Market Trends of Vietnam Pet Food Industry
This section covers the major market trends shaping the Vietnam Pet Food Market according to our research experts:
Specialized Pet Shop in Vietnam is Driving the Sales of Pet Food
- Pet humanization is highly seen in major urban cities like Ho Chi Minh City (Saigon) and Hanoi and secondary urban centers of Hai Phong, Can Tho, and Da Nang, Vietnam. According to United Nations Economic and Social Commission for Asia and the Pacific (UNESCAP), large concentrations of middle-class families in these places are usually in their 30s or older, with full control of family budgets, and responsible for all purchases that include pet food and pet services.
- Vietnam's pet food sector’s success will largely depend on the manufacturers' promotional strength and consumer interaction capabilities, which helps penetrate products into the country’s market quickly.
- Most of the specialized pet shops offer global brands that attract consumers. These specialized pet shops in Vietnam are family-financed due to very high leasing rates in urban centers, local products relying on expensive imports, supply chain and warehousing issues, a restrictive legal and business environment, and difficulties in obtaining investment and operating capital from financial institutions.
- Profit margins are slim as Vietnamese pet owners buy on price, as they prefer the economy to mid-priced products. The emergence of these modern pet retail shops is being developed by young, pet-loving entrepreneurs seeing the need to offer pet care products and services for small companion animals. Hence, the profit margins obtained by the customers with respect to the specialized pet shops are increasing the market for pet food in Vietnam.
Growing Export Market for Vietnamese Pet Food
Vietnam's pet product manufacturing sectors for export and local markets are developing. According to the International Trade Centre, the United States, China, and Cambodia are the major importers of pet food from Vietnam, with the United States holding a major share. Competition is fierce due to an abundance of inexpensive pet products of low to economical price ranges in the region. International manufacturers from Japan (Hotta) and the United States (RefinedKind Pet Products) have their pet products manufactured in Vietnam through private manufacturing agreements with local Vietnamese OEM companies. All these products are shipped and sold outside Vietnam.
Moreover, the American Feed Industry Association (AFIA) claimed that it continues to look for ways to improve the United States competitiveness and market access for pet food abroad, including prioritizing holding China to its recent trade commitments and pursuing new opportunities in Vietnam. In the past scenario, there is minimal competition and variety in the marketplace. However, now is the time for the United States pet food manufacturers to look toward Vietnam as a real potential growth opportunity. Such developments are expected to increase the demand for pet foods from foreign countries. Kim Binh Minh Co., Tran Danh Co. Ltd, and Lien Thang Manufacturer, Investment & Trading Co. are the leading top three manufacturers of pet products in Vietnam for the local and international markets.
