The Russian pet food market today is worth €3 billion ($3.3 billion) and
is expected to grow to €10 billion ($11 billion) in the coming years.
This ambition will need a well-structured pet retail network with professionally run manufacturers and distributors throughout the
country. PETS International visited the main players.
Pet retail sector
The Russian pet retail sector consists of over 12,000 pet shops and 30 pet retail chains. The biggest are
Four Paws (256+ shops) and Bethowen (110 shops). There are the following types of outlets:
- Street market pavilions
- Independent stores
- Local chains in large cities
- National chains
- Supermarkets and hypermarkets
- Internet channels.
Pet retail outlets
PETS International visited several pet retail outlets.
1. Street market pavilions
Small shops, approximately 50 sqm, mostly located in permanent market hall locations. They have a limited assortment, but their strength is knowing their customers well. This allows them to tailor products and prices to the buyer.
Veterinarians have a limited market share. But most local or national chains have veterinarian corners in their shops.
3 Independent stores
Spread over Russia, even in places difficult to get to, there are independent pet shops. Talking to big distributors such as Valta and the Triol Group, it became clear that their services and training have helped to professionalise these retailers.
4. Local chains in large cities
Some chains have 20-30 stores in large regional cities. Examples are Gold Fish, Vetna and Mokryi Nos.
5. National chains
Companies like Bethowen and Four Paws, with 110 stores and 256 stores respectively in large urban centres, including Moscow, are working towards national distribution.
6. Supermarkets and hypermarkets
Found in cities in stand-alone locations or modern shopping malls. Some, such as Lenta, are opening pet speciality shop-in-shop formats, while others have a wide range of pet products.
7. Internet channels
The main online platforms are: beru.ru, wildberries.ru and ozon.ru, but there are other smaller platforms too.
Wildberries also has 4,000 ‘fitting rooms’, where orders can be picked up and clothing tried on. Another 4,000 locations are planned.
Pet retail case studies
All chains are professional and well-prepared for the modern consumer. For in-depth insights, we spoke to some chain owners and CEOs. The case studies presented here are based on those discussions.
Case study: Markvet (retailer)
Markvet is a chain of seven pet shops that opened in 1992, when there were not many independent entrepreneurs. So most shops are located in unusual places, such as basements of apartment buildings. The shops are, however, very professionally run, with a wide range of products and a veterinarian corner. The staff, who they train themselves, are also very professional, with excellent knowledge and understanding of local customer needs. Surprisingly, Markvet has an online channel too. And they import luxury brands such as Hunter.
Case study: Bethowen (retailer)
Bethowen has 110 stores: 100 in the Moscow area and 10+ stores in St. Petersburg and other urban centres. Rents and property availability limit the number of new stores. They have an online platform, and part of their retail concept is the integration of offline shops to give the younger generation fast and cheap deliveries. Bethowen has eighteen private label food and accessory brands. All shops have a veterinarian corner for OTC and prescriptionproducts. CRM is important to Bethowen, allowing a customer-centric approach. Bethowen is increasingly customer focussed, treating pet owners as pet parents. Their brand positioning is: ‘Happy family with a pet’ and is all about storytelling and emotions. This is also reflected in their store design.
Case study: Four Paws (retailer)
Four Paws has 260+ shops in Moscow and 17 other regions. They are expanding eastwards towards other big cities. Their policy is to open shops close to supermarkets/hypermarkets to ensure store traffic. Four Paws has its own academy including e-learning; staff expertise is one of their USPs. Fast delivery is another. Orders placed via the omni-channel are delivered in 3-4 hours, or are available within twenty minutes at the closest shop. Ordering is also possible via their app. The m-commerce app sends push messages. Their m-commerce platform is to be further developed to provide a personalised customer experience. They are also testing self-checkouts. Many of these new applications are tested in their 750 sqm flagship pet centre in Moscow, including a veterinary clinic, grooming and educational space for pet parents.
Case study: Dino Zoo (retailer)
A 3,000 sqm flagship store opened in Riga in 2017, and there is now a 1,500 sqm flagship store in Moscow, in the prestigious new shopping centre ‘Salaris’, which will attract 900,000 shoppers per month. This is Dino Zoo, part of the Plaček Group. Plaček is strong in the Eastern European market, and is now launching in Russia. Their ambition is to become a strong player here too, with a ‘soft franchise’ approach rather than their own shops. This will contribute to sales of their private labels. The company is fully aware of modern consumer needs and behaviour, and their marketing communication strategy offline and online is dedicated to this.
Case study: Triol Group (distributor)
Triol Group has been a manufacturer and distributor since 1993. It also works as a retailer under the name Pet City, with a 600 sqm flagship store in a Moscow suburb. The company is one of the leading distributors in the Russian pet market, with 18,000 SKU, a state-of-the-art 22,000 sqm warehouse and 500 employees. Triol has branches in Moscow and another eleven cities across Russia and Belarus. They are the positive and creative force in the market, with their own private label, but also selling leading brands and with a licence to sell Disney products. Above all, their products are priced competitively. This approach has been successful, leading to a year-by-year ongoing double-digit business increase, which outpaces market developments. To avoid the impact of currency fluctuations, their strategy is to develop and sell more of their own products.
Case study: Valta Pet Products (distributor)
With 23 years of experience and expertise, Valta’s mission is to influence the pet industry by being more than just a distributor and hoping to have a positive impact on pet healthcare. To achieve this, they have their own government-licensed academy. Valta has regional offices throughout Russia. Here, they persuade pet shop owners to become more state of the art, with a consumer approach, modern interior and better financial conditions. To work efficiently in this huge market, they run an app which gives individual terms and a 3D picture of the product. It makes ordering very effective. Their cash & carry shops all over the country make local deliveries easier and provide locations for meetings and training. Their strategy as a ‘holistic’ distributor is based on five pillars: logistics, marketing, finance,
promoting the emotional side of pet ownership via events and YouTube, and delivering all this via consultancy.
Case study: Apicenna (manufacturer)
Apicenna is a leading veterinary pharmaceutical company with a 30-year history. Specialised in dedicated products for farm and, particularly, companion animals, it manufactures medicines and cosmetics as well as food additives for the production of canned food. The production facility is state of the art, with certified clean room conditions. Innovation is key for the company, and in 2020 Apicenna will be opening a new R&D facility. It is one of the top three players in veterinarian products in Russia, with a constant increase in turnover that outpaces market developments. The company is set to expand further towards both Eastern Europe and North Africa, and aims to become market leader in private label solutions. They believe in sharing their professional knowledge through education programmes for veterinarians and pet shops, as well as with consumers via social media and advertising.
Zooinform is a media company specialised in the pet industry and with 22 years’ experience and a wide network. It is an information hub for the Russian pet industry and has several publications for the b-to-b and b-to-c segments as well as an online presence. As the PETS International agent in Russia, Zooinform provides international companies with services for launching products, market overview, searching for reliable business partners, promotion, PR and communications.