With plagiarism and involution becoming the norm, can smart pet products become a global brand?

Whether on domestic or overseas social platforms, " furry kids " are very popular. When watching short videos, few people can resist the "temptation" of kittens and puppies and stay on the phone interface for a few seconds.

According to the 2023-2024 survey results of the American Pet Products Association ( APPA), by 2022, 66% of American households will own pets, equivalent to approximately 86.9 million households with pets, and total consumption in the pet market will reach US$136.9 billion.

The number of overseas pet-owning families continues to rise, which has brought a lot of business opportunities to the pet economy. China's supply chain has always provided high-quality pet snacks and pet products to the world. With the online consumption of the epidemic, the trend of overseas consumers buying pet products online is also increasing. Among the many subcategories of the pet economy, smart pet products have been a hot track for brands to go overseas in the past two years.

Domestic mature brands such as CATLINK and PETKIT (Xiao Pei) are on the sales list of Amazon, while new brands such as Full Bulbous and Neakasa have also achieved good results on overseas crowdfunding platforms. Mature brands are actively going overseas, and new brands are working hard to develop product innovation.

In the overseas smart pet products market, Chinese factories and brands occupy a major market share. As a niche market, in the past two years, more and more powerful and creative Chinese brands have devoted themselves to technology research and development and launched innovative products, making the smart pet products track hot.

While the market is growing, the market environment is not entirely friendly. As a subcategory of smart home appliances, smart pet products, like small home appliances, are prone to white-labeling problems on the road to overseas expansion, and the branding journey is full of unknown challenges.

The market is hot, but there is a lack of top brands

An obvious trend is that many pet owners have begun to treat their pets as family members, from meeting their pets' basic survival needs to paying attention to their pets' mental health and quality of life. Many people joke that people nowadays treat their pets as their own children.

As pet owners' needs gradually deepen, the pet economy has become an increasingly hot track. In March 2023, a research report released by Bloomberg Intelligence stated that by 2030, the global pet market will grow from the current US$320 billion to US$500 billion.

The main growth point is due to the increase in the number of pets and the increasing demand for high-end pet care. As the pet economy moves towards high-end, the smart pet products track has also ushered in rapid growth. According to Grand View Research, by 2027, the global smart pet technology market will reach US$20.5 billion, with a compound annual growth rate of 24%.

Smart pet products include IoT devices such as automatic feeders, GPS trackers, and health detection wearable devices. Currently, the popular subcategories of smart pet products include smart litter boxes, smart feeders, smart water dispensers, pet monitoring cameras, smart collars, smart dog trainers, hair blowers, etc.

Taking smart feeders as an example, Fact.MR's latest report shows that in the past four years, the global market value of smart pet feeders has grown at a compound annual growth rate of 4.7%. In 2021, the market size of smart feeders was approximately US$187.3 million. By 2032, it will maintain a compound annual growth rate of 7.8%.

Smart pet products are undoubtedly a huge market for cross-border sellers and brands. An industry insider in the pet products industry told Ennet that currently, smart pet products overseas are basically dominated by Chinese sellers and Chinese factories .

On SellerSprite, we can see that many of the sellers at the top of the sales list, whether it is a smart cat litter box, feeder, water dispenser, camera, or hair dryer, are Chinese sellers.

Among them, PETKIT and CATLINK are the leading brands of smart pet products in China. In the Best Sellers list of Amazon US, PETKIT's smart feeder, smart cat litter box, and CATLINK's smart cat litter box are all ranked at the top of the list.

In the pet smart product category, PETLIBRO and VOLUAS are at the forefront of smart feeders and smart water dispensers respectively, but the products of these two brands are also produced in Chinese factories.

He Chuchu, product manager of smart pet brand Neakasa, told Ennet that there are many subcategories of smart pet products, and currently no company can take the lead in several categories. " It is mainly because the technologies used by everyone are actually different. Cat litter boxes, feeders, and water dispensers use relatively little reuse of technology and R&D capabilities. " He Chuchu mentioned that currently, there are still a lot of cases of using the same mold and OEM production for domestic smart pets going overseas.

A senior person in the pet supplies industry also told Yien.com that even though Xiaopei and CATLINK are leading brands in China, in the European and American markets, their impression is still that of white-label products , and they still have a long way to go to establish themselves as a brand .

In the smart pet products market, there are no leading brands overseas, but the Chinese supply chain has taken the lead in this field. Many people have seen this opportunity and want to seize the market bonus period and create a global brand of smart pet products.

Product innovation is the first step for smart pet brands to go overseas. However, “ copycat sales ” and internal competition have become problems on the road to branding.

