Passion for Pets: Exclusive Interview with the Publishers of Vietnam’s First Pet Magazine

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Invest in Vietnam: Your 2016 Outlook Part 3

March 16, 2016


VietnamAdvisors talks with Wayne Capriotti & Khanh Ngoc, the publishers of the first ever pet magazine in Vietnam, Mê Thú Cưng (Passion for Pets).

What led to the development of your pet magazine, Me Thu Cung? What was your inspiration and motivation for the magazine?

The inspiration for Me Thu Cung begun when my wife and I went looking for our first dog in Vietnam. I recall visiting pet shops in late 2009 and was surprised that were very few in Ho Chi Minh City (Saigon). Unimpressed by the unsanitary conditions and haphazard way of doing business in these shops, where animals look sickly and underfed, this was my first introduction to an unregulated live pet trade in Vietnam.

Eventually we bought a small, Maltese-mix female. The owner of this shop said the dog had received vaccinations but was sold to us without a receipt and ‘healthcare passport’, which is a record of critical vaccinations and other medications. I pointed out the lack of documentation, but was told it is standard practice.

The days were numbered for our puppy, she became sick immediately showing symptoms of canine parvovirus. We looked for a Veterinarian in our neighborhood, first trying a Government Vet clinic. A very young Vet visited our home, but we found out that he had more experience with farm animals than with small companion animals (cats and dogs) and was not quite sure what to do. We also obtained our first cat at this time from a home breeder. Fortunately, he recommended a good Veterinarian. This Vet came to our house immediately and began treatment. If we did not find this Vet, our puppy would die painfully, with really nothing to do to help.

The desperate feeling of not knowing where to find pet care products and services for a dying little dog sold to us from unscrupulous pet trader left an indelible mark, and I vowed to make change.

What are the major drivers of a successful pet industry in Vietnam, or any country?

The key external drivers of a pet industry are the number of pets per household, per capita disposable income and competition (abundance of companies providing products and services). The pet industry is generally recession proof and an industry involved with the care of ‘live animals’ that have long life spans, and where the purchase of pet products and services is required to take care of their daily needs. The average medium sized dog lives 10 years, which is the same of the average indoor cat.

In the last five years, the quantity and quality of pet ownership in Vietnam has increased dramatically, driven by a pet industry social phenomenon first observed in developed countries called ‘pet humanization.’ To create mature pet culture and markets in a country, greater amounts of disposable income from an emerging middle class is spent on pets, therefore raising the status of a pet from a pragmatic position within the household into becoming a family member.

Little by little in Vietnam, pet’s status is reaching the privilege of being a family member. The marketing ramifications of this is that the more the pet is considered family, the more disposable money is spent on the pet, creating premium pet product and service markets, thereby creating a thriving pet industry.

What progress to date have you witnessed in the past five years in the development of pet ownership and the pet industry of Vietnam? Are there milestones?

One must put things into prospective in regards to progress of the pet industry in Vietnam. The very first commercial small companion animal Vet clinic was only opened in Hanoi in 2003 and the first pet shop in 2006 in Saigon. Even in 2009 there were few good retail pet care services where most of theses shops sold the same limited range of products. In the last five years the growth of pet retail openings has risen exponentially, although the choice of new pet products offerings has not grown at the same pace. Therein lies opportunity.

The breakout year in regard to milestones in the pet industry was 2014. In this year the first annual Vietnam Animal Welfare Conference was held at the historic Continental Hotel in downtown Saigon. The International Dog Show endorsed by Fédération Cynologique Internationale (FCI) and produced by the Vietnam Kennel Association (VKA) had the largest attendance and number of corporate sponsors. And this year also produced the first pet magazine for Vietnam, Me Thu Cung.

Is it only about dog and cat ownership in Vietnam or are there other categories of pets popular in Vietnam?

Ownership of fish and birds as pets have a longer, popular history in Vietnam, more than dogs and cats. In Vietnam there are dedicated retails shops for both fish and pets. The ornamental fish industry is growing in Vietnam where public and private displays of custom made aquariums in one’s office or home has become a social status symbol. In regards to birds there are many ‘hobby groups’ and ‘bird shows’ drawing many people. There is a Zen-like experience of sitting in a ‘bird café’ and drinking tea. Further, there is a thriving handicraft service sector designing and building (hand-made) bird cages and other accessories in types of design and size in bamboo and rattan. The handicraft sector in Vietnam also produces products for dogs and cats.

What kind of career opportunities or new business development can a vibrant Pet Industry in Vietnam create for young Vietnamese?

Demand is high for dog groomers, trainers and sitters (pet accommodations). Currently there are no career training schools in Vietnam able to develop these pet care vocations. Most young Vietnamese that have the fortitude and resources find training outside the country in Thailand or Singapore at great expense. There are opportunities for franchise investment in pet care services centers that are found in Singapore and Thailand. Globally, the demand for pet care services is rising, demonstrated by the largest pet retail company in the world, PetSmart USA, generating more revenue from pet care services than pet product sales in the past few years.

What kind of investment opportunities in the Pet Industry of Vietnam are available for international investors?

International Investors looking to enter the pet industry of Vietnam should take advantage of this country’s decided advantage in low cost manufacturing and consider the production of their pet products in Vietnam. One sector that should be considered is the apparel, garment and textile industry and in particular the ‘Cut and Sew’ manufacturing service industry. This service sector can cater to a small pet boutique requiring 500 pieces to large multinational manufacturing companies requiring 5,000 pieces or more in one order. A long list of pet apparel and accessories can be cheaply manufactured, exported and considerations should be taken in the selling of the pet products in Vietnam. Since Vietnam is a member of the Trans Pacific Partnership Agreement (TPP) this investment would be an attractive option to companies that are part of the member countries of the TPP, including USA, Canada, Australia and Japan that have large, mature pet markets.

It is a fact that the pet industry in Vietnam is small and behind Thailand, Indonesia, Malaysia and the Philippines, respectively, in the ASEAN 5 grouping. What are the major challenges the pet industry in Vietnam faces? How do you see the pet industry in Vietnam in the next five years?

In most of these countries of ASEAN 5, led by Thailand, their pet industries have developmental support from their respective Ministries of Agriculture, Manufacturing and Tourism. For example, Pet Trade Exhibitions and Dog Shows in Thailand are prompted as international business travel attractions and also as popular local ‘pet events’ appealing to pet owners and businesses. Agricultural ministries also support these events by showcasing pet food producers and their country’s agricultural goods, overall, encouraging investment in their pet food industry. There is no such involvement and development in Vietnam.

Also, barriers of high tariffs, complex customs procedures creating a high cost of entry for new pet product introductions in Vietnam does not encourage investment. Most pet retailers buy at wholesale outside the country and bring the goods across the border increasing their price points and lowering margins. Very few companies in Vietnam produce pet products, whether it be food, non-food or health care pet products. Currently there are no premium pet product markets in any product category, for any breed, that can produce high margins encouraging rapid growth of this industry.

In summary, the pet care service industry is underdeveloped, fragmented and unregulated, but has great potential. Vietnam’s economy is still emerging with a growing middle-class with rising disposable income that see pets for the first time for more than practical purposes, and most importantly, Vietnam has a large, youthful population finding the pleasures of pet companionship. Overall, I have a positive outlook on the pet care industry in Vietnam for the next five years. The real key to development of this industry is marketing and education; creating consumer awareness in pet owners by learning about the benefits and advantages of higher priced premium products for the betterment and long life of their newly discovered ‘four-legged’ family members.

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