South Korean pet parents spent the highest in 4 years

Owners are buying more, and the local industry is seeing this as a huge opportunity for growth.

New data compiled by Korean credit card company Shinhan Card revealed that the annual expenditure per capita on pets and the number of pet-related businesses in the country are increasing.

According to the research widely reported by local media, the average annual spending on pet-related services and products in 2022 reached ₩353,000 ($268/€245) per person.

This amount would be the highest in 4 years. In 2019, the average spent was ₩262,000 ($196/€180) and reached ₩313,000 ($233/€214) in 2021.

The number of card payments to purchase pet-related services in South Korea increased by 21% from 2019 to 2021.

More pet businesses

Shinhan Card revealed that pet-related business increased by 48% in the last 4 years, with the number of newly established dog hotels increasing by 211% and dog training facilities by 275%.

Lee Eun-hee, a consumer science professor at Inha University, told The Korea Herald that the boom in the pet industry is attributed to the fact that people increasingly give up marriage and childbirth, and they have more disposable income to spend on their pets.

The Korea Rural Economic Institute (KREI) predicts that the country’s pet market will reach a market value of ₩4.5 trillion ($3.2B/€3B) in 2023, rising to ₩6 trillion ($4.4B/€4.1B) by 2027.

Pet insurance still needs to catch up

A recent study by the Korea Credit Information Service divulged that only 0.8% of 7.2 million pet owners in the country had pet insurance plans as of October 2022. This is about 55,000.

The low rate could be due to the limited coverage of existing plans and the difficulty of insurance providers in estimating the costs of various pet medical services in the country.

In fact, more than 8 out of 10 respondents (82.9%) to a survey by the Consumers Federation of Korea described veterinary medical expenses as “burdensome.”

Insurance companies have requested the reintroduction of a fee-for-service model, which was discontinued in 1999, to accumulate statistical data for launching more pet insurance plans. Under this model, healthcare providers are reimbursed for their services with fixed fees.