If online sales were already a trend on the rise in the last decade, 2020 saw a boost in the popularity of e-commerce. The pet food market was not left behind. According to Packaged Facts, online pet product sales make up 30% of the market, a considerable growth compared to the 8% it held in 2015.
Only-one retailers already had a strong presence, but ever since the COVID-19 pandemic started traditional stores found the need to build reliable e-commerce platforms. Retailers such as Amazon, Walmart and Chewy are big in the US market, but the Latin American market has another strong contender: Mercado Libre.
Preferences of Latinamerican consumers
Mercado Libre is an Argentinian e-commerce company with presence in Argentina, Brazil, Chile, Colombia, Mexico, Panama, Peru, Uruguay and more. With 378 million registered users in 2020Mercado Libre is the most popular e-commerce website in the region. The platform supports both C2C (customer to customer) and B2C (business to customer) interactions, allowing users to list new and second-hand products, as well as small and medium-sized businesses to open a shop on the website. Brands such as Australian Moss, Hills, Instinct, Mutt and Pedigree have official shops in Mercado Libre, making it easy and convenient for their consumers to access their products.
Back in 2019, Mercado Libre conducted an analysis of user behaviour in Argentina, Brazil, Chile, Colombia, Mexico and Uruguay. They found that 45% of the demand for pet food came from millennials, especially in Mexico and Colombia, with 52% and 58%, respectively. They reported that during the first six months of that year they noticed an increase in the consumption of pet food on the website. They also noted that there are differences among the countries on the prefered grammage. For example, on average, Uruguay users usually purchase pet food bags of over 8 kilograms, while Chilean consumers tend to buy 1 or 2 kg bags.
An improvement on the fulfilment system implemented by the platform, users feel safe and comfortable making purchases on the website or the app. This shows that the Latin America is a profitable market to invest in.
The Campi case
Campi is a company that decided to incorporate the feed division as an alternative to optimize its production costs and improve its market share. The company is currently present in 17 Mexican states and has plans to expand into the Caribbean and Central America.
What makes Campi special?
Campi, which is dedicated to the production of pet food and has developed its own line of food for dogs and cats. However, they do not have a physical store like other brands, which have developed their products and opened stores to sell them. They have relied on e-commerce and their main point of sale is Amazon and, in some cities there are certain stores that sell their products, such as supermarkets and self-service stores.
Just like Campi, many other companies in the petfood sector are beginning to enter the world’s markets through e-commerce, it is a way to make themselves known, especially making use of platforms already recognized and trusted by thousands of users such as Amazon and Mercado Libre.
What can we expect from the near future?
The Latin American pet food market has amazing potential. Global trends, like products with natural or holistic ingredients, or premium alternatives, are permeating the market. Another trend is a growing awareness of pet adoption, an important factor considering the region has a high number of street dogs and cats. In terms of volume, the Latin American market is currently nearly the size of the US market, with more than 7 million tons in 2021.
Its growth is expected to be steady. Not only are the consumers open to investing more in the wellbeing of their pets, the region is self-sufficient in the production of raw materials -like corn- commonly used in the production of pet food.
In Mexico, according to Triplethree estimates, premium pet food e-commerce experienced a growth of over 100% during 2020, compared to 2019. The pandemic restrictions definitely played a role in this, but the shift had already started before COVID-19. Even though consumers are no longer under lockdown and have the opportunity to purchase at traditional shops, a lot of them are now used to online shopping, which is fast and convenient. A tactic that can be seen is that some online retailers, such as Amazon and Petco, offer a special discount price for online purchases, a very appealing strategy.
Undoubtedly a good step for any new product in the petfood industry is through e-commerce, and a good marketing strategy. It is no longer necessary to have physical stores, with e-commerce you can reach any part of the world.
It has already been proven that Latin America offers a great opportunity for growth and investments. Consumers and brands of this region are adapting to global trends and online sales are one of the clearest examples.
The Latin American market is waiting for the arrival of new products through the online market, don’t be left out. E-commerce is not going anywhere, just getting stronger.