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Cloud firms rush to secure footing in pet data market

Startups becoming core players in growing pet care market

By May 25, 2021 (Gmt+09:00)

Cloud firms rush to secure footing in pet data market

The pet care market is set to ride a "cloud wave" as companies make use of pet data on cloud storage spaces to tap into the growing pet care market, including the pet beauty, insurance and food businesses.

On May 25, cloud-managed service provider (MSP) Bespin Global announced that it will be joining a pet cloud alliance founded by South Korean pet care startup, Sparkpet Korea.

As part of the alliance, Bespin Global will focus on developing various data-driven business models for the pet care industry by compiling big data and offering support for cloud infrastructure.

Last week, Sparkpet announced the launch of the pet cloud alliance as it entered a memorandum of understanding (MOU) with companies such as Shinsegae International, Amorepacific, Hanwha General Insurance and VIP Animal Medical Center. The first project under the alliance is to gather data from six industries, including the beauty, insurance and medical treatment sectors. 

Pet care market size forecast

Source: Korea Rural Economic Institute

Graphics by Jerry Lee


The pet care market has been growing at a fast pace. According to the Ministry of Agriculture, Food and Rural Affairs, there are over 15 million pet owners in Korea as of 2019. Also, the Korea Rural Economic Institute estimates that the pet-related market will reach 6 trillion won ($5.3 billion) by 2027 -- posting an average annual growth rate of around 10%.

The pet data market is an emerging market where companies are competing fiercely for the lead as there isn't yet a dominant market player. For example, Hanwha General Insurance has been rolling out various pet-related insurance products. In the future, the insurance company aims to develop exclusive products based on cloud-based pet data.

Shinsegae International and Amorepacific, which provide pet beauty and lifestyle products, are also expected to reap the benefits of the pet cloud data system.

STARTUPS DOMINATE THE MARKET

Startups are very active in the pet care market. For example, Sparkpet was co-created by startup accelerator Spark Labs in 2019. Since its inception, the startup has been expanding its business, such as entering a partnership with Konkuk University to create a pet playground.

Until recently, the Korean pet care market was mostly driven by large business groups, which targeted the pet food market as their key area of business. But it wasn’t easy for them to compete against larger and popular foreign brands already dominating the market.

“The entry barrier was too high for domestic companies to compete against foreign pet food brands that were recommended by vets. Also, pet owners tend to stick with the same brand that they’ve been feeding their pets, meaning there were limitations to increasing market share,” said an industry official.

Korea’s F&B giants CJ CheilJedang and Binggrae eventually scrapped their pet food operations in 2019.

Meanwhile, startups are filling the empty space by venturing into areas beyond the pet food market. They are enjoying growth by tapping into a wider range of businesses, such as pet care service matching platforms, pet funeral services, pet healthcare and pet care product delivery platforms.

“The data that we collect with companies at the forefront of healthcare, beauty and lifestyle industry will lay the groundwork to create innovative products and services," said Chu Young-ju, the chief executive of Sparkpet.

Write to See-eun Lee at see@hankyung.com

Danbee Lee edited this article.

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