Creature Companion Magazine got an opportunity to have a conversation with Amol Sharma, Founder of PetSutra, a Gurgaon-based e-commerce company, which helps to make pet parenting easy in India. Being a resilient entrepreneur, who loves to unravel human minds, he talks in detail about the purchasing behaviour of Indian customer and also discusses about the viability and growth of pet care e-commerce market in India. Here are the excerpts…
Shed some light on the motivation behind founding PetSutra.
PetSutra was founded in 2016 with the vision of making pet parenting easy. We clearly believe that we want to be a platform that can provide a product apt according to the nutritional requirements and behavioural needs of pets. With ‘pet parenting’ replacing ‘pet ownership’, predominantly driven by millennials, it is the right time for the pet care market to flourish. Millennials are extremely discerning in their entire purchase behaviour and in choosing products that are natural or science based. That’s why we want to become an e-commerce platform providing products suitable according to the age, gender, breed, health condition etc.
The way we approach our business is not just as an e-commerce marketplace, but also a platform for educating pet parents, especially around nutrition. We have developed India’s first dog food diet calculator that can actually tell you accurate calorific values in macro nutrients, essential amino acids etc. that your pet requires. The reception to this tool has been great. We are taking this further by developing our own range of pet products. These are exciting times – now and in the coming years, for the pet care industry.
What are your thoughts on the Indian Pet Industry? How has it evolved and according to you what are the missing links around it?
I come from a FMCG background and I can tell you one of the aspects of the Indian Pet Industry is that traditional trade is largely fragmented. ‘Being fragmented in nature’ means that the assortment available in a particular store is significantly less because we don’t have a lot of retail chains. But what has changed over the years is that with retail chains, such as Heads Up For Tails, JUST DOGS etc. coming into play, consolidation is happening. This will lead to better customer service and increase in purchasing power. This is probably also going to lead to the opening of more retail chains. Further, we are going see a lot of D2C brands making their mark in a particular category such as pet grooming, pet accessories etc.
Secondly, as compared to FMCG, e-commerce penetration in pet care is already very high, close to 17–18%, whereas the former has only around 6% penetration. The clear reason behind this is availability of large assortments of products online and the convenience offered. Demand from tier II and tier III cities is on the rise because of this reason. In such situations, e-commerce becomes a logical choice.
I think in the coming times, around 25% of the pet care market would be present on e-commerce platforms, be it marketplaces or be it standalone pet e-commerce players such as PetSutra.
We see a lot of D2C brands in the market now. Instead of selling through retail stores or e-commerce companies, they sell direct to customers from their own websites. Is it a matter of concern for e-commerce companies in the long run?
To be honest… No! The founder of a D2C brand would ultimately want to get some traffic to their own website, but getting traffic to your own website either involves heavy investment in advertising and marketing or an investment in great content that should pull a customer to your website. Speaking about the customer, I think they would prefer trusting an established e-commerce company over the new individual platform. Understanding the shopping behaviour of the customer is very important here. E-commerce is all about getting better assortment; if the customer is getting all products ranging from pet grooming to pet food stacked under one roof, then why would he juggle between different websites. The only reason why a customer would prefer your website could be better pricing with heavy discounts or if you’ve already established trust among pet parents.
Creating D2C brand is easy, but the actual test is how long you can sustain in the market with or without funding and your vision behind creating your brand. The art of selling is how you differentiate yourself from your contemporaries.
In e-commerce, logistics and warehousing are the two important elements. How is PetSutra trying to work around this as these factors decide the profitability and non-profitability of a brand?
A brilliant question indeed! We are moving towards our 7 warehouse system, probably going to get live by quarter 3, where we would have 7 warehouses serving all zones in India. Ideally speaking, in my experience, you need to have close to 20 warehouses, which clearly means you should have money to have inventory because at the end of the day – the closer you are to the customer, the better is the time to serve, and better is the customer experience! It not only drives customer experience, but it brings down your logistics cost tremendously, and also it brings a lot of new elements into play such as same day delivery etc. There are 7 cities in India where every e-commerce company needs to have a warehouse if it needs to scale up quickly.
Nowadays, I have noticed various new e-commerce companies and D2C brands try to play their game based on discounts, lowering their prices unreasonably. I would like to advise them that they need to be a little cognizant. Lowering down the prices would create a doubt about the quality of a product in the minds of Indian customers. It’ll do more harm than good in the long run. So, it is very important to price your brand reasonably.
There is a big difference in funding scenario in the Indian Pet Care Industry between pre and post Covid periods. What do you think has changed in these two years that made investors take so much interest in the pet industry?
The commercial pet food market may seem small right now, but I clearly have a view that the total addressable market is very big. The pet care category is growing at a rapid pace; it is the category that attracts high spenders, people who are willing to spend as much as they can on their pets, so the customer lifetime value in this category is quite high. Also, the fact that millennials are now driving this category means that this expenditure is going to continue. It has a lot to offer in terms of growth and this is going to continue for some time now as the sentiment on this category would remain positive.
Though there are several investors who are still sitting on the fence because they haven’t figured out the model yet (whether it is omnichannel, or a private label, or a D2C), I think with time everybody is going to get their thesis correct. Having said that, we are very optimistic that we are going to see more and more funding happening towards D2C segment, which means the founders should be ready to raise the bar of their products displaying world class marketing skills. This is because generating initial revenue is easy but the key to success for any brand is its consistency in growing its numbers; and that would require brawn and brain both!
What new initiatives can we expect from PetSutra in the year 2022?
In the next 6 months, our main focus is going to be on improved pet technology, improved distribution and warehousing, and new product development. We believe it’s not a red ocean strategy that we want to play; it’s clearly a blue ocean strategy that we are targeting at because the market is really big. It’s not a ‘winner takes it all’ market; there is enough space for brands or platforms of all sizes to coexist and actually nurture each other.