" Follow-selling " and price wars

One characteristic of smart pet products is that they have certain product innovations, but at the same time, the technical barriers are not high and are easily imitated by sellers.

Neakasa launched a pet groomer in 2021 , combining the functions of a vacuum cleaner with a pet groomer, featuring a combination of "1 host + 6 different accessories" to meet the various needs of pet grooming, shaving, and removing loose hair. This product hits the pain points of many pet owners, became a hit product on Amazon, and received a lot of positive reviews from users.

In the smart pet category, there are not many hot-selling products, so when this product became popular, it quickly became the object of imitation, and was soon copied and sold by other sellers.

" It's only been half a year since we developed this product, but when we went to a pet show, we found that almost every smart pet product company was making it. Because a new category has emerged, everyone can quickly calculate your costs and gross profit and start a price war with you. " He Chuchu said that there are always more businesses in this world looking for opportunities, so if you want to establish a brand threshold in pet smart products, it will not be possible in the short term.

The impact of copycat sales was directly reflected in the profit margin. Neakasa had to increase its advertising budget and lower prices during promotions. He Chuchu revealed that the gross profit of this hair trimmer product was reduced from 30%-40% to 15%-20%.

As for the products that are copied, He Chuchu said that competitors can already achieve the same functions as Neakasa products, but there are still gaps in details and quality, such as durability, smoothness of hair grooming, noise control and quality level, which are advantages that competitors do not have for the time being.

" Because we have already stepped into some pitfalls and we already have relatively large sales volumes globally, our bargaining power in the supply chain and our ability to control channels will be stronger, " said He Chuchu.

Another brand that makes smart cat litter boxes for pets, Furbulous, also expressed similar concerns. Furbulous is a young entrepreneurial team that launched a fully automatic packaging smart cat litter box at the end of 2022, breaking the highest crowdfunding record in the pet category that year. It has now achieved considerable results in Europe, the United States, and Taiwan.

2023 is the year of " involution " in the smart cat litter box category. Martin, the founder of Furbulous , said that in 2023, a large number of white-label vendors entered Amazon, causing the price of smart cat litter boxes to be lowered. " The average price was reduced from $599 to $399," Martin said.

This has had a significant impact on independent innovative brands. When profit margins decrease, less money can be invested in research and development, which is not conducive to the development of new products and the long-term development of brands.

Smart cat litter boxes are a category with a relatively high threshold among smart pet products. Ruby, co-founder of Furbulous, said that Furbulous' products have not been imitated so far. In September 2022, Furbulous' product structure diagram and R&D process have been made public on the crowdfunding platform, but there are no imitations so far. The reason is that the mold opening cost of smart cat litter boxes is relatively high, and the biggest barriers are actually brand and ecology. But Martin also predicts that by this year, corresponding imitations may appear on the market.

With the lesson of the hair grooming product being copied, Neakasa began to consciously protect the intellectual property rights of its latest semi-open smart cat litter box. However, He Chuchu said that within a week of the product being sold, a colleague at the pet exhibition posted a circle of friends, took a photo of Neakasa's product, and wrote " starting to learn about open cat litter boxes ."

On the one hand, new products have just been launched and have not yet occupied the market share. On the other hand, competitors are beginning to " eyeball " the market. Smart pet products have to face a harsh market competition environment when they go overseas. How to avoid vicious competition, deepen brand awareness overseas, and establish brand barriers are the challenges faced by smart pet product brands.

Brand Barrier

Among the many categories of smart pet products, smart cat litter boxes are products with relatively high technical barriers, requiring 10-30 million yuan in R&D investment. Therefore, many innovative brands hope to find a breakthrough in smart cat litter boxes, create innovative products, and then conquer other smart pet categories.

According to a report released by Future Market Insights (FMI), it is estimated that the global automatic cat litter box market will reach approximately US$496.9 million in 2022, and is expected to grow to US$1.1 billion by 2033. The large growth space and the lack of a head effect have brought opportunities for brands to go global.

Neakasa's innovative approach is to find the pain points of smart cat litter boxes based on existing products on the market and then improve and innovate the products.

He Chuchu said that there are three main pain points for smart cat litter boxes on the market. First, cats are unwilling to use them, second, the sensors are prone to malfunction, and third, there is a strong odor.

" There are two logics for cats and humans to go to the toilet. Cats are wild animals and have no sense of shame when going to the toilet. They are also vulnerable and need to see the surrounding environment to feel safe, so cats need an open toilet. " He Chuchu said that the smart cat litter boxes on the market are basically closed " villa " style, with only a small opening for cats to enter and exit, and Neakasa's innovation is the open smart cat litter box design.

