United States nearly 90% of pet owners choose to buy supplies online, and the cognitive bias of traditional shelf e-commerce and pet vertical e-commerce is gradually disappearing.
Recently, RBC Capital Market, an international investment bank, conducted a special survey on the growth trend of online pet goods shopping.
According to survey data, 88.9% of pet owners in the United States chose to buy supplies online by 2024, up from 82.3% in 2023 and 78.4% in 2022. And nearly a quarter of the 11% of consumers who don't choose an online shopping channel are planning to try to complete a purchase decision through this channel.
However, when using the websites of various online retailers, 79.6% of consumers shop from Amazon, 53.1% shop at Chewy, and 32.9% buy pet products from Walmart. Other notable retail sites include Petco (31.4%), PetSmart (29.4%), and Target (27.9%), among others.
The survey also noted that consumers have significantly shifted to the Amazon platform channel due to increased churn rates at Chewy and Petco. Thereinto:
As of July 2024, 74.3% of respondents said they were buying pet supplies from Chewy. This is higher than the 61.2% figure in 2023. And the majority of consumers (94%) plan to buy more at Chewy, with 79% using its automated shipping program – up from 64% in 2023.
But while customers' willingness to spend is rising, the overall number of Chewy's users is declining. According to the survey, Chewy lost 7.2% of its customers, mainly due to price (49.6%) and delivery issues (12.5%). Most of these lost consumers have turned to other online shopping platforms. Among them, Amazon (63.8%), Walmart (32.5%) and Petco (31.3%) benefited the most from Chewy's customer churn.
Interestingly, while the head pet e-commerce platform Chewy is suffering from a decline in the number of users, another giant, Petco, is also in the same predicament.
According to the survey data, in 2024, 66.7% of pet owners chose to complete their consumption on the Petco platform, which is higher than 52.2% in 2023. It is worth mentioning that the retailer's premium membership program, Vital Care Premier, grew from 40% to 66.7%, with dog grooming, training and veterinary services being the most popular.
In terms of the number of users, 14.4% of consumers chose to stop shopping at Petco, down from 19.4% in 2023. Among the key factors for consumers opting out of the platform channel, the proportion of price complaints decreased by 38%. In addition, many of Petco's former customers now choose to shop at Amazon (55.7%), Chewy (47.6%) and Walmart (41.6%).
On the whole, the competition between vertical segmentation e-commerce and integrated shelf e-commerce still exists in the pet industry. The question of "small and beautiful" or "big and complete" is still plaguing the consumption decisions of pet users.
However, this perception gap has been gradually closing in recent years. For example, the problem of user transfer pointed out by the survey data is a good proof of this. The reason behind this may lie in the continuous in-depth penetration and expansion of the membership system of major platforms.
In the early years, pet vertical e-commerce broke out of the encirclement with high standards of professionalism and service experience. Taking the head pet e-commerce platform Chewy as an example, it even overtook Amazon in the pet subcategory, and once became the preferred channel for online shopping in the United States pet market.
But as Amazon Prime has become a strategic focus and has gained widespread recognition among consumers around the world for its unique advantages and appeal, this advantage has been shrinking. According to the latest data, the subscription service fee for Amazon Prime members will exceed $40 billion per year in 2023, a rapid increase from $35.2 billion in 2022. This also indirectly illustrates the uniqueness of its membership services.
However, despite the overall decline in users, pet vertical e-commerce still has strong development potential in overseas markets. Taking Chewy as an example, its comprehensive revenue in the first quarter of this year was 2.878 billion US dollars (about 20.885 billion yuan), an increase of 3.1% over the 2023 fiscal year; Net profit nearly tripled year-on-year to US$66.9 million (about 485 million yuan).
Of course, this situation is also to be expected. In the view of pet industry observation, whether it is a comprehensive shelf e-commerce platform or a pet vertical e-commerce platform, after its volume enters a certain scale, it will inevitably turn to the "large and complete" full-coverage development stage, and begin to confront friends in the market. At present, it is still unknown who killed the deer.
On the other hand, China's pet e-commerce platforms: Taotian, JD.com, Douyin, and Pinduoduo have become the mainstream channels of choice for users by relying on different platform characteristics. After that, emerging e-commerce platform channels such as Kuaishou, Xiaohongshu, Bilibili and even Dewu are also eyeing up. Although its situation is completely different from the pet e-commerce market in United States, it also has certain reference and reference significance.
As for how pet e-commerce will develop in the future, the pet industry observation will continue to pay attention. For those who are interested in this topic, please leave a message in the comment area below to discuss, or add a small editor to communicate on WeChat.