet parents, reflecting a shift in attitudes and values. This change is driven by aspirational goals and self-sufficiency, causing people to reconsider traditional family models. The younger generation will play a significant role in propelling this transformation even more. Recognising the importance of happiness and freedom from financial liabilities, they will opt for pet parenting over parenthood.
Key Startups in the Indian Pet Care Space
● Drools: Drools specialises in pet food, offering a diverse range of nutritionally balanced options for pets. They cater to various dietary needs and preferences of pets, ensuring their health and well-being.
● Heads Up For Tails: It’s a pet care brand that provides a wide array of products and services catering to the needs of pets and their owners. From premium pet accessories to grooming services, they aim to enhance the lives of pets and their families.
● Just Dogs & Zigly: Just Dogs and Zigly are retail stores offering a curated selection of pet products along with grooming services. They provide a convenient one-stop destination for pet owners to fulfill all their pet care needs.
● Supertails: Supertails operates an online platform offering a comprehensive range of pet products along with the convenience of online vet consultations. They prioritise the health and happiness of pets by providing access to essential supplies and professional advice.
● Vetic: Vetic is a chain of veterinary clinics dedicated to providing high-quality medical care for pets. They offer a range of services including routine check-ups, vaccinations, surgeries, and emergency care, ensuring the well-being of pets across the country.
● Wiggles: Wiggles is a direct-to-consumer brand specialising in pet products. They offer a wide range of innovative and high-quality products tailored to meet the unique needs and preferences of pets and their owners.
Market Size and Investment Scenario
The pet care market size is estimated to be around $1.2 billion as of now and pet food commands 80-90 per cent of this. With more products and professional services hitting the market along with increasing pet parent knowledge the market is expected to expand rapidly. So far the Indian pet care market has seen a total investment of more than $170 million with Drools bagging the biggest chunk of $60 million last year from L Catterton. Between 2021 and 2022 HUFT raised $37 million led by Verlinvest and Sequoia Capital India and Just Dogs raised $7 million from The Sixth Sense Venture. Recently Supertails closed a funding round of $15 million led by RPSG Capital Ventures along with existing investors such as Fireside Ventures, Saama Capital, DSG, and Sauce VC. Other VCs who are part of this space are Anthill Ventures, Panthera Peak Ventures, Info Edge, and Point One Capital. Some top-level angels have also invested in the pet care space - Cred founder Kunal Shah, Mamaearth’s Co-founder Varun Alagh, ShareChat’s Co-founder Farid Ahsan, Lachy Groom, Utsav Somani, Nitin Saluja (founder Chaayos) and Ritesh Agarwal (CEO), among many others.
Emerging Startups and the Way Forward
The industry is seeing more entrants coming into the space like Sploot (Pet Products, Dog Walking/ Home Grooming), Zoivane (Pet Products), Awwzo (Pet Boarding/Daycare), and Snouters among many others.
The willingness of pet parents to invest in their pets as they learn more about pet parenting and their increasing disposable income highlights the immense potential in this market. We will see a lot of new and innovative pet products aimed at the health of pets be it food, treats, or grooming and also many unorganised sectors like grooming, boarding, and training will be organised with companies launching professional services. The pet care market has just started to warm up and its growth is expected to grow at a CAGR of ~20 per cent between 2022-32.
Although the Indian pet care industry holds vast growth potential, it is crucial to understand the current needs of pet parents. It is essential to look to markets like the US, Europe, or Australia for inspiration but adapt solutions with an Indian touch. Addressing genuine pain points and providing guidance to pet parents will be key to long-term success in this evolving industry.
The author is Partner, Incubate Fund Asia
