Investing in the Emerging Pet Industry of Vietnam
There are a number of investment strategies you can investigate in the emerging pet industry of Vietnam including low cost manufacturing of pet products, sourcing Vietnam’s agricultural markets for pet food and supplement ingredients or inexpensive new pet product development designed for export to major pet markets (North America, EU or Japan) and for local growing pet markets within the economic regions of ASEAN*, which includes Vietnam.
Consider Vietnam as a source of low cost manufacturing for pet products
In the ultra competitive pet products markets any tactic that could improve your margins and increase your market share should be considered. You may already have your company producing products in China, and China is usually the first choice for low cost manufacturing of pet products. However, over the last 2 to 5 years that low cost advantage is slowly disappearing to other competitive countries, which includes Vietnam.
A recent survey from the American Chamber of Commerce in Singapore (August 2012) reveal that U.S. companies, within the next two to four years, will move their business operations from China to countries in Southeast Asia, due in all probability to a combination of rising factory worker wages and the cost of doing business in China. Source: Reuters Thomson
Development of unique products for the ASEAN growing pet markets
For new product development, focus on the emerging pet markets in the Southeast Asia, an economic region with a combined population of half a billion people. Granted, there are myriad differences within the individual nations of ASEAN, however by focusing on similarities like environmental concerns, and how they affect dogs and cats, or climate, population density, helps reduce the diversity of the collective of ASEAN countries. Also, any product that helps pet owners in the region to further develop deeper ‘pet humanization’ qualities, could lead to unique product development.
Successful companies that either localize their products or develop a new pet product for one country, say Vietnam, will allow you to access five other growing pet markets (Singapore, Thailand, Philippines, Indonesia and Malaysia) without much modifications and costs.
Tropical, sub-tropical and sub-equatorial climate in the ASEAN region
Other product development ideas should consider the cooling down, or calming of an dog and cat in this region. The heat and humidly is strong and constant. The rainy season brings massive displays of noise, light and water. Unfortunately, the rainy season is 6 months long and sometimes produce powerful storms every day.
So products that can be developed to make cats and dogs calm during these conditions would be appreciated by pet owners. Currently in Vietnam there is no products in the market. Also consider the uncomfortable abundant insect (mosquitoes) problems.
Security and Safety Product Types
Finally, security products could be developed to protect cats and dogs from harm from the living environment and public spaces in Vietnam.
For example, walking a dog in public can be a somewhat dangerous experience where there is frequent dog-nappings. Special harness and leash/collar products could be designed to help protect a dog owner against theft. Micro chip systems could also be considered.
Consider Vietnam’s agricultural products as ingredients for pet food production
In the very competitive pet industry there is continuous search for alternative and exotic ingredients for new pet products, demanded by discerning pet owners. Vietnam is a country that has abundant, exotic sources of proteins, grains, fruits and vegetables. The country is the second largest rice exporter in the world and it produces a large variety of fruits, vegetables (especially green leafy and grassy type of vegetables, high in nutrition) and a myriad of seafood and fish.
If you are sourcing new ingredients for supplements, consider Vietnam as a superior source of “super foods” that are abundant in this region. For example, consider a fruit called Gấc, found in Vietnam and neighbouring ASEAN countries. The gac fruit is reduced to a liquid (oil) and mixed with other foods, or made into supplements. Gac is a powerhouse of anti-oxidants, very large amounts of Vitamin A, C, D and E and Omega 3, 6 and 9! Pet supplements can be developed or used as an ingredient in pet foods.
*ASEAN or the Association of South East Nations include 10 countries: Cambodia, Brunei, Indonesia, Laos, Mynamar (Burma), Malaysia, Philippines, Singapore, Thailand and Vietnam.
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