The Spring Festival is booming, and Hema has entered the market. Is door-to-door cat feeding and dog walking for 98 yuan per time a good business?

During the Spring Festival, most people go home to celebrate the New Year, but what should we do with the cats and dogs at home? A month before the Spring Festival, Hema launched a special service in Shanghai: door-to-door pet feeding. Let's take a look at the details.

A month before the Spring Festival, Hema quietly launched a new special service in Shanghai - home feeding of pets during the Spring Festival, 98 yuan per time. Ebrun Power learned that this service was very popular, and the number of orders for Hema pet home feeding increased nearly 4 times compared to normal days; in addition, from February 6 to February 16, the appointments for feeding in some areas were full.

Pet services are the third largest life service business that Hema is focusing on exploring after home cleaning/home appliance cleaning and clothing/shoes and bags cleaning, including bathing, grooming, shaving, teeth cleaning, dog walking, companionship and door-to-door feeding for cats and dogs. "In August 2023, the pilot project started in Shanghai, and the orders have increased more than 7 times in 5 months," Hu Longjun, head of Hema's life services, told Yibang Power.

At first glance, this seems to be a story of Hema breaking into a new industry, but this is not the case. The above orders were completed by Hema and Unigo, and are clearly marked on the product details page. Unigo (Shanghai Aiyu Pet Technology Service Co., Ltd.) was established in June 2022. It entered the market with door-to-door pet grooming and cleaning services, and then supplemented the door-to-door feeding and walking services. Later, it became famous in the industry through marketing on Xiaohongshu and Douyin.

Door-to-door service for pets is becoming a hot business. In addition to Unigo, similar platforms include Aiwopai (founded in 2015), Maoxiang (2019), Pudding (2022), Heyta GO (2022), Mengchong at Home (2020) and Miaoyuwang (August 2023), most of which have been established for less than three years. In addition to new players, pet food and supplies and chain stores are also expanding door-to-door services, such as Mengta and Pidan.

Recently, Ebrun Power has communicated with pet door-to-door service platforms, pet stores, consumers and other parties to sort out the ideas and perspectives for observing the pet service industry. As the Year of the Dragon is approaching, it is not only the logic and trend behind the hot business, but also a guide for consumers when choosing services.

1. The Spring Festival is the peak season for home pet services, with orders during this period accounting for about 60% of the annual total. This not only tests the service carrying capacity of suppliers, but also poses risks to the continued growth of the business. Therefore, it often becomes an obstacle to financing for startups.

2. In terms of business volume, the demand for cats is much greater than that for dogs, but the demand for dog grooming and washing is growing faster; in terms of practitioners, the threshold for door-to-door feeding is low, and most of them are part-time, while there are certain thresholds for washing, grooming, and medical treatment, and most of them are the platform's own employees and professionals.

3. Unlike North America and Europe, door-to-door pet services are still a "small but beautiful" business in China, characterized by low frequency of demand, difficulty in standardizing services, and uneven professional quality of service personnel.

1. Home visits cost between 50 and 100 yuan each time, which is more flexible and cheaper than foster care.

Every Spring Festival, when Wang Xiao returns to his hometown from Beijing, he would leave his beloved dog Liangpi at a pet store and leave his beloved cat Liangmian at home, on the grounds that the latter could stay at home alone. If he returns home for 7 days, the dog would have to be fostered for 7 days, at a cost of about 80 yuan per day. Fortunately, "Fangshan (Beijing) is relatively cheap."

Cats and dogs are two of the most popular pets, but their habits are very different. Cats are sensitive and shy by nature, and changes in the environment can easily cause stress reactions (fur rash, vomiting, diarrhea, shortness of breath, etc.), so they are not suitable for foster care; owners who have the conditions usually book door-to-door feeding, combing, medication and playtime services for their cats. Dogs are different. They need to be taken out for a walk frequently, and owners can either choose to drive the dog with them or send it to foster care.

The order data of Aiwopai also illustrates this point. "When it was first established (in 2015), the ratio of cat and dog services on the platform was about 10:1, but now it has become 15:1, and the number of orders for home feeding of cats far exceeds that for feeding dogs," Aiwopai founder Yang Zhichun told Yibang Power.

