Vietnam Pet Market Insights

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The Vietnam pet food market is projected to grow at a CAGR of 5.7% during the forecast period (2021-2026). 

Vietnam is a very nascent market and recently opened up the consumer space. The very low consumer awareness levels not just regarding the different products but also about the basics of pet healthcare, ownership is a challenge to the pet market. Despite these factors, Vietnam is a newly induced market space with lax regulatory structures giving significant leverage to big players. International brands, especially mid-priced brands, are expected to maintain their leading positions in the category, as the presence of local brands remains negligible. The success of the pet foods here is largely dependent on the interaction capabilities of the manufacturers with the customers and promotional strength of the companies. Higher disposable incomes, rising demand for other pet food as well as busy consumer lifestyles are the key factors supporting this growth. (Morder Intelligence, 2020)

Source: Pet Care in Vietnam by INTAGE VIETNAM LLC.

Vietnam experienced cat ownership growth bigger than that of dog ownership in 2020, at a CAGR of 3.7% (2.8% for dogs) from 2016 to 2020, with 2.9 million owning cats in 2016 in comparison with 3.4 million in 2020. The percentage of households owning dogs increased to 17.2% in 2020 from 16.2% in 2016, while the percentage of households owning cats increased to 12.4% in 2020 from 11.3% in 2016 (Euromonitor, 2021).

Key Market Trends

Specialized Pet Shop in Vietnam Driving Sales

Pet humanization is a trend highly seen in major urban cities like Ho Chi Minh City (Saigon) and Hanoi, and in secondary urban centers of Hai Phong, Can Tho and Da Nang of Vietnam. Most of the specialized pet shops in Vietnamese are family financed due to very high leasing rates in urban centers, local products relying on expensive imports, supply chain and warehousing issues, a restrictive legal and business environment, difficulties in obtaining investment and operating capital from financial institutions. Profit margins are slim as Vietnamese pet owners buy on price, as they prefer the economy to mid-priced products. The emergence of these modern pet retail shops is being developed by young, pet-loving entrepreneurs seeing the need to offer pet care products and services for small companion animals. 

Export of Pet Food Dominated Vietnam Pet Food Market

Vietnam’s pet product manufacturing sectors of pet food, for both export and local markets, are in a state of developing. According to the International Trade Centre, The United States, China, Cambodia are the major importer of pet food from Vietnam with the United States holding a major share. Competition is fierce from an abundance of inexpensive pet products of low to economic price range in the region. International manufacturers from Japan (Hotta) and USA (RefinedKind Pet Products) have their pet products manufactured in Vietnam through private manufacturing agreements with local Vietnamese OEM companies, where all products are shipped and sold outside Vietnam. Kim Binh Minh Co., Tran Danh Co., Ltd. Lien Thang Manufacturer, Investment & Trading Co., are the leading top three manufacturers of pet products in Vietnam not only for the local market but also for the international market.

Vietnam Retail Pet Food Market Insights

In 2016, market size of Vietnam pet food sector was at US$29.6 million, then grew to US$54.5 million in 2020. The projected market size for 2025 is US$94.2 million. Every category has contributed to the growth of pet foods in Vietnam and will continue to do so. In 2020, over the half of the pet food market was made up of dog food, at 57.6%, followed by cat food at 35.6%.

79.1% of pet food purchases were made from the top five companies in 2019: Charoen Pokphand Group, Mars Inc, Archer Daniels Midland Co, See-All Aquariums Co Ltd and Daejoo Co Ltd.

The top brand in Vietnam, SmartHeart, dominated the pet food market in 2019, with a retail sales value of US$7.4 million, followed by CP at US$7.0 million and Me-O at US$4.9 million. Charoen Pokphan Group or PCG, their pet division, is a Thailand-based company, dominates the market rather than international brands. This may be due to the price range which Vietnamese pet owners are more sensitive to. 

Dog Food in Vietnam

From 2016 to 2020, dog food sales experienced a significant increase, from US$17.5 million to US$31.4 million, with a CAGR of 15.7%. Dry dog food accounted for 93.9% of total dog food sales in 2020.

Mid-priced dry dog food was the strongest driver of overall dog food value sales. Mid-priced dry dog food and wet dog food recorded CAGRs of 16.7% and 13.1% respectively from 2016 to 2020. Once they enter the job market with decent professional salaries, the current main dog owners consisting of teenagers and young adults will spend more time and money on branded dog food, which expands further category development (Euromonitor, 2020).

Dog treats is expected to be the most vigorous dog food category in the next five years. The value sales of dog treats is forecasted to reach a CAGR of 18.9% from 2021 to 2025.

Cat Food in Vietnam

Cat food grew significantly from 2016 to 2020, at a CAGR of 19.2%, and is forecast to grow at a CAGR of 18.9% between 2021 and 2025.

Dry cat food accounted for 93.7% of the cat food sales in 2020. Mid-priced dry cat food had the highest growth in the dry food category, with a CAGR of 20.5%, from 2016 to 2020 and is forecast to take the lead (CAGR of 19.8%) from 2021 to 2025.

Premium dry cat food recorded a CAGR of 16.4% from 2016 to 2020 and is expected to grow at a CAGR of 14.5% from 2021 to 2025. According to Euromonitor, “rising disposable incomes and the pet humanization trend are likely to support further expansion in the range of premium cat food available” (Euromonitor, 2020).

Distribution Channels

In 2020, grocery retailers (16.3%) and non-grocery specialists such as pet shops (72.8%) sold most of the pet products (89.1%) in Vietnam. Pet shops remained the dominant sale distribution channel for dog and cat food, with supermarkets and veterinary clinics also being reasonably important distribution channels, while traditional grocery retailers continued to struggle. E-commerce continued to gain share with a CAGR of 7.7% from 2016 to 2020.

Survey conducted by INTAGE VIETNAM shows that 54% of pet owners buy from small pet shops/street vendors, followed by 47% from big pet shops, pet marts, branded chains, and 38% from e-Commerce sites (Shopee, Lazada, Tiki).