Regarding the sensor problem, Neakasa's open smart cat litter box reduces unnecessary sensors and reduces the failure rate; and regarding the odor problem, Neakasa seals the litter box to reduce odor.

Regarding the technical issues of the open smart cat litter box, He Chuchu said that the function of the smart cat litter box to automatically clean the cat litter is a rotating circular motion. According to the engineers' thinking, it is most reasonable to make a complete circle. If the circle is cut in half, the difficulty of research and development will become higher. It is necessary to find better motors, gearboxes, and smaller reduction ratios. This is the difficulty in the development of this product .

The semi-open design also solves other pain points. It becomes more convenient to change the cat litter and clean the litter box, and it can accommodate large cats.

At present, Neakasa's semi-open smart cat litter box has been sold in China, with daily sales reaching several hundred units, and more than 3,000 units have been crowdfunded overseas.

But even though he has applied for patents for the technology and appearance, He Chuchu still worries that the product will be copied and sold later. " I can only focus more on the product, thinking about how to make it better and iterating it continuously, " said He Chuchu.

Furbulous Box is also a smart cat litter box brand. Its product innovation lies in automatic packaging. After the cat litter box is finished, the cat's feces are automatically collected in a garbage bag and then automatically sealed. This is convenient for pet owners and reduces odor, protecting the health of people and pets. In addition to product innovation, Furbulous is committed to building its brand image and outputting its values .

Furbulous started from the crowdfunding platform Indi e gogo, and has accumulated a group of core users since the beginning of crowdfunding. Ruby said that Furbulous has always maintained equal and sincere communication with users. " As a breakthrough product, since the crowdfunding in 2022, users can see our step-by-step growth," Ruby said, " They will give us suggestions, and we will feedback the user's suggestions to product iteration . We have in-depth communication with users and maintain a relatively high level of trust. "

Martin gave an example, for example, in the first generation of Furbulous Box, the filter could not completely filter out small cat litter particles. After receiving feedback from users, Furbulous quickly updated a new version of the filter. " We are continuously accepting user feedback and making improvements on other product and software details, " Martin said.

" Users can sense the brand's care from every detail, and they will think we are ' trushworthy' and can be trusted . And we have a dedicated team to communicate directly with users and solve problems one by one. " Ruby said.

In the process of smart pet products going global, brand building is an important part. Whether the brand can strengthen the trust and recognition of overseas consumers determines whether the brand can develop in the long run overseas. Furbulous Box also cooperates with local adoption agencies and non-profit organizations . " Only by frequent contact in daily life can the value of the brand be better demonstrated. " Martin said in a media interview.

However, although it already has the technology and brand building capabilities, Furbulous still faces pressure from the fierce competition in the current smart pet products market and cannot avoid the impact of price wars.

Martin predicts that the competition in the smart pet products market will continue for another 3-5 years before the brand can be fully established.

The track is still hot, and new products and brands are still pouring in.

Where is the next innovation?

As mentioned earlier, there are many subcategories of smart pet products. Currently, product innovation is concentrated in the category of smart cat litter boxes. With the in-depth development of the market, finding new innovation points can help brands find more growth.

In the smart pet market, there are two main innovations: one is the innovation of existing categories, and the other is the discovery of new categories.

In addition to smart cat litter boxes, existing categories also include smart feeders, smart water dispensers, surveillance cameras, smart collars, etc. The technical threshold of these categories is not high, they are easy to be imitated and copied, and they have certain innovation difficulties in terms of intelligence.

Hu Zige, a pet product seller, sells smart water dispensers and pet heating beds. He told En.com that the product innovation he makes is mainly based on combination innovation, so that users pay for the design. For example, wireless charging and heating technology is added to the water dispenser, mobile phone APP control is added, and the appearance material is upgraded. " Micro-innovation has the highest success rate and the lowest risk. " Hu Zige said.

In terms of intelligent innovation, feeders and water dispensers are two categories with great potential. The next intelligent product that Furbulous will launch is an intelligent pet water dispenser. Martin said that the core of this product will be the filtration system, and it is hoped that the filtration effect will be better than that of mainstream products on the market. " Then the next step is to test the market's acceptance. " Martin said.

In addition to innovations in existing categories, new categories of smart pet products are also emerging.

Founded by Chen Hang (nickname: Wu Zhao), the former CEO of Alibaba DingTalk , HHOLOVE, a smart pet brand, launched its self-developed product O Sitter, a smart cat companion robot that combines functions such as "life recording + companionship and fun + safe feeding", entering the pet companion robot market. This product is one of the most popular smart pet product category projects on Kickstarter in the first half of 2023.

In addition, smart dog training and pet health monitoring are also new product categories.

In the next one or two years, we expect to see a flourishing competition in the smart pet market.

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