In the heart of Shanghai sits the pet- and garden-filled headquarters of a small but rapidly growing pet food company that exemplifies China’s quickly developing pet food market. Navarch Pet Products has been in existence for only 10 years, but like the young, emerging market it’s part of, it’s developing at lightning speed and demonstrating that, in areas like e-commerce and m-commerce (mobile), China is ahead of more mature pet food markets.
Nearly 48 percent of China’s pet food sales – currently at US$1.5 billion – take place online, according to information presented by GfK at Petfood Forum China. Navarch’s strategy falls exactly into line with that. Established only in 2011, its e-commerce business currently accounts for 78 percent of its sales, with 80 percent happening via mobile devices. Navarch’s flagship store on Tmall.com, one of the leading e-commerce portals in China, has been the top-selling one for pet food since 2014. In 2012, the company even helped establish standards for promoting and selling pet food on Alibaba, the Chinese online giant, and became the top pet food brand sold online in three months.
In 2016, during a big annual promotion with Tmall.com on “Double 11 Day” – China’s version of Cyber Monday – Navarch recorded sales of 10 million CNY (US$1.5 million) in just 49 minutes. This was tracked in real time on the back-end software from Alibaba that the company uses; every Navarch associate has access to the software to view not only real-time sales but also detailed demographics on who’s buying its pet foods.
In addition, Navarch’s ecommerce business includes its own brand consisting mainly of breed-specific dog foods; about 20 young associates serving as online community service staff, each specializing in an e-commerce platform and product line; and a bank of mobile phones, each holding 5,000 customers/community members and programmed to automatically send promotions to all those customers at once. (Watch for an in-depth article about Navarch in 2018.)
Adopting global pet food trends
At Pet Fair Asia 2017, held August 24-27 in Shanghai, Navarch was just one of many pet food companies with large stands and a significant presence. In fact, at least three of the trade show’s nine halls were devoted to pet food, with part of another devoted to pet treats and snacks.
In strolling through the aisles past these numerous stands, it quickly became clear that the Chinese pet food market is adopting, and adapting, many pet food trends seen globally and in mature markets. Products from domestic pet food companies, in addition to ones from multinationals, boasted claims like natural and grain free – which now make up 27 percent and 6 percent, respectively, of the Chinese pet food market, GfK says – as well as ones such as real (in terms of ingredients), fresh and organic.
Navarch was just one of several companies specializing in breed-specific dog foods, showing the diversity of the small but growing pet ownership in China. Newer categories like freeze-dried pet foods were also represented, though most of those products on display at Pet Fair Asia came from outside China, mainly from New Zealand.
Despite their rapid growth, Chinese pet food brands do still have a ways to go to win over Chinese pet owners. To that end, many of their packages, promotions and trade show stands feature Western models and photos, even of children – lending a perception, apparently, that the brands are international and, thus, credible and trusted to be safe and of high quality.