As people spend more-and-more on their cats and dogs, investors have started to pay attention to the pet e-commerce industry.
Three pet e-commerce companies have raised money in the past seven days. Petkit, a wearable device manufacturer for dogs, raised $20 million in Series C funding from Qiming Venture Partners and GGV Capital; pet product seller Chongjia got at least Rmb10 million ($1.5 million) from K2VC and Lightspeed China Partners for its angel round; and Touchdog, another pet product seller, raised over Rmb10 million from TenplusVC and other investors.
The Chinese have started to pay an increasing amount of attention to their pets, and are willing to spend more on them too. According to research on the Chinese pet market, 73 million people in China had pets last year, more than three-quarters of those with cats or dogs. And the annual spend their domestic animals was up 15% last year to Rmb5,016 on every cat or dog.
“Urbanisation in China has led to the growth of pet raisers,“ said Yi Ju, chief executive of pet e-commerce company MollyBox. “Pet e-commerce has grown more than pet product brands.” Because it is easy to enter the market and the technology is simple, there are a lot of pet product brands, but there is no leading player. Pet product e-commerce sites have benefited because they can guide the consumers on what to buy.
MollyBox is a cat food and related product selling site, which runs on a monthly subscription model. The Shanghai-based company raised Rmb6.37 million Series A funding in May last year from DCM Ventures, Atom Venture and Unity Ventures.
Ju said that the company intends to announce its next round of fundraising in March. It will be about $20 million and led again by DCM. MollyBox is also preparing for a $15 million follow-on in April. Proceeds will be used to expand the company's user base and product lines to include dog food and products. The company is trying to build a Costco-like business model, explains Ju in the way that it sells selected pet products to its paid members.
The opportunities are certainly there. The pet market in China is expected to reach Rmb262 billion in 2021 and it is currently very underserved. Compared to the US, where more than two-thirds of families have a pet, only about 17% of Chinse families have a pet. The sale of cat products, in particular, is booming and pet e-commerce is convenient for pet lovers with its adhesive and subscription-based service.
And with the increasing popularity of pets, ancillary businesses are emerging. Related medical and insurance services for pets have started to develop and Ju says that MollyBox is signing bloggers to distribute more pet-related content on social media. China is turning from a nation of pet lovers into pet raisers.