Pet products in vietnam

PET PRODUCTS IN VIETNAM In 2020 pet products registers 10% current value growth as sales reach VDN249 billion ▪ Sales of other pet products continue to benefit from the incipient pet humanisation trend ▪ Cat litter is the highest growth category in pet products in 2020, rising by 12% to reach sales of VND7.3 billion ▪ Hoang Anh Co Ltd maintains its leading position in pet products with a 17% retail value share in 2019 ▪ Pet products is slated to rise at a current value CAGR of 10% (5% in constant 2020 terms) over the forecast period to reach VND394 billion in 2025

Pet Products in Vietnam Euromonitor International May 2020 PET PRODUCTS IN VIETNAM LIST OF CONTENTS AND TABLES Headlines Prospects Pet Humanisation Trend Continues To Boost Sales of Pet Products Changing Attitudes Towards Animals Likely To Underpin Sales Growth Pet Dietary Supplements Remains A Negligible Category Competitive Landscape Hoang Anh Co Maintains Its Lead in Pet Products Pet Products Remains Highly Fragmented New Product Launches Have the Potential To Spark Dynamism Category Data Table Table Table Table Table Table Table Table Table Sales of Pet Products by Category: Value 2015-2020 Sales of Pet Products by Category: % Value Growth 2015-2020 Sales of Pet Healthcare by Type: % Value 2015-2020 Sales of Other Pet Products by Type: % Value 2015-2020 NBO Company Shares of Pet Products: % Value 2015-2019 LBN Brand Shares of Pet Products: % Value 2016-2019 Distribution of Pet Products by Format: % Value 2015-2020 Forecast Sales of Pet Products by Category: Value 2020-2025 Forecast Sales of Pet Products by Category: % Value Growth 20202025 © Euromonitor International Passport i PET PRODUCTS IN VIETNAM PET PRODUCTS IN VIETNAM HEADLINES ▪ In 2020 pet products registers 10% current value growth as sales reach VDN249 billion ▪ Sales of other pet products continue to benefit from the incipient pet humanisation trend ▪ Cat litter is the highest growth category in pet products in 2020, rising by 12% to reach sales of VND7.3 billion ▪ Hoang Anh Co Ltd maintains its leading position in pet products with a 17% retail value share in 2019 ▪ Pet products is slated to rise at a current value CAGR of 10% (5% in constant 2020 terms) over the forecast period to reach VND394 billion in 2025 PROSPECTS Pet Humanisation Trend Continues To Boost Sales of Pet Products Buoyant sales of pet products can be attributed primarily to the increasing propensity among Vietnamese consumers to treat their cats and dogs as fully-fledged family members This marks a major departure of the previous cultural norm of keeping such animals solely for traditional functional roles, mainly guarding the home in the case of dogs or catching rodents in the case of cats In line with the pet humanisation trend, demand for all types of pet products is on the rise in all parts of the country For example, many people are taking better care of their pets’ health and this involves purchasing pet healthcare products and pet dietary supplements on a more regular basis Some consumers are also becoming more willing to spend money on nonessential items that can help them to improve the general welfare and appearance of their pets, including pet bedding and even clothing for dogs, with Tet costumes for pets seen on retail shelves since 2019 These trends all supported strong growth in sales of pet products over the course of 2019 a trend likely to continue driving the positive development of the category over the forecast period Changing Attitudes Towards Animals Likely To Underpin Sales Growth In the past dogs and cats were regarded as dirty and untameable and not considered suitable for human companionship However, now that they are increasingly being seen favourably, especially among younger people, growth in the cat population in particular has boosted sales of cat litter Pet owners’ worries about diseases and sanitation still exist however with concerns about rabies and pet allergies common amongst some Vietnamese people However, rising disposable incomes and better living standards are making people more inclined to be charitable towards animals, resulting in more humane behaviours, with this promoted by the passing of new breeding laws in 2018 Thus, Vietnamese people are more likely to spend money on their pets to ensure their welfare than they were in the past Pet Dietary Supplements Remains A Negligible Category Pet dietary supplements remains the only pet products category to register negligible sales in Vietnam and this is mainly due to low awareness of the benefits of such products Furthermore, with many pet food brands advertised as meeting the complete nutritional needs of cats and dogs and other types of pets, it is not uncommon for pet owners to perceive pet dietary © Euromonitor International Passport PET PRODUCTS IN VIETNAM supplements as non-essential items In addition, high prices mean