Relevant data shows that in 2020, the number of pet cats and dogs in cities and towns across the country reached 100.84 million. Among them, the number of dogs was 52.22 million, a decrease of 5.1% over last year; the number of cats was 48.62 million, an increase of 10.2% over last year, a relatively large increase. In 2020, dogs accounted for 51% of all pet types, and cats accounted for 46%. The gap in the proportion of dogs and cats continues to narrow. There are 62.94 million people raising cats and dogs in cities and towns in China, of which 27.01 million are cat owners. Among the pet-raising brigade, pet owners aged 25 to 30 account for more than 60%.

Growing together with the number of pets is the consumption of related pet industries. Data from the "2021 China Pet Consumption Trends White Paper" show that the market size of my country's pet industry (cats and dogs) last year was nearly 300 billion yuan. In the next 3 years The industry will continue to maintain steady growth in 2018, with a compound growth rate expected to reach 14.2%. Today's pet consumer market can be roughly divided into five major categories: live pets, pet food, pet supplies, pet medical care and pet services. However, in terms of living pets, the entire industry is still relatively traditional, and there are no large chain companies, so there is considerable room for development.

“Among the current 100 billion pet cat market, the live cat market only accounts for 12.7 billion yuan, which is a relatively obvious incremental market. There are no brands or manufacturers for live cats, and kittens purchased in pet stores , It’s too difficult for people to know the source of goods. We want to help pet owners solve the problem of cat transparency from the source,” Zeng Liwei, founder of Kitty Ladies, told Red Bowl.

“In the multi-million angel round of financing completed in March, in addition to nearly doubling the offline store expansion, the store standardization system was completed, and 6 self-operated stores verified the mini program + ERP system and overall operations feasibility, the overall turnover increased by 70%, the most important point is that we have launched the first breeding supply chain in South China, and it is expected to build another live breeding base in East China in the first half of next year. This is an important step for us to build industry barriers. "The most important thing."

Zeng Liwei introduced the situation of large-scale breeding bases from three aspects: standardization, automation and digitization. Standardization is reflected in scientific gene selection, disease prevention and control, etc., to improve the quality of kittens and reduce the risk of genetic diseases and infectious diseases; through automated feeding, cleaning, monitoring of kittens' body temperature, weight, heart rate and other physiological indicators as well as feed intake and excretion, Automation can reduce marginal costs and improve feeding efficiency; a refined feeding model is built for kittens from birth, such as precision feeding, estrus and pregnancy monitoring, disease early warning, environmental control, etc. "This data system will run through the life of each cat, reducing the risks of pet ownership for cat owners."

Zeng Liwei said that the current pet industry is a traditional industry that is in urgent need of being subverted by digitalization, and living animals are just Starting from the beginning, Kitten is here to informatize the entire process, open up the entire data flow from breeding to users, and build an ecological closed loop: online mall + ERP - technology empowers digitalization - covering the mid- and downstream markets.

“The key to achieving profitability is to optimize the cost structure.”

Zeng Liweling revealed to Red Bowl Society that Kitten Is Abandoned extremely low-efficiency services such as care and foster care, thus Optimize site area and site selection, reduce cleaning and reception staff, reduce costs, and improve square footage efficiency. Currently, the rent, water and electricity costs of the six self-operated stores account for less than 20%, and labor costs are also controlled at around 15%, which are reduced through standardized processes. Risk cost, the current discount rate is 3%, which is far lower than the industry average.

In terms of store location, Mao Mao Lai will not choose areas with high traffic. The logic behind it is that if you open a store in the core area of ​​a shopping mall, the price/performance ratio will be lower. "First of all, it is not cost-effective, as rent and labor costs need to increase significantly; secondly, the conversion rate of customers is low, and most of the people in the mall are not potential target users; and finally, there is risk. The greater the traffic, the greater the risk of disease to the kittens. The higher it is.”

Shanghai Cattery

"On the premise of reducing costs and ensuring profit margins, we provide customers with more additional services (CFA pedigree, genetic testing, lifelong vaccine after-sales , the first to provide up to 180 days of critical illness protection) to improve brand value and competitiveness. It is precisely because we have effectively controlled costs in terms of manpower and store rent that we can benefit from after-sales service to consumers, although service is not an industry barrier. , are easily copied, but they cannot provide a full set of services such as 180-day critical illness and lifelong vaccines while ensuring profitability. After optimizing the cost structure, we have huge room for operation in providing services. At the same time, it can still occupy the market with its price advantage."

As for how to achieve profitability, Zeng Liwei said that there is no need to worry. Currently, all six catteries are profitable, and the catteries are located in Shenzhen, Guangzhou, Shanghai, First-tier and new first-tier cities such as Hangzhou and Wuhan. Different from the low conversion rate of online live bodies in Chong Ai Tian Xia, Kitty Lai Lai has ensured quality control and management of large-scale breeding while accelerating the expansion of direct operation + joint operation and direct management. Its full chain data accumulation, digital drive, and follow-up business Expansions have higher conversion rates.

