Entrepreneur's business is the cat's meow

When Ju Yi was in the US, establishing a lucrative real estate company, he had a pet dog and a cat. That led him to another entrepreneurial idea: seizing a piece of China’s growing pet care market.

Ju, 28, is now back in Shanghai as founder and chief executive officer of Puffgogo, a company involved in pet care. He himself now has two pet dogs.

The China Pet Products Association reported earlier this year that there are 54 million dog owners and 20 million cat owners in the country, with pet ownership growing at 15 percent a year. The Jingdong Consumer Institute, in a report released two months ago, estimated the value of the Chinese pet care market in 2017 was 170.8 billion yuan (US$24.58 billion) and growing more than 20 percent a year.

According to a report from the Polish Investment and Trade Office in Shanghai, about 24 percent of the city’s residents own dogs and 11 percent own cats. The 2018 “Chinese Pet Industry White Paper” says students and white-collar workers dominate cat ownership.

However, Ju first focused his company on dogs. He launched a WeChat account sharing information on canine pets. 

Ti Gong

“It gave us some success because no one else was doing it,” he said. “Then one year later, we reached a plateau. Pet owners aren’t generally interested in professional assistance, he said. “Many pet owners still see pets as fluffy toys come alive, not as family members. That’s one big obstacle we are facing in the industry.”

An estimated 38 percent of China’s pet food is purchased online, so Puffgogo next tried to capture a piece of that market with a dog food box delivered to homes. That, too, wasn’t a success because it was too hard to standardize the service given the large range of dog breeds and sizes.

So the company shifted its focus to cats, launching the MollyBox last August.

It delivers cat food and products to subscribers’ doorsteps. MollyBox provides different food for different cat species. Cat owners choose the brand they want and how much they want to pay.

Mollybox won a gold prize at the recent Global Entrepreneurship Week China held in Shanghai, another feather in the cap for Ju, who was listed among Forbes Magazine’s 300 top entrepreneurs under the age of 30 in 2017.

“I see an opportunity between fastgrowing e-commerce and the relatively untapped pet market,” said Ju.

The average monthly expenditure in China on pet food ranks far below Western countries, according to market research firm Mordor Intelligence. For example, Norwegians spend an average US$53.20 a month on dog food, while Chinese spend only 90 US cents. That signals an undeveloped market with big potential. With China, which enjoys the largest pet food market in Asia, multinationals like Mars, Nestle, Procter & Gamble and Colgate-Palmolive have rushed in to grab a piece of the action.

Dog food sales alone are expected to almost triple to over US$760 million by 2019, according to Bloomberg News. MollyBox appears to be a hit. 

About 70 percent of customers book repeat orders, Ju said. “The fundamental key to the high reorder rate is cheap and convenient service.” he said. The boxes arrive with different packaging each time, encouraging customers to take photos and post them on social media accounts.

“About 44 percent of cat owners are beginners,” Ju said. “And since cats don’t interact with human as much as dogs do, many beginners are searching for products to help them get on the right road with their pets.”

Ju said he believes that many people take on pets to cope with loneliness.

Pets can be warm companions for the elderly and a welcome sight for young office workers who arrive home after a tiring day at a desk and have little time for socializing.

 “If you’ve ever had the experience of seeing your pet happy to see you when you open the door, you’d know how sweet it is.”

While Western countries are starting to focus on premium services like hospice care for sick pets, the Chinese market in

pet care is still in its formative stages.

There are hundreds of brands selling pet products online, but none has a history of more than 15 years. 

“Every company is now trying to be the first giant in the industry,” said Ju. “Of course, we want to be the winner in this competition. We display certification from pet food suppliers to show that we don’t sell fake products and we are trustworthy.”