that demand for pet dietary supplements remains largely limited to affluent households, especially those with purebred dogs and cats such as Alaskan Malamutes, Samoyeds, French Bulldogs and Persians Because pedigree dogs and cats are expensive to obtain and care for, their owners are usually willing to spend considerable sums on products that promise to keep them in good health and which can extend their lifespans Given the increasing popularity of purebred dogs and cats in major cities such as Hanoi and Ho Chi Minh City, pet dietary supplements is a category that has reasonably good potential for development over the forecast period, despite negligible sales However, it is likely to take a considerable amount of time before the category truly enters the mainstream in Vietnam COMPETITIVE LANDSCAPE Hoang Anh Co Maintains Its Lead in Pet Products Hoang Anh remained the overall leader in pet products in 2019 mainly due to the combined popularity of its brands Fay and Palma in pet healthcare Furthermore, the company’s extensive distribution network means that its products are sold in hypermarkets, supermarkets, pet superstores and pet shops throughout Vietnam This has given Hoang Anh Co a major advantage over its competitors, most of which distribute their brands exclusively through pet superstores, pet shops or veterinary clinics Moreover, Hoang Anh is actively engaged in efforts to maintain affordable prices, which has broadened its appeal These factors are likely to ensure that the company will maintain its strong lead in pet products throughout the forecast period Pet Products Remains Highly Fragmented With the exception of category leader Hoang Anh, no company present in pet products was able to achieve a double-digit value share in 2019 The highly fragmented competitive environment in the category can be partially explained by the fact that product types such as pet beds, clothing, leashes and other accessories are high-volume, low-profit items in which it is virtually impossible for one company to make its mark Consumers typically base their purchasing decisions on price and design rather than brand image or reputation, thus meaning that brand loyalty is low within with the category overall In addition, low-quality, low-cost imports from other Asian countries such as China and Thailand are virtually ubiquitous in pet products This seriously erodes opportunity for brands to develop any kind of loyalty, making it more challenging for well-established players to make value share gains However, while this situation is set to continue throughout the forecast period, more pet owners are showing an interest in pet grooming and associated products, which could boost sales of higher value products Moreover, brands in this category are likely to become increasingly diverse and cater to a range of budgets and price segments New Product Launches Have the Potential To Spark Dynamism With sales in pet products highly fragmented, it can be difficult for new products and new players to make much of an impact As a result, most players concentrate on widening their distribution networks and less so on marketing or new product development Nevertheless, the category witnessed the entry of some interesting new products at the end of the review period, not least the extension of the pet food brand Fitmin into pet products with the launch of Fitmin Daily Use/Regeneration Genki cat litter meanwhile expanded its range of products to include scented cat litter in 12 variants These new products have the potential to pave the way for similar new launches during the forecast period © Euromonitor International Passport PET PRODUCTS IN VIETNAM Passport Although Catsan remains a strong brand, it faces increasingly intense competition from a variety of other brands the distribution of which is rapidly expanding Among the most notable of these are City Zoo Co Ltd and Perfect Companion (Vietnam) Co Ltd, which benefit from strong brand awareness and cross-merchandising Me-O cat litter, meanwhile, is managing to slowly grow its sales as it can leverage upon the strong image of the Me-O brand among cat owners It is also well distributed across channels and across regions and regularly benefits from promotional campaigns All of this bodes well for the brand’s future within cat litter over the forecast period, although its overall share remained low in 2019 CATEGORY DATA Table Sales of Pet Products by Category: Value 2015-2020 VND billion Cat Litter Pet Healthcare Pet Dietary Supplements Other Pet Products Pet Products Source: Table 2015 2016 2017 2018 2019 2020 3.8 26.0 113.3 143.1 4.4 29.2 128.2 161.9 5.2 33.0 145.5 183.7 5.8 36.9 161.5 204.3 6.5 41.1 178.5 226.1 7.3 45.5 196.4 249.1 Euromonitor International from official statistics, trade associations, trade press, company research, store checks, trade interviews, trade sources Sales of Pet Products by Category: % Value Growth 2015-2020 % current value growth Cat Litter Pet Healthcare Pet Dietary Supplements Other Pet Products Pet Products Source: Table 2019/20 2015-20 CAGR 2015/20 Total 11.5 10.7 10.0 10.2 13.8 11.9 11.6 11.7 90.7 75.1 73.3 74.1 Euromonitor International from official statistics, trade associations, trade press, company research, store checks, trade interviews, trade sources Sales of Pet Healthcare by Type: % Value 2015-2020 % retail value rsp Flea/Tick Treatments Worming Treatments Other Products Total Source: Table 2015 2016 2017 2018 2019 2020 52.6 8.3 39.1 100.0 52.9 8.1 39.0 100.0 53.0 8.0 39.0 100.0 53.5 7.8 38.7 100.0 54.0 7.6 38.4 100.0 54.2 7.3 38.5 100.0 Euromonitor International from official statistics, trade associations, trade press, company research, store checks, trade interviews, trade sources Sales of Other Pet Products by Type: % Value 2015-2020 © Euromonitor International PET PRODUCTS IN VIETNAM Passport % retail value rsp Accessories Beauty Products Other Total Source: Table 2015 2016 2017 2018 2019 2020 10.3 5.2 84.6 100.0 10.5 5.2 84.3 100.0 10.7 5.3 84.1 100.0 11.0 6.0 83.0 100.0 11.3 6.8 81.9 100.0 11.5 7.0 81.5 100.0 Euromonitor International from official statistics, trade associations, trade press, company research, store checks, trade interviews, trade sources NBO Company Shares of Pet Products: % Value 2015-2019 % retail value rsp Company Hoang Anh Co Ltd JBL GmbH & Co KG Sera GmbH Mars Inc City Zoo Co Ltd Perfect Companion (Vietnam) Co Ltd Others Total Source: Table 2015 2016 2017 2018 2019 18.0 3.8 2.2 1.1 1.0 0.2 17.8 3.8 2.2 1.1 0.9 0.2 17.5 3.7 2.1 1.1 0.9 0.2 17.2 3.6 2.1 1.1 0.8 0.2 16.6 3.5 2.0 1.1 0.8 0.2 73.6 100.0 74.0 100.0 74.4 100.0 74.9 100.0 75.8 100.0 Euromonitor International from official statistics, trade associations, trade press, company research, store checks, trade interviews, trade sources LBN Brand Shares of Pet Products: % Value 2016-2019 % retail value rsp Brand (GBO) Company (NBO) 2016 2017 2018 2019 Fay JBL Palma Sera Catsan City Zoo Me-O (Charoen Pokphand Group) Others Total Hoang Anh Co Ltd JBL GmbH & Co KG Hoang Anh Co Ltd Sera GmbH Mars Inc City Zoo Co Ltd Perfect Companion (Vietnam) Co Ltd Others Total 14.6 3.8 3.2 2.2 1.1 0.9 0.2 14.4 3.7 3.1 2.1 1.1 0.9 0.2 14.1 3.6 3.1 2.1 1.1 0.8 0.2 13.6 3.5 3.0 2.0 1.1 0.8 0.2 74.0 100.0 74.4 100.0 74.9 100.0 75.8 100.0 Source: Table Euromonitor International from official statistics, trade associations, trade press, company research, store checks, trade interviews, trade sources Distribution of Pet Products by Format: % Value 2015-2020 % retail value rsp Store-Based Retailing - Grocery Retailers Modern Grocery Retailers - Convenience Stores © Euromonitor International 2015 2016 2017 2018 2019 2020 90.8 6.0 6.0 90.6 5.8 5.8 90.4 5.7 5.7 90.3 5.2 5.2 90.1 5.4 5.4 89.9 5.8 5.8 - - - - - - PET PRODUCTS IN VIETNAM - Discounters - Forecourt Retailers - Hypermarkets - Supermarkets Traditional Grocery Retailers - Mixed Retailers Department Stores Mass Merchandisers Variety Stores Warehouse Clubs - Non-Grocery Specialists Pet superstores Pet shops Health and Beauty Specialist Retailers - Beauty Specialist Retailers - Chemists/Pharmacies - Drugstores/ parapharmacies - Other Health and Beauty Retailers Home and Garden Specialist Retailers - Home Improvement and Gardening Stores - Homewares and Home Furnishing Stores Other Non-Grocery Specialists Non-Store Retailing - Direct Selling - Homeshopping - E-Commerce Non-retail channels - Veterinary clinics Total Source: Passport 2.8 3.2 - 2.7 3.1 - 2.7 3.0 - 2.5 2.7 - 2.6 2.8 - 2.8 3.0 - 84.8 84.8 - 84.8 84.8 - 84.7 84.7 - 85.0 85.0 - 84.7 84.7 - 84.1 84.1 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 1.1 1.1 8.1 8.1 100.0 1.2 1.2 8.2 8.2 100.0 1.3 1.3 8.3 8.3 100.0 1.3 1.3 8.4 8.4 100.0 1.5 1.5 8.4 8.4 100.0 1.7 1.7 8.5 8.5 100.0 Euromonitor International from official statistics, trade associations, trade press, company research, store checks, trade interviews, trade sources Table Forecast Sales of Pet Products by Category: Value 2020-2025 VND billion Cat Litter Pet Healthcare Pet Dietary Supplements Other Pet Products Pet Products Source: Table 2020 2021 2022 2023 2024 2025 7.3 45.5 196.4 249.1 7.9 48.4 208.1 264.5 8.5 51.5 219.8 279.8 9.1 54.6 231.2 294.9 9.7 57.7 242.3 309.7 10.2 60.9 253.2 324.3 Euromonitor International from trade associations, trade press, company research, trade interviews, trade sources Forecast Sales of Pet Products by Category: % Value Growth 2020-2025 % constant value growth © Euromonitor International PET PRODUCTS IN VIETNAM Cat Litter Pet Healthcare Pet Dietary Supplements Other Pet Products Pet Products Source: Passport 2020/2021 2020-25 CAGR 2020/25 Total 8.0 6.5 6.0 6.1 7.0 6.0 5.2 5.4 40.2 33.8 29.0 30.2 Euromonitor International from trade associations, trade press, company research, trade interviews, trade sources © Euromonitor International