Market Update: Online petfood and treat sales
Niche markets and rising pet ownership will strengthen online sales
According to IBISWorld’s Online Pet Food & Pet Supply Sales market research report, the online market size for petfood treats and supplies sold on the Internet will reach US$3.2 billion in 2014. That's an annual growth rate of 7.8% (from 2009â€“2014, projected). Online petfood sales totaled US$666 million in 2011, according IBISWorld. The food and treat category comprised roughly 33% of the US$2 billion online pet-related sales in 2011.
"With rising pet ownership among US households and more owners humanizing their pets, online petfood and supply stores have fared well over the five years to 2014," says IBISWorld. "Increasing popularity of premium petfood supplies has also fueled industry growth over the period; since premium goods are typically priced higher, they provide a good source of revenue for players. Nevertheless, increasing competition will likely constrain profit margins." Rising pet ownership in the US and growth across the e-commerce sector have caused the industry to experience overall growth, despite the recession.
Currently the online petfood and treats industry exhibits a low level of concentration. The top four companies in this industry comprise a combined share of about 16.8% of total revenue from all online sales of pet supplies in 2014. Meanwhile, the majority of revenue is distributed among several other operations. "Some competitors, like Walmart, are large retailers that earn substantial overall revenue, but only a marginal share is relevant to the pet industry," explains the market report. "Other companies, like PetSmart, are wholly pet-related, but they earn only a marginal…