Launching an online store is a rather straightforward task, for pet food producers and other consumer goods companies alike. Several website providers in Mexico offer fully functional e-commerce stores ready to operate. However, a digital platform is just one of many steps to attain the experience of selling pet food products online.
Currently, there are nearly 15 online stores of leading retail chains that distribute pet food in the country, such as Walmart and HEB. Also, there are e-commerce specialist platforms such as Amazon, Linio and Mercado Libre. Furthermore, pet food retailers like Petco and Maskota also manage an online business. And finally, numerous independent online pet food stores are emerging, trying to take a piece of a multimillion business in Mexico.
Some of the nascent e-commerce local platforms include Croquetasperro, Petsy, Animall, Petnutrition, Safari, Croquetasadomicilio, Mistermascotas, Perroazul, plus many others. In addition, several local pet food brands are launching state-of-the-art websites that include an online store.
A key question arising from the pet food dot-com boom is, will this channel gain pet food market share?
E-commerce platforms are multiplying due to the relatively low cost of setting them up compared to a physical outlet. As shipping services are also expanding in Mexico, the cost of delivery is no longer a barrier to distribute pet food online.
An interesting claim of such online outlets is nationwide distribution, as they can send their products anywhere in the country using a cargo company. At the same time, some local pet food brands offer large profit margins to distributors. Thus, e-commerce stores can compete through appealing pricing promotions and discounts.
In Mexico, online sales are unlikely to overtake traditional pet food retail channels in the short and medium terms. E-commerce pet food sales in the country are still a negligible market if we account for total value share.
The two barriers for further online success are first, Mexico has a low credit card penetration rate compared to most countries in the Latin American region. Second, a great portion of the country’s consumers do not trust online sales, especially if the websites are new and unpopular.
Therefore, the existence of numerous online pet food stores does not necessarily mean greater online sales. Perhaps it is just a matter of time for online pet food businesses to succeed, depending on the rapid development of alternative means of payment in the e-commerce arena.
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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