Social media and networks are an emerging sales channel for pet food in Latin America, with the potential to become a market force. Numerous independent pet food sellers are increasingly using Marketplace, the sales platform of Facebook, to promote and distribute pet food in every country in the region, from Mexico to Argentina.
It is difficult to estimate the current size of this nascent channel. Yet, it is likely to continue developing as more consumers are turning to such a popular and user-friendly marketplace.
Most sellers are small, independent distributors who offer free delivery services in surrounding neighborhoods, or pickup service. Usually, delivery comprises a small area due to the logistical limitations of the seller, so the number of daily orders is likely small. Yet, the aggregation of thousands of small independent sellers playing together sets up the channel as the next pet food market force.
One of the advantages of social networks commercially is the personalized service and quick delivery response that sellers may provide. Such distributors usually pick a couple of pet food brands to offer, sometimes becoming brand ambassadors.
Moreover, online sellers often offer lower prices than retailers due to squeezed mark-ups. As independent sellers get their inventory directly from large distributors or discount stores, they help reduce the total intermediation profit margin.
By the same token, as retail margins for pet food products vary from 30% to 100%, some marketplace sellers prefer sacrificing a portion of their mark-up to gain new customers.
Facebook Marketplace pet food sellers may face higher costs for deliveries and for product restocking. Furthermore, due to the small space available for stocking—usually, the sellers’ homes—product variety is limited.
The squeezing of profit margins may hinder these sellers’ long-term prospects, limiting the scalability of their businesses. Therefore, only a few Facebook Marketplace pet food sellers likely achieve a long-term profitable business before shutting down.
Nonetheless, social network pet food sellers should be considered an emerging market force that grows during economic setbacks.
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).
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