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Hangzhou Cat House

“The profits of “The Little Kittens Are Coming” are realized through refined operations. At present, each store invests half a year to repay the capital, and each store has a monthly turnover of about 300,000 yuan. The monthly net profit of a single store is about RMB 70,000. Mao Lai has independently hatched its fresh food brand, with more than 40% conversions from cat purchasers and more than 80% repurchases. ”

Zeng Liwen revealed to Red Bowl Society. , there have been more than 40 willing franchisees before, but he thinks it is not the right time yet. He said he does not want to cut leeks like his peers. In the process of building a brand, quality control and management are the core things that need to be done to the extreme before opening up the franchise. question. "You must ensure profitability and good cash flow before you can do it for others. And we do not charge any franchise fees. Through large-scale breeding bases, we can supply high-quality, healthy and lower-cost kittens to stores, which serves as a barrier to the store's live supply chain. We have reached a preliminary strategic cooperation with E-Chong (Haiji Taipin) and have the lowest purchase price and channel advantages in the industry, which can ensure that franchisees have greater profit margins. ”

Based on data. Maximizing value creation

Zeng Liwei and his founding team are all from the IT industry. “We want to use Internet thinking to transform this traditional industry.” Zeng Liwei said. Prior to this, they had created the pet service applet "Cute Pet Dad", using a data system to provide some professional guidance to pet owners. Kittens Here also uses accurate data to create digital files for each kitten, and the entire process is informatized; from breeding to user purchase, the system has all data based on the pet.

“After users purchase kittens, based on multi-dimensional data analysis such as breed, age, gender, growth data and user data, we can predict subsequent pet-raising problems and provide solutions. We are based on full user trust and accurate recommendation algorithms to provide users with the goods and services they really need, thereby building a closed loop for pet ecology. ”

Zeng Liwei said that currently the only Tmall store that sells live pets is. Although Paotianxia has the advantages of light model and easy management, the shortcomings of online living are also obviously exposed, such as insufficient customer trust and poor conversion rate. “Keeping a pet is like going on a blind date. Just chatting and looking at photos online is not enough to achieve a strong emotional connection. In many cases, it’s about eye contact, and the same is true when choosing a pet. Our mini program and data system also empower offline stores.

The current "Online Living Mini Program" and "Member Selection Mall Mini Program" have been launched in version 2.0. Users can select cats efficiently and conveniently online, and display self-operated chain stores through the mini program. Information, all cat details including birthdays, vaccines, parents, etc. can be displayed in the mini program. After the customer purchases, the cat will be bound to become a member and a pet-user database will be established so that users can choose high-quality products. "Currently pet food , supply supervision is weak, and the products on the market vary from good to bad. Our one-stop service can solve the problem of users' difficulty in selecting products. ”

Online Living Mini Program Version 2.0

When it comes to offline expansion strategy, Zeng Liwei said that when the kittens come, they will choose to cover the city first and then expand the density. At present, The offline system has a complete standardized process, and it is expected to expand to more than 20 directly operated stores this year, and quality control and management currently have relatively mature solutions, so franchising will be opened at the end of the year and will be operated and managed by the head office next year. The franchise is fully open and will cover more than 100 stores.

Zeng Liwen told Red Bowl Society that Mao Mao Lai is currently planning the next round of financing, with the amount being 10 million, and the funds will be mainly used online. The expansion of the lower store and the construction of the second breeding base are partly used for data model iteration and fresh grain brand operation. "It is expected that by the end of 2022, there will be more than 120 direct-operated + joint-venture stores, with annual revenue exceeding 170 million; the cumulative total will exceed 10. 10,000 precise user data; regarding the self-incubated fresh grain brand, it will be officially launched in the second half of the year and reach the top three domestic market share by the end of next year. ”

Red Bowl Society believes that the seemingly prosperous pet economy also hides mysteries. Many chain pet stores earn franchise fees under the banner of “full service coverage”, but actually provide franchisees and users with There is a huge gap between service and commitment. Compared with the relatively mature pet breeding and sales systems abroad, most of the domestic pet breeding market is still at an unregulated stage.

But it is foreseeable that with the rapid development of domestic pet breeding and sales systems, it is foreseeable that with the rapid development of domestic pet breeding and sales systems, it is expected that the domestic pet breeding market will not be fully standardized. The continuous emergence of live pet, pet food, pet supplies, pet medical and pet service companies, the activity of various investments and mergers and acquisitions has increased year by year, the establishment of domestic laws and regulations on the pet market, and the various segments of pet consumption, in It will remain highly active in the next ten years, creating more new opportunities for companies and investors and providing a better consumer experience for pet owners.