For pet owners, "home feeding" is also a more cost-effective option. Taking the price of pet care provided by Aiwopai as an example, home feeding of cats in Beijing is 80 yuan per time, and home walking of dogs is 100 yuan per time. The prices of home feeding of cats and dog walking in Shanghai and Hangzhou are 60 yuan per time and 80 yuan per time respectively, and increase by 20 yuan per time during holidays. The price of home feeding by pet caregivers in Maoxiang during the Spring Festival is mostly 50 to 100 yuan per time, and the price is set by the pet caregivers based on their own experience.

In addition to basic door-to-door feeding and dog walking, the platform also provides value-added services such as bathing, shaving, deworming, playing with dogs, and eye drops. Most of these items are charged separately, and users can choose them by themselves.

Yibang Power searched for the boarding prices in Beijing on platforms such as Meituan, Douyin and Taobao. The prices range from tens to hundreds of yuan, depending on the size of the cat or dog, the boarding location and the service. For example, in Beijing Wangjing, a cat or dog weighing less than 8 kg costs 245 yuan per day in a luxury single room; near Chaoyang Joy City, a pet store boarded small dogs and cats for 490 yuan for 5 days.

Beijing is not the only city where pets are popular. "We usually charge according to the size of the cage (corresponding to the weight of the pet, cats are mostly suitable for small cages, dogs are suitable for medium and large cages). The daily price is 50 yuan/day for a small cage, 70 yuan/day for a medium cage, and 90 yuan/day for a large cage. The price will be higher during holidays." A pet shop owner in Wuhan said, "There are only a dozen foster care places in the shop, and they are almost all booked by the beginning of the twelfth lunar month."

A staff member of a pet home feeding agency in Guangzhou said that they have been receiving reservation orders for the Spring Festival since October 2023. This year, they expect to receive more than 1,000 orders, which is more than in previous years. Many pet home service platforms such as Maoxiang, Unigo, and Pudding have opened reservations for Spring Festival feeding services as early as early January, and are currently taking reservations.

Who is consuming this new service behind the impressive performance? Take the portrait of Hema Fresh's pet service consumers as an example. Since the stores are mainly located in first- and second-tier cities, the proportion of Hema Fresh pet owners is slightly higher than the national average, close to 30%. Hu Longjun said: "There are basically three types of Hema Fresh users who keep pets, namely single people keeping pets, small families keeping pets, and elderly people keeping pets for companionship. At present, the core user groups of Hema's pet service are mainly concentrated in the first two categories."

"Home service can be chosen every two or three days, while foster care requires payment every day. Overall, home service is half the price," a pet owner told Yibang Power. For this reason, cheaper and more flexible home service is becoming more and more popular.

"Before the epidemic, the annual order volume of the Aiwopai platform was growing at a rate of 300%, and is now recovering rapidly. Basically, all orders are generated during the National Day and Spring Festival. Every year, Spring Festival orders account for more than 60% of the annual order volume." Yang Zhichun said.

The pet industry can be roughly divided into pet products and food and pet services, and door-to-door service is only a small category of pet services. Some industry insiders predict that this is still a small but beautiful business, "Pet custody (foster care + door-to-door feeding), plus basic services such as pet bathing and grooming, the total cumulative scale is about 10 billion yuan."

2. Home-based feeding and nursing is the mainstream, and the efficiency of supply and demand matching is the key point of competition

Browsing the service booking page, it can be seen that pet door-to-door services can be roughly divided into three categories, namely door-to-door feeding (feeding, walking the dog, playing with the pet, etc.), door-to-door cleaning and beauty (bathing, beauty, shaving, trimming nails, combing hair, brushing teeth, etc.), and door-to-door medical treatment (vaccinations, deworming, physical examinations, etc.). The professionalism and difficulty of the services increase in sequence.

Most platforms start from businesses with relatively low barriers to entry. For example, Aiwopai and Maoxiang have opened up the national market with door-to-door feeding services. The former’s official account has accumulated more than 100,000 followers and more than 5,000 registered pet caregivers, while the latter has provided door-to-door services for more than 80,000 times. When Unigo was first established, it focused on pet bathing and grooming services in Shanghai, and has now accumulated a certain user base.

The platform's profit sources include commissions and service fees. The price of Aiwopai is set uniformly by the platform (pet caregivers will be allowed to set their own prices later). For each door-to-door service order completed by the pet caregiver, the platform will charge a 30% commission, and there are no other fees. On the Maoxiang platform, pet caregivers set their own prices based on their own experience and professional level. The platform does not charge commissions, but pet caregivers need to pay a deposit of 500 yuan (490 yuan can be refunded if the account is cancelled) and a certification service fee of 99 yuan (non-refundable). If they want to get a better user search recommendation ranking, they need to pay a certain advertising fee to the platform.

