Shanxi Securities recently released a pet special report (1): How do you view the current new channels and price warfare in the pet food industry?
The following is a research report Abstract:
New channels and new formats bring new opportunities for domestic pet food brands and new challenges for low -cost competition.Compared with the developed markets such as Europe, the United States and Japan, my country’s pet food online sales accounted for much higher than offline.In terms of subdivision, the growth rate of traditional e -commerce has slowed down, and new formats such as live broadcast and cargo and new channels such as Douyin have maintained high growth, especially the growth rate of pet categories is particularly bright.New channels and new formats bring new sales growth curves to the brand. The process of brand promotion/live sales of brand experts is mainly to brand spontaneous sales. It is actually the process of brand culture and values output and its own brand effects.Domestic brands are dazzling on the Douyin platform, and the new channels and new formats bring the brand building and the new growth curve of domestic pet grain brands.At the same time, it should be noted that the low -cost strategy brought by the live broadcast format and the competition between e -commerce platforms also laid a foreshadowing for the price war in the pet food industry.
The price war in the domestic pet food industry is the inevitable result of production-brand-channel-channel-consumer industry chain.The price war of pet food in 2024 continued, mainly to increase brand sales by discount promotion and other methods.The core issues of each part of the pet food industry chain are: the low -end production capacity of the production end is overcapacity, the brand -side products and marketing homogeneity is serious, the platform side is committed to the lowest price on the entire network, and the consumer side pursues cost -effectiveness.The platform needs to be traffic, and the brand must be sold. When the brand, channels and other participants are committed to improving their own market share, the industry price war is inevitable.We believe that the domestic price war is a phased competition method for pet food brands to seize market share in certain periods. The price war disrupted the past pet food price system, but it will also be the process of the new price belt of the industry.
The price war brought by the competition of the entire industry chain requires the comprehensive development of brand players in the full cycle of the product.We believe that in the long run, its own factories can firmly grasp the product end and supply chain, which is the core element of creating brand differentiation competitiveness.In addition, it is necessary to pay attention to brand operation capabilities such as the brand’s channel laying, price disk management, and the product competitiveness brought about by the brand’s own research and development capabilities.Only in order to go further in the current market.Therefore, we are optimistic about the scarcity of domestic brand players who can fully develop in the current pet food market.
Investment recommendations: We believe that the operation of excellent industry chain is one of the core competitiveness of pet grain brands. With the gradual increase in domestic brand effects, high growth in domestic brands is expected to continue.Recommend omni -channel sales performance to maintain a leading domestic pet food leading brand good treasure pets. It is recommended to pay attention to the establishment of the brand matrix, the product strategy streamlined China Pet shares, and the gradual rise of their own brands and the Los shares.
Risk reminder: risk of fluctuations in raw materials; risks of food safety due to improper management; risk of brand and product public opinion; exchange rate fluctuation risks; long -term price wars that continue to cause the risk of worsening in the industry’s competition;The risk of friction exacerbation; intensification of overseas competition has led to the risk of hindering the global strategy of some companies.(Chen Zhenzhi, Shanxi Securities, Zhang Yanbo)