3 Trillion Won Pet Market... Fierce Tug-of-War Between SMEs and Large Corporations

[Asia Economy Reporter Moon Hyewon] The competition between medium-sized and small enterprises (hereinafter SMEs) and large corporations to seize control of the 3 trillion won pet industry market is expected to intensify further. As the era of 10 million pet owners arrives, large corporations are actively trying to enter the market, while SMEs plan to block large corporations' entry by being designated as a 'livelihood-type suitable industry' this year.

According to the Korea Rural Economic Institute on the 7th, the domestic pet industry market size has steadily grown from 1.9 trillion won in 2015 to 2.1455 trillion won in 2016, 2.3322 trillion won in 2017, 2.651 trillion won in 2018, and 3.002 trillion won last year. It is expected to expand to 6 trillion won by 2027, making it an industry with great growth potential.

In particular, the feed market, a representative sector of the pet industry, has more than doubled in size for pet dogs from 313 billion won in 2012 to 667 billion won in 2017 over five years. The pet cat feed market also grew rapidly, increasing more than fourfold from 50 billion won to 222.1 billion won during the same period. The pet supplies market size nearly doubled from 458 billion won in 2012 to 851.7 billion won in 2017. The number of pet supply stores increased from 3,740 in 2014 to 6,739 in 2017, indicating the expansion potential of the related market.

The pet industry, which sells pet products and provides adoption services, is currently designated as a 'market monitoring' sector. Market monitoring means that since large corporations have a negligible market share, the sector is not recommended as a 'small and medium-sized enterprise suitable industry,' but monitoring is conducted on the expansion of large corporations.

In June last year, the Korea Pet Industry Retail Association (hereinafter Pet Retail Association) requested the designation of pet-related retail sectors such as pet product sales and adoption services as suitable industries for SMEs at the Win-Win Growth Committee. At that time, E-Mart, Lotte Mart, and others insisted on a 'win-win agreement,' and the positions could not be reconciled. As a result of the vote, it was designated as a market monitoring sector, an intermediate stage between the two opinions. According to the Win-Win Growth Committee, the retail business of pets and related products refers to businesses that sell pets and display and sell pet-related feed or supplies. However, retail of livestock feed is excluded.

The Pet Retail Association plans to apply for the designation of 'livelihood-type suitable industry' to the Win-Win Growth Committee within this year. The association sees this as the minimum measure to block large corporations from entering the pet industry. Lee Ki-jae, chairman of the Pet Industry Retail Association, said, "The pet industry has been a unique SME sector cultivated by small business owners for decades, with more than 85% of small business owners engaged in it. However, since 2010, many large corporations have competitively entered the market, leaving only 30% remaining for small businesses," adding, "To prevent small merchants who have been pushed out by competition with large corporations from switching industries or closing down, which would shrink the entire industry, the pet industry must be designated as a livelihood-type suitable industry as soon as possible."

This content was produced with the assistance of AI translation services.