Throughout my time writing for Pet Age, I’ve often assumed that my primary audience has been in the U.S. However, I know that we don’t live and work in a vacuum. The internet has made instantaneous communication, international trade and global publishing daily parts of our lives. Because of this, I can’t necessarily think only in a local, regional or even national point of view.
Therefore, it’s time to expand my scope.
The pet trade on the whole has been in an era of massive expansion outside of the U.S., most notably in China and Southeast Asia. The pet trade in this region has grown by leaps and bounds, which can provide both challenges and opportunities to those of us stateside.
In the past few years, the market for pets in China has expanded dramatically. According to a May 2017 market research article from Daxue Consulting, the market expenditure for pets and pet accessories in China exceeded $17.7 billion, compared to the estimated U.S. expenditure of $66.75 billion. While China’s amount is much lower, current forecasts indicate its growth rate to be nearly 21 percent, with potential market expenditure nearing $30 billion in the coming years. With that level of growth, it’s unwise to underestimate China within the pet trade.
To what can we attribute this growth, though? Daxue Consulting links the growth in the pet trade to an overall increase in discretionary income, especially for people living within Tier 1 and Tier 2 Chinese cities. The expanding middle class in China has led to additional leisure time, more money to spend on leisure items such as pets and a better standard of living for many Chinese. The company further attributes the increase in pet ownership to increased celebrity profiles in China. Chinese celebrities, such as Fan Bingbing—the actress who played Blink in “X-Men: Days of Future Past”—have been noted to have pets, leading to their fans to follow in kind. Pets are viewed not only as companions, but as status symbols: having a pet represents having ‘made it’ within the transforming Chinese culture.
Forbes magazine, in fact, has made even more drastic predictions for China’s increasing pet market. Citing a Euromonitor research forecast, Forbes contributor Marianna Cerini estimates China’s pet industry to grow by more than 50 percent by 2019, rapidly outpacing U.S. with a 30 percent annual growth rate in the pet food market, worth $50 billion on its own. Cerini cites further interest in large pet fairs, such as Pet Fair Asia and the Shanghai International Pet Expo, which can draw crowds of over 50,000 attendees.
However, what does this mean for U.S. pet retailers? Firstly, let us look at the basic economic concept of supply and demand. With demand increasing for all forms of pets within Southeast Asia, pet retailers must pay even closer attention to breeding trends and seasonality. If an overseas trend sees a spike in sales for ball pythons or crested geckos, your local wholesaler may not be able to keep up with the demand for these reptiles. This, in turn, may lead to increased prices or outright unavailability for your chosen species.
Counteracting these factors requires significant attention to detail. Firstly, make sure to establish and maintain a positive relationship with your breeders and wholesalers, especially if they have an international sales base. Regular conversations with your wholesaler can ensure that you stay abreast of the most recent trends, breeding schedules and other anomalies within the pet trade at large. Further, they may be able to provide insight into alternative animals that you may look at offering in lieu of higher-priced, harder-to-acquire animals. That relationship with your wholesalers and breeders keeps your finger on the pulse of the reptile world; keep those up at all cost!
This issue of high reptile demand in Asia can be aggravated by the fact that a retailer local to China or Southeast Asia will be more likely to sell to a closer buyer, rather than exporting to the United States. As such, reptiles that would normally be exported to the U.S. are, instead, being sold in China itself. This, too, drives up demand as the global supply dwindles. Keep abreast of major sales trends not just in your own region, but globally. If, for instance, sales of water dragons began to spike in China, that would concurrently make it less likely for a U.S.-based retailer to import them from mainland Asia.
Further, if your store is larger or if you do most of your business online, you may wish to expand your own sales into the burgeoning Asian market and beyond. As I’ve mentioned in numerous past articles, the vast preponderance of a successful reptile retailer’s profit comes not from the sale of a pet, but rather from subsidiary sales such as housing items, lighting, and other necessary items. As such, an online store can provide a substantial source of additional revenue with little more set-up outside of that which you might provide through your brick-and-mortar store’s website.
The biggest hurdle to this, naturally, comes in terms of logistics. If you choose to offer international sales, you will come into conflict with two great bugbears of sales: shipping and customs. International shipping rates can be difficult to navigate, both in terms of cost and in terms of timing. Chinese New Year, for instance, is legendary for its tendency to grind international shipping to a halt. Be sure to check with your shipping company to explore the best possible shipping options, should you choose to offer your wares overseas.
The market expansion for pets in China and Southeast Asia represents a phenomenal opportunity for all those willing to take advantage of it. The increase in reptile sales, no matter the location, is a positive for the entire pet industry. But even if your scope is a little closer to home, it still pays to keep an eye on what’s happening on the other side of the world.