Pet care retail services in Vietnam are maturing and beginning to bloom
One must put things in prospective in regards to the evolution of pet ownership and a supporting pet retail service industry in Vietnam. The first documented, commercial ‘small companion animal’ Veterinarian clinic opened in Hanoi in 2003, and the first licensed commercial pet retail shop opened in 2006 in Ho Chi Minh City.
Even five years later in 2011, there were a limited selection of quality pet retail shops in the major urban centers of Saigon and Hanoi, selling a limited range of products, mostly from international companies, priced in the economy to mid-price range. The exteriors and interiors of all these pet shops were basic and utilitarian, offering the most basic of pet care services. But times are changing.
There are still barriers and constraints to investing and operating pet retail in Vietnam. From very high leasing rates in urban centers, to a limited range of inexpensive, local products relying on expensive imports, supply chain and warehousing issues, a restrictive legal and business environment, to difficulties in obtaining investment and operating capital from financial institutions – most shops are ‘family financed’.
A retail sector so brand new, largely unheard of a couple of years ago and not taken seriously by many pragmatic business-minded Vietnamese. Although wages for personnel are low, many shops have 3 to 5 people employed. The real problem lies in a lack of proper sales training in the awareness and usage of pet products. Profit margins are slim as Vietnamese pet owners buy on price, as they prefer economy to mid-priced products, usually lacking a deeper understanding of the pet food product they are buying. However, recently there is a growing trend for the demand of premium products and services allowing pet retailers to increase their margins.
The average pet shop is usually a rectangular, multi-level building, 3 to 5 meters wide by 20 to 25 meters in length (from 100 to 125 sq. m per level to 250 to 400 sq. m overall) packed on a busy street with similar types of buildings. Rare is a pet shop in a stand-alone building or in space leased in a mall – price prohibited. Rents are higher in the city central of Saigon and Hanoi than outside – typical rents can start at $1800 USD (40.000.000 VND) per month. All new pet retailers do not have buildings newly constructed, as they renovate and refurbish existing buildings at a considerable savings of cost and time. Shelving space is limited, therefore inventories are kept low. Parking is also limited except for a small space for motorcycles in front of the building. Although limited by physical space restraints, many shop owners are overcoming these barriers by becoming creative in their usage of space (maximizing the multiple levels of their building) adding colourful, lively interiors and product presentation, even allowing their own dogs and cats to wander around and make themselves ‘at home’ adding to a better pet retail shopping experience.
A Snapshot of Pet Retailers in Major Urban Centers in Vietnam
It is difficult in providing an overall Pet Retail Market Value in Vietnam in terms of $US or VND, as many pet retailers are privately owned and there is no pet retailer association in Vietnam that may be able to gather such data. There is quite a turnover of shops quietly closing and even changing names, where many shops are a ‘labour of love’ for owners and probably just surviving to pay rent, wages, however they are all cash-based businesses. A few business cases of pet retailers in Vietnam are required to be written to be able to portray a financial snapshot of this segment of the pet industry in Vietnam.
We can provide a quantitative survey of Pet Retailers in the major urban centers in Vietnam that offer these services: Veterinary Pet Care, Pet Retail Stores, Grooming Salons / Spas, Pet Accommodations, Live Animal Sales, Training (dog), Pet Relocation Services and Pet Cafes (dog and cat).
It is estimated that there are 49 Veterinary Clinics, 61 Pet Retail Stores, 5 Grooming Salons, 4 Pet Accommodation, 5 Dog Trainers and 6 Pet Cafes in Saigon (Metropolitan Population including Urban & Rural Districts: 8.76 Million. Est. 2017). In Hanoi (Metropolitan Population 7.58 Million. Est. 2017) there are 15 Veterinary Clinics, 36 Pet Retail Stores, 5 Grooming Salons, 5 Pet Accommodations and 4 Pet Cafes.
These figures represent businesses where the major source of revenue comes from a single service segment. They also represent the most popular and largest businesses in a particular segment. However, a new trend emerged about 3 to 5 years ago where many pet retail services began offering a wider range of pet products, grooming services, relocation services, accommodations and live animal sales, hence the development of the full service pet care retail shop in Vietnam.
In secondary urban, and rural, centers like Hai Phong (Population 1.9 Million. Est. 2017), Can Tho (Population 1.24 Million. Est. 2017 – largest city in the Mekong Delta in Southern Vietnam) and Da Nang (Metropolitan Population 1.07 Million. Est. 2017) there is a dramatic increase in the amount of Vet Clinics and Pet Retail Stores. Originating from the concept of a Veterinary center providing medical care to farm animals and livestock, as most Veterinary universities in Vietnam still cater their curriculum to livestock.
The emergence of these modern pet retail shops are being developed by young, pet loving entrepreneurs seeing the need to offer pet care products and services for small companion animals; dogs, cats, birds, fish, reptiles and small furry pets.
