Regional report: Southeast Asia – Rapid market expansion and room for growth
It’s the perfect moment for pet care businesses to make the most of dynamic trends and evolving consumer choices as Southeast Asia’s growth rate remains relatively high.
In 2023, the market size for pet care in Southeast Asia – including Indonesia, Malaysia, Philippines, Singapore, Thailand and Vietnam, while modeling markets in Brunei, Cambodia, Laos and Myanmar – was estimated at $3.3 billion (€3.1B). At $3 billion (€2.8B), the pet food sector dominates the Southeast Asian pet care market, accounting for 90% of sales. We look at the key factors driving pet food sales growth in the region, and the outlook for the future.
Growth and expansion rates
Over the past five years, the market has experienced rapid development with a Compound Annual Growth Rate (CAGR) of 13% in value terms. The global cost of living crisis in 2022 had an impact on its development, leading to a slowdown in growth. Plus, as markets approach higher saturation, growth rates are anticipated to decelerate, with the CAGR decreasing to 9% in the 2023 2028 period. Nevertheless, this rate remains higher than in Asia-Pacific as a whole or other global regions. With prepared food consumption and pet ownership remaining relatively low, there is room for growth and the markets are expanding rapidly.
Markets by country
The remarkable growth of the Southeast Asian pet food market can be primarily attributed to the rapid development of the pet food markets in Thailand, Indonesia and the Philippines. The largest market both in volume and value terms is Thailand at $1.5 billion (€1.4B), which accounts for nearly half of the entire Southeast Asian market. As a result, its dynamics significantly influence the development of the regional market.
While Thailand made a solid contribution due to its size, the other two countries experienced the highest growth rates. Indonesia witnessed more than threefold growth between 2018 and 2023, and the Philippines doubled in size over the same period.
Fastest-growing sections
Mid-priced pet food is the bulk category within pet food in Southeast Asia, accounting for 44% of total sales in 2023. Meanwhile, the fastest-growing categories over 2018-2023 were premium pet food, and treats and mixers, both experiencing a 16% CAGR. This growth is driven by humanization and premiumization trends coming from more mature Western markets. In 2022-2023, impacted by declining purchasing power, the growth rates of premium pet food slowed down but remained at the 14% year-on year level, the fastest within pet care categories.
Dogs versus cats
Cat food exhibited faster development than dog food from 2018 to 2023, achieving a 16% CAGR, whereas dog food recorded 11%. Cat food already accounts for 42% of all pet food sales in the region, and that share is set to expand further.
The rapid growth of the cat food market is attributed to the increasing ownership of cats. Since 2018, the cat population in the region has surged by 43% and is expected to further propel the development of cat food over the forecast period. This is linked to the urbanization process, as it’s more convenient to keep a cat in a small urban apartment.
In line with the rising popularity of cat ownership, cat treats and mixers, and premium cat food – both wet and dry – have grown the most since 2018. Treats and mixers are becoming increasingly premium, with many brands developing products containing vitamins and functional ingredients.
Meanwhile, the cost of living crisis of 2022-2023 also intensified market polarization. Besides the continued growth of the premium products, the economy segment also strengthened as consumers sought the best deals and more affordable options.
Looking for healthy products
In line with the ongoing tendency to humanize pets, pet parents have become more conscious of their pets’ health and wellness. Echoing the global trend, Southeast Asian countries share the same top functional claims: high protein, natural, a good source of vitamins, and immune system health.
The market penetration of pet food products with such claims in Indonesia and Singapore increased rapidly over the period 2019 2022. It’s now significantly higher than the global average, and distinctly higher than in the Asia-Pacific market, where the percentage of such claims is less than 10%. In fact, in this respect Southeast Asia is more comparable to the mature markets of North America and Western Europe.
The market in Thailand recorded much more modest growth rates for these claims, being overshadowed by health-specific claims such as ‘bone health’, which are developing rapidly in the market.
Future growth rates
Over the period 2023-2028, the pet care market in Southeast Asia is poised to record 9% growth, with premium cat food driving the market. The evolution of channels will significantly contribute to market growth, as the e-commerce channel in pet care is expected to double in size in the region. Within online sales, subscription pet meal plans – as one form of direct-to- consumer (D2C) activity – will gain more visibility.
The Indonesian and Vietnamese pet care markets are expected to record the fastest growth rates from 2023-2028 due to the rise in pet ownership. Meanwhile, Thailand will contribute the most to the overall dynamics of the pet care market in the region thanks to maintaining relatively fast growth rates.
Global visibility
The pet care market in Southeast Asia is undergoing a significant transformation, marked by rises in pet ownership, humanization and awareness of pet health. In the years ahead, the fast-growing pet care markets in Southeast Asia will become more visible, not only within the Asia-Pacific region but also on a global scale.
In particular, Thailand and Indonesia are expected to be among the world’s top 10 countries with the highest absolute growth in pet care from 2023-2028. In view of these dynamic trends and evolving consumer preferences, businesses should not miss the chance to capitalize on the emerging opportunities in this region.
The data quoted in this article is based on Euromonitor’s Pet Care edition 2024.
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