After buying and selling, Youyu chose to merge into the Yuyuan pet sector at the right time. It was an acquisition. This was an industry integration promoted by industry leaders and capital shareholders.

The pet economy has been at its peak in recent years, and many new generations of entrepreneurs have continued to enter the industry, especially in the field of pet food.

Different from traditional pet food companies, these new brands often have stronger Internet genes, more distinctive product features, more mature marketing strategies, and close cooperation with capital, and their development Choice can also provide us with some inspiration for thinking.

01

Acquisitions are on the rise, and industry mergers and acquisitions are expected to continue in the future

M&A in the pet field has mature models and paths to follow in the foreign pet market.

In industry research, Mars and Nestlé, the two major pet food groups, are often used as learning objects. The most distinctive feature of its development path is mergers and acquisitions. Through the acquisition of a large number of high-quality brands, it has built a complete pet food product matrix and further consolidated the company's competitive moat.

The main direction of acquisitions by domestic companies in recent years has been overseas pet food companies. Companies such as China Pet, Guobao, and New Hope have all made gains in foreign markets. After years of development, China's pet food industry has accumulated a considerable number of industry companies, especially the entrepreneurial companies that have emerged in recent years, providing the market with a certain number of M&A targets.

Pet food consumer groups and product demands are diverse, which makes multi-brand operation necessary. In addition, for cross-industry players represented by private equity and industrial capital, acquisitions are also the most convenient and feasible way to quickly acquire industry assets and expand channel customers.

The acquisition of Youyu by Yuyuan Shares is a typical case of rapid capital deployment in the pet industry. Prior to this, Yuyuan had acquired the pet Saas service platform "Ai Pet" and won Hill Product agent for foreign brands such as Si, Pinpu and so on in China. As a traditional industry enterprise, it has no experience in pet food production and research and development. This acquisition of Youyu has enriched its pet business sector and accelerated its industrial layout.

The industry is constantly changing, and time is becoming increasingly important for companies that want to deepen their presence in the pet industry. As the conditions for market mergers and acquisitions continue to mature, I believe that more and more outstanding domestic brands will be included in the large group system. This is not only a critical stage for brands to become bigger and stronger, but also the inevitable development law of the industry.

02

When selling products/businesses, the pet food industry needs to have bright spots to follow

Funds are smart, but they are also picky.

The current competitive situation in the pet food industry continues to require companies to find their own unique development path. Zeal acquired by China Pet focuses on pet milk, while Real Pet acquired by New Hope features fresh pet food. The stronger the product features and the clearer the brand recognition, the smoother the post-acquisition transformation operations will be.

Youyu was founded in 2017, starting from the pet-raising lifestyle of urban youth, taking young people as a driving force, and relying on a series of new marketing strategies to obtain traffic dividends. In 2018, its "seven kinds of fish cat food" officially entered the market. The product has obvious youthful features, emphasizing scientific formula, traceable raw materials, and guaranteed ingredient safety.

03

Promoted by capital, IPO is not the only option for pet food entrepreneurship

China has established pet food companies in recent years Enterprises have obvious capital characteristics behind them. Typical examples include Jinding Capital, backed by China Chong Chong, which has invested in many companies in the market.

The protagonist of this acquisition, Youyu, is backed by institutional shareholders such as Tiantu Capital and Xiaoguo Culture. The exit demands of institutional shareholders are also an important force in promoting corporate mergers and acquisitions.

Being bigger and stronger and achieving an IPO is the most ideal state for a business to start a business, but it is undeniable that in the current pet food industry, especially on the brand side, due to the fragmentation of traffic and user groups, As well as the scale restrictions on brand growth caused by full industry competition, fewer and fewer companies can grow into qualified IPOs.

Domestic food brands that currently have a solid position either have obvious brand effects and capital capabilities after a long period of development and accumulation, such as Guobao Maifudi, etc.; or they have strong shareholder capital background and can Continuously make online breakthroughs, such as NetEase Yanxuan, etc.

For those brands with a short development time, they achieve sales breakthroughs by focusing on segmented groups in the early stage, but they are often prone to lack of stamina in the later stages of development. At this time, Exiting through mergers and acquisitions is the best choice for entrepreneurial teams and institutional shareholders.