Pet Industry of South Korea

Pet Industry of South Korea

South Korea is now faced with an aging society and the rise of single-person households. In response to the current circumstance, the number of pet household surpassed 10 million. As roughly 1 in 5 Koreans now owns companion animals.

As a new potential market, pet industry of South Korea has developed a range of new, luxury services for pet ranging from premium pet care options and television channels for dogs to pet hotels, pet insurance, high-end dog clothing and accessories, all-organic pet foods and even full-on dog funeral services. New family structures as single-person household or aging society has led animals to become concrete members of the family who are loyal and welcoming to their owners. As more people become attached to their pets, the related industry in turn grows, fueled by new demands.

/ Population
51,677,054 persons
(as of October 2016, Ministry of Interior)
Pet Population
970,000 animals with 10 million households
(as of 2015, Ministry of Agriculture, Food and Rural Affairs)

l Domestic pet market size

/ Year / Domestic Pet Market Size
2012 / 765 Million US Dollars
2015 / 1.53 Billion US Dollars
2020 / 4.95 Billion US Dollars
(from Nonghyup Economic Research Institute Report 2015)

l Pet Food market size

/ Year / Pet Food Market Size
2012 / 272 Million US Dollars
2015 / 310 Billion US Dollars
2020 / 511 Billion US Dollars (Forecast)
(from Nonghyup Economic Research Institute Report 2015)

l Average expense for pet per household

(as of 2015, Korea Consumer Agency)

l Pet food average price (Price/kg)

1. Wet food

Premium 8.46 US Dollars and above

Middle price 4.23 US Dollars ~ 8.46 US Dollars

2. Dry food

Premium 6.76 US Dollars and above

Middle price 3.38 US Dollars ~ 6.76 US Dollars

Low price below 3.38 US Dollars

(From Euromonitor International Report on Cat & Dog food 2016)

l 10 Main Players for pet food (70% occupied by foreign companies)

/ 1. Royal Canin Korea: 11.8%
▷ Royal Canin brand has a loyal consumer base and is widely distributed via channels like hypermarkets, pet superstores, pet shops, veterinary clinics and internet retailing.
2. Lotte Nestlé Korea Co Ltd: 11.5%
▷ Under the operation of Lotte group (Previous company name: Nestlé Purina Korea Ltd until 2013), with Lotte’s strong retailing network and support, Lotte Nestlé Korea achieved a better performance in pet food in recent.
3. Mars Korea Inc: 10.6%
▷ Mars Korea Inc’s Greenies was the leading brand in cat treats and mixers in 2015 with a value share of 17%.
4. Texas Farm Products Co Inc: 6.9%
5. CJ Cheiljedang Corp: 6.1%
6. Procter & Gamble Co. : 3.8%
7. The Cargill Agri Purina Inc : 3.7%
8. Hill's Pet Nutrition Inc: 2.6%
9. Pet World Co Ltd: 1.9%
10. Woosung Feed Co Ltd: 1.4%

l Distribution channel & Purchasing Behavior

Imported pet food brands typically have separate product lines for the hypermarkets, internet retailing, veterinary clinics and pet shops channels. Even though they are sold under the same brand as those available in other channels, products distributed via veterinary clinics usually have “Veterinary Use” or similar terms printed on their packaging providing better perception to royal customers who are willing to pay for premium quality products with high price. Local pet food companies tend to focus on distributing their brands via hypermarkets and internet retailers or pet shops and veterinary clinics.

South Koreans are highly interested in health-oriented pet food products. These include therapeutic brands, which are typically sold through veterinary clinics. However, in line with the pet health and wellness trend, some owners are now also choosing to prepare homemade dog food, as they believe it to be more nutritious. This could potentially limit demand for packaged pet food products over the forecast period.

Pet food market in South Korea has been dominated International brands thanks to their wide distribution coverage and premium brand images for a long time. However, consumers show the high interest on domestic brands and are seeking for the quality products of which have improved significantly in recent years.

In South Korea, people who leave food out for stray cats are known as “cat moms and dads”. Somewhat paradoxically, this practice could hamper demand for packaged cat food products. This is because so-called cat moms and dads often leave human foods such as canned tuna and salmon out for stray cats instead of wet cat food products, as while the former are considered unhealthy, they tend to be much cheaper.

l Photos of retailing channels

1. Hyundai Department Store (Main Branch) – Premium Quality/High Price

- Italian or French coat made in South Korea cost 28 US Dollar ~ 168 US Dollar

2. Molly’s

E-Mart Co Ltd. launched house brand tilted Molly’s. It was the most prominent private label in pet food in domestic market of 2015. While Molly’s mainly competes in the mid-priced and economy segments, E-Mart also recently launched Molly’s Science, which is exclusively distributed via Molly’s Pet Shop outlets. Molly’s Science is manufactured by Dr. Clouder, a German company which is renowned for its high quality standards. There are total 31 branches across the country.

3. Galleria Pet Boutique Shop

- High-end, Luxury, upscale boutique pet shop

4. Internet Retailing

4.1. Interpark PET (Open market - http://www.interpark.com/pet)

- Product line : Mid-priced and economy priced pet food, toys, clothing etc.

4.2. Mely Mely (Online Mall : http://www.melymely.com/)

- Product line: Mid-priced and above priced pet food, toys, clothing, Nutritional supplements

l Pet Exhibitions

1. K-Pet Fair

Date: November 25 -27, 2016 (the 8th) 10:00 ~ 18:00

Venue: KINTEX Ilsan (Hall 7) (210 companies)

Product: Food, Snacks, Beauty Products, Fashion goods, Toys, Sports products, Training equipment, Toilet, Sand, Pad, Disinfectant, Deodorant, Hair removal products, House, Sitting cushion, Carrier, Fence, Cat tower, Car seat, Display Shelves, Thermometers, Hygrometer, Flooring, Rehabilitation tool & machine, Medicine, Nutritional supplements, Insurance, Café, Funeral, Hotel, Beauty salon, Mobile application, Fish tank, Pump, Filter, Heater, Light, Food, Supplies

Website: http://www.k-pet.co.kr/

2. Korea Pet Show

Date: November 25 -27, 2016 (the 20th) 10:00 ~ 18:00

Venue: aT Center, Exhibition Hall 1, 2 (130 companies, 330 booths)

Website: http://www.kopet.com/

3. BICAS (Busan International Companion Animal Show)

Date: October 13 - 15, 2016 (the 4th) 10:00 ~ 18:00

Venue: BEXCO, Exhibition Hall 2, A-C

Website: http://www.kopet.com/