First Pet Retail Chain in Vietnam
The very first chain Pet Retail in Vietnam, by definition owning and operating pet retail stores under one brand with central management and having locations in various urban centers across the country, was developed by The Spring Group, formerly known as the VeeGroup. The Spring Group was officially established in 2006 by the name of Veesano Joint Stock Company (VeeGroup). In the beginning of 2018, the company changed their name to Spring Group. Spring Group owns a number of Vietnamese consumer retail brands in various business sectors including childcare, homes / interiors and specialty food markets. They are also a major distributor of consumer retail products in Vietnam.
In 2013, Spring Group launched the pet retail brand of PetCity. PetCity has pet retail shops in Hanoi (5), Hai Phong (1), Ho Chi Minh City (3) and Da Nang (1). Number of shops are in brackets. The PetCity pet retail ‘supermarket’ provides a wide range of pet products, accessories and services including grooming and accommodations for pet owners. Pet City is also very active in the community of pet owners providing education and awareness in becoming a socially responsible pet owner. They also support local animal rescues in fundraising and raising awareness of the plight of forgotten and abandoned dogs and cats in Vietnam.
Although not considered pet retail chains, there are a number retail pet shops in Hanoi and Saigon that own and operate more than one retail shop in one particular city. Most notable and probably the first modern pet retail store, opening in 1999 in Vietnam, is the CityZoo with a store in Ho Chi Minh City (Saigon) and Hanoi.
Hanoi
Kún Miu Pet Shop & Grooming has 5 locations:
J & PetShop & Spa has 4 locations in Hanoi with a new shop opening in Saigon
Do Do Pet Shop has 3 locations
Saigon
PET House (Nhà Vật Yêu) has 4 locations
Dog Paradise has 3 locations
Hachiko Pet Shop and Spa has 2 locations.
Little Dog has 3 locations (new shop opening soon)
Other notable and popular stand-alone pet retailers in Hanoi are:
Kho Pet Shop (Pet Shop)
Lan Lan Pets (Grooming Pet Shop)
Luffy Dog Cafe (Dog Cafe)
In Saigon the most notable and popular stand-alone) pet retailers are:
Pet Center (Pet Shop)
Pet Prince Pet Shop (Pet Shop)
Saiga’s House (Pet Accommodations & Pet Shop)
Dog Room Saigon (Grooming and Pet Shop)
Cosa Grooming (Grooming and Pet Shop)
First International Pet Retail Chain in Vietnam
In 2017 the very first international pet retail chain entered the pet markets of Vietnam. Pet Lovers Centre, based in Singapore, have opened two pet retail shops in Ho Chi Minh City with plans of expanding into the other urban areas of Vietnam. Pet Lovers Centre has over 90 shops in the countries of Singapore, Malaysia, Thailand, Brunei and now Vietnam. According to a spokesman from Pet Lovers Centre, they see the development of pet markets in Vietnam at a pivotal point for investment backed by a youthful population with growing fondness of pet ownership and ready to buy the best of the best for their newly arrived ‘four-legged family members’.
Emerging Popularity of Ecommerce in Pet Retail in Vietnam
According to EuroMoniter International, ecommerce pet retail in Vietnam is increasing in popularity, although producing very low sales, overall. However, an emerging class of tech-savvy, wired young pet owners, with increasing disposable incomes that prefer shopping online for apparel, consumer electronics, household appliances, food and music are now considering pet care products.
A major factor slowing a robust growth and popularity of e-commerce in Vietnam, in general, is buyers overall lack of trust in this retail channel and in the reputation of some sellers that have been found untrustworthy. Other critical issues include unclear seller’s policies on buyer-seller contracts, resolving customer complaints, protection of personal data and a lack of clarity in product description. A few other concerns regarding their purchases never showing up or taking weeks to arrive.
A word of caution to many pet retailers in Vietnam, you should tread carefully in online pet retail ecommerce. Your reputations are on the ‘online’ and any bad ecommerce shopping experience will be reviewed under intense scrutiny in Social Media. So, pet retailers, try to advance the cause of ecommerce and accommodate the buyer in the ecommerce process, hence more earned trust in the retailer. Since most pet owners believe their pets are family, a retailer must realize they could be insulting their ‘family’ if they do not provide a positive online shopping experience. Family is everything in Vietnam.
Finally, Facebook, a very popular social media network in Vietnam, is becoming a key player in e-commerce in the gray area of an ‘unofficial e-commerce channel’. A few caveats of this online sales channel for buyers, most sellers are not registered, by law, with the Vietnam E-commerce and Digital Economy Agency (VECITA) and most do not pay taxes. Caveat emptor (buyer beware).
Sources:
EuroMonitor International – Pet Care Reports for Vietnam
The Low Down – Momentum Works, articles on Ecommerce in Vietnam
Me Thu Cung – Vietnam’s Only Pet Magazine
View a copy of Pet Yellow Pages Vietnam
