The growing popularity of pets in Korea will lead to increased opportunity for premium pet care products from the United States and other foreign countries. The Korea’s demand for * pet care products was estimated to reach approximately US$ 454.5 million (US$1 = Won 1,100) based on market price. The market is projected to grow by 8-10% annually over the next three years. Among the pet care products, pet foods, and sanitary & grooming products including shampoo and hair treatment products are the largest segments being imported. Imported pet care products were estimated at approximately US$ 295.4 million in 2008. The U.S., China, and Australia, are the leading sources of imports currently. (* Note: This report focuses on pet care products including quasi-drug products. Information on pet food is also included since pet food trend is related with pet care industry. Medical devices, drugs, and services for pets are not included in this report. )
Korea’s pet care market has been growing rapidly since 2003. According to the report of the Bank of Korea, Korea’s per capita income is relatively high reaching to almost US$ 20,000 in 2008. Also, due to the Korea’s cultural change on family structure (e.g., from large family to nuclear family, increasing number of single person home, etc) for the past 10 years, pet owners think of their pets, particularly dogs and cats in Korea, as family members, rather than just animals which were kept outside and fed leftovers.
Recently, buying expensive pet food and premium pet care products are also a sign of social status especially among younger Koreans. The Korean consumer is concerned about his/her families (pet) health and is willing to spend more for the better care of the family treasure. CS Korea included analysis with pet food trends, as we believe, that this sub-sector of the market could be used as an analytical tool related to consumer sentiment relating to interests by pet owners to expand purchases of a full range of pet care products including toys, grooming and other aides.
According to industry sources (there is no official statistics about the pet care product market, except pet food, in Korea), approximately 2.8 million households, which are about 17% of the total Korean 16.5 million households, have pets. Currently, dogs and cats account for the largest portion of pets owned by Korean households. Among the households with pets, approximately 2.5 million dogs and 0.3 million own cats as Koreans still prefer dogs to cats - this is a cultural situation. Cat ownership has been growing though at a rate of 30 to 40% on a yearly basis for the last several years and is especially popular with the younger generation, while some Koreans, particularly those of a certain age, do not consider cats to be favorable pets. Other pets in Korea include fish, birds, gerbils, and small reptiles.
Currently, more than 3,000 kinds of pet care product items (under about 100 product groups) are being sold in the Korean market. About 90% of the products are for dogs and the remaining 10% of products are for cats. Pet foods share the largest portion of the pet product market followed by snacks, sanitary and grooming products, including cat litter, shampoo, clippers, hair treatment products, and perfume.
The recent trend for pet products is to pursue wellness like that for humans. Accordingly, the discerning pet pampering consumer is now opting for organic pet foods, which offer more variety to attract the pet owner. Likewise premium pet care products that have unique function and natural type of grooming products (e.g. natural flavor shampoo) are also being sought. Other recent trends include that asyounger consumers in their 20s and 30s tend to buy pet products from Internet retailers, prices of the pet products are declining as a result of increased competition from online sources. Competition among sellers is getting keen in terms of price and product items. Thus, some Internet retailers would like to deal with foreign suppliers directly to be competitive in prices and product lines. So far they are purchasing foreign products through their importers/distributors. Also, some large importers consider opening a large or specialty mart for pet products to be competitive as well under the situation by offering a broad range of products and enjoying economies of scale.
By Yoonshil Chay