The online market is dominated by Mercado Libre and Amazon, leaving little share for pet specialist startups.
Laika is a Colombian startup that just entered the Mexican online pet food arena in 2020. Its business model is similar to the leading domestic online platforms, Mercado Libre and Amazon, yet Laika focuses solely on pet care products and services, such as online veterinary consultations.
Laika uses a small network of deliverers employed by the company and also relies on external delivery services to distribute products in the cities where the company does not operate. According to an article by Expansión business magazine, the platform has nearly 100,000 registered users and just 25 delivery employees.
Is there real competition in Mexican pet food e-commerce?
Given the dominance of Mercado Libre and Amazon in the online arena, the journey of emerging e-commerce specialists, including Laika, might take some time.
To exemplify such a dominance, in terms of distributors, Mercado Libre possesses 347 “official” online sellers just for one leading premium pet food brand, Nupec, and another 902 “best sellers” for the same brand.
The platform totals 10,628 online “best sellers” for overall pet food products. Mercado Libre uses mostly independent and external delivery companies to distribute its pet food products across the country.
Amazon Mexico, on the other hand, has fewer sellers than Mercado Libre, yet it also counts thousands of independent pet food distributors. Amazon also uses external deliverers.
Small online pet food businesses struggling to take off
Although online pet food sales are rapidly increasing in the Mexican market, the online segment is small compared to traditional brick-and-mortar pet retail. With only two online giant platforms likely driving growth (along with supermarkets), smaller online specialists struggle to expand.
Emerging online pet retailers must find the key to compete and gain consumer loyalty and preference through diversification and service. This is no easy task, considering the mastery of fast delivery and service the two giants, Amazon and Mercado Libre, are currently achieving.
Iván Franco is the founder of Triplethree International and has collaborated on hundreds of research projects for several consumer goods industries. He was granted the Global Consultant of the Year award by Euromonitor International and authored the book 17 Market Strategies for Growth (in Spanish).
Whether you’re looking to enter the pet food world or have recently crossed the bridge from human CPG to pet food, here are some things to consider as you grow your business.
