Another one! East China's cross-border seller successfully listed

As early as 2020, Yien.com reported that Hangzhou Tianyuan Pet was going for an IPO, but since it submitted its registration application in May last year, no new news has been released. Recently, good news finally came: the China Securities Regulatory Commission approved Tianyuan Pet's registration application for an initial public offering and listing on the Growth Enterprise Market.

Overseas sales are the main source of revenue, accounting for more than 70% last year

The prospectus shows that Tianyuan Pet's revenue in 2019, 2020 and 2021 was 1.049 billion yuan, 1.45 billion yuan and 1.854 billion yuan respectively; the net profit was 85.78 million yuan, 114 million yuan and 107 million yuan respectively; the net profit after deducting non-recurring items was 87.17 million yuan, 100 million yuan and 96.2866 million yuan respectively.

In 2019, 2020 and 2021, the proportion of Tianyuan Pet's overseas sales revenue to its main business revenue was 90.94%, 74.08% and 72.31% respectively, which was the company's main source of revenue and profit.

Tianyuan Pet 's customers are mainly well-known large chain retailers, professional pet product chain stores, and online e-commerce platforms. From 2019 to 2020, Amazon has been one of its top five customers. In 2021, due to problems with the connection with Amazon's own system caused by the switch of Amazon's order system, Tianyuan Pet's transaction volume with it declined, and Amazon fell to its seventh largest customer during the period .

In addition to Amazon, Tianyuan Pet's major customers include Walmart, a large supermarket chain, Chewy , an internationally renowned e-commerce company , and Fressnapf, a large pet product chain . It is reported that Tianyuan Pet mainly uses cat climbing frames as a starting point to enter the supplier system of these major customers, and currently cat climbing frames are the main sales to the North American market .

During the reporting period, Tianyuan Pet's main business income included sales revenue of various pet products, mainly sales of pet bed mats, cat climbing frames and pet toys. The combined sales revenue of the three accounted for 70.64%, 62.01% and 61.68% of the main business income respectively .

It is not difficult to find that Tianyuan Pet's various products have obvious "innovation-driven development characteristics". The main business and products are innovative, creative and creative, and are deeply integrated with new technologies, new industries, new formats and new models.

For example, in terms of the creativity of new products , it targets the pain points of some pet-raising families, such as limited space and lack of unified design style for pet supplies and household products. Combining the actual needs and development concepts of promoting human-pet interaction, it has creatively developed a variety of new human-pet combining products, such as small cabinets, side tables, and shoe benches. It also develops traditional pet supplies for home use, making their craftsmanship, patterns, materials, etc. more compatible with the home environment, meeting the consumer needs of pet-raising families for saving space, multi-purpose devices, and unified styles, and realizing the creative design and development of new product categories.

Self-operated brands enter Amazon, with relatively high gross profit margins

In the process of conquering the overseas pet market, Tianyuan Pet is not satisfied with being just a "supplier". Although its main source of revenue is still non-proprietary brands, it has begun to step up efforts to build its own brands since 2020.

The prospectus shows that since 2020, Tianyuan Pet has started to conduct overseas online sales business through the Amazon platform, and its products are sold at retail prices. In 2020, Tianyuan Pet's own brand gross profit margin increased by 5.49 percentage points compared with the previous year, mainly because the subsidiary Hangzhou Saiwang carried out online retail business on the Amazon platforms in the United States, Japan and the United Kingdom that year. The high gross profit margin of such business has driven the overall gross profit margin of its own brand to increase.

In 2020 and 2021, Tianyuan Pet achieved revenues of RMB 15.1965 million and RMB 17.4479 million through overseas online platforms, of which revenues from Amazon were RMB 14.8403 million and RMB 14.2855 million, respectively. Although this accounts for a small proportion of total revenue, it is a solid step forward in building its own brand .

Facts have proved that Tianyuan Pet's move is correct. Compared with non-own brands, the gross profit margin of own brands is indeed higher. Taking 2021 as an example, the gross profit margin of own brands is 30.42%, while the gross profit margin of non-own brands is only 20.54%, which is nearly 10 percentage points higher.

At present, Tianyuan Pet's own brand is mainly cat climbing frames with higher retail prices , and its main stores on Amazon are Made4Pets and OHANA STORE . On Amazon North America , the number and amount of orders with a single amount of US$50 to US$200 account for a relatively high proportion.

Opening Made4Pets , I found that its overall reviews are good, with star ratings above 4.5, and most of the reviews are in the range of 300-900. Two of them even have accumulated more than 1,400 reviews. One of them is a green cat climbing frame in the shape of a cactus with natural sisal, which was launched in October 2020 and has received 1,500 reviews so far.

From the comments, we can see that many buyers paid for its appearance.

Pets are big consumers, as they are like family members

As we all know, the United States is the world's largest pet economy. In 2021, the U.S. pet industry directly and indirectly contributed $260.5 billion to the U.S. economy , an increase of nearly 40% from 2015 (US$221 billion).

For Americans, pets are their family members, so during holiday shopping, we can see a significant increase in sales data for some products. According to a survey conducted by Petco , the largest pet supplies retailer in the United States , on 1,000 dog/cat owners this year, nearly 80% of people included their pets in their holiday gift purchase plans, and compared with other family members (including parents, siblings), they are more likely to celebrate the holidays with their pets.

Every Halloween, Americans dress up their pets as well as themselves. According to the National Retail Federation's annual report , one in five people plan to dress their pets in costumes this year . Pet spending is expected to exceed last year and reach a new high of $710 million.

Among them, the most popular pet costumes include pumpkin ( 9%), hot dog (5%), bat (4%), bumblebee (3%) and witch (3%). It is worth noting that since the COVID-19 pandemic, Amazon delivery drivers have also become the pets and children of Americans who are happy to dress up. Not long ago, many American consumers complained that their dogs and children could not buy Amazon's "official" costumes.

According to the 2021-2022 National Pet Owners Survey conducted by the American Pet Products Association ( APPA), 70% of American households (about 90.5 million households) own pets. By animal type, cats, dogs, and freshwater fish are the top three most popular pets, and Wyoming is the state with the largest number of pets .

Looking around the world, we found that people’s preferred pets vary by country and region.

In Europe, the number one pet is the cat, with about 110.15 million cats in the whole of Europe . Among EU countries, Romania has the highest percentage of households with pet cats ( 47%). Spain has the lowest cat ownership rate in Europe , with only 11% of households owning at least one pet cat . In France, the number of cats is about twice that of pet dogs.

In the animal kingdom, pets even outnumber people in Australia ( about 29 million pets to 25 million people ) . About 40% of Australian households have at least one dog, followed by cats (27%), fish (11%) and birds (9%).

Surprisingly, Brazil, a developing country, is the fourth country in the world with the largest number of pets. In 2019, there were more than 140 million pets. Dogs are the favorite pets of Brazilian families , followed by birds and cats in third place .

Online shopping has now become an important channel for consumers to purchase pet supplies, and Amazon has become the leader in the field of online pet supplies . In the past 12 months, 59% of pet owners chose to buy pet products on Amazon, followed by Chewy ( 41% ) and Walmart ( 33 % ).