In terms of business types, home feeding has a low threshold but a large demand, while home cleaning and medical care have a small demand but a certain professional threshold. Such business characteristics lead to different business models:

Enterprises that mainly provide door-to-door feeding services use the Internet platform to match scattered user needs with part-time pet caregivers (ordinary users with pet-raising experience can start work after platform training). The model is similar to Didi, Uber, and food delivery crowdsourcing, and the business covers many cities;

Companies that mainly provide door-to-door cleaning and care services will hire full-time cleaners and beauticians and focus on expanding business in core cities.

At present, the mainstream business of pet door-to-door service platforms is "door-to-door feeding". If the platform wants to do well in this business, the efficiency of supply and demand matching is its key competitive point. The more users who have door-to-door feeding needs, the more pet caregivers can provide services, the larger the order capacity that the platform can carry, and the stronger its competitiveness will be.

Yibang Power has observed that there are currently two modes for booking home pet services. One is that the user initiates the demand and the platform system directly assigns the order. This method is more efficient and has more advantages when the order volume bursts. The other is that the user selects a pet sitter online and designates service personnel to provide door-to-door feeding based on the experience and price of different pet sitters. This method is more personalized and suitable for daily order needs.

At present, platforms such as Aiwopai, Unigo, Pudding, and Mengchong at Home mainly use a system-based dispatching service, supplemented by designated pet sitter; while Maoxiang and Jupiter Cat (which have ceased operations) mainly rely on self-selection of pet sitter.

In order to meet the peak season of the Spring Festival, this year Aiwopai has increased the system bandwidth and upgraded the system dispatching algorithm allocation logic - it can accommodate 10,000 orders at the same time (calculated based on 5 door-to-door service visits per order, 10,000 orders correspond to 50,000 door-to-door service visits). "We plan to open up the selection mode later, and adopt both the dispatching and selection modes." Yang Zhichun said that in order to take into account user personalization and the peak demand for holiday orders, the system settings also have the same considerations.

Pidancare, a door-to-door feeding service under Pidan, was accused by a large number of users in 2019 of untimely and poor service quality. For example, staff failed to feed cats on time, resulting in pets at home being without food and water for more than 24 hours; or staff could not distinguish between cat litter and cat food and mistakenly fed cats with cat litter soaked in water.

The cause of this negative incident is that there are too many orders but insufficient fulfillment capacity, and there is a gap between the efficiency of the system dispatching orders (route planning) and demand. "There is a shortage of staff, and we are already overwhelmed and can't cope with it anymore." Participants in the incident said on social media, "Even if we receive an order, the route is not properly planned. One person's order can go around Shanghai, which greatly wastes time costs."

3. Shanghai people are most willing to spend money on pets. Whether this popularity can continue depends on three major trends.

Among the seven home pet service platforms surveyed by Yibang Power, more than half of them are registered in Shanghai or their first service cities are in Shanghai.

This shows that there are more pet-owning families in Shanghai, a first-tier city, and the demand for door-to-door pet services is greater. Of course, Shanghai people are more willing to pay for their pets. "For example, with a salary of 10,000 yuan, Shanghai consumers are willing to spend 2,000 yuan on their pets and treat them as their own children, while Beijing consumers may be willing to spend 1,000 yuan, Shenzhen 800 yuan, and Guangzhou 500 yuan," said Yang Zhichun.

This also indirectly shows that pet door-to-door services are currently concentrated in first-tier cities, and the frequency and price of services are limited. For example, 80% of orders for door-to-door feeding are concentrated during the two super-long holidays of Spring Festival and National Day. "This means that most of the time throughout the year, there are not enough orders, so the entire industry is a part-time model (for service personnel), and full-time pet owners simply cannot afford it." A pet industry entrepreneur told Yibang Power.

The penetration rate of pet ownership in American households is 70%, in Europe it is 46%, and in China it is only 22%. "Dog walking at home is a daily demand abroad, not just during long holidays," said Yang Zhichun, so many investors do not like this seemingly hot business, "they would rather have a smaller difference between the peaks and troughs of business throughout the year."

In addition to the low frequency, the difficulty in standardizing services is also a problem that plagues all platforms. Most door-to-door service personnel are part-time, and it is difficult for the platform to supervise the quality of service. How to use technical means to ensure that feeding, walking the dog and other aspects meet the platform standards are all areas where the industry can optimize and upgrade.

Another major controversy is whether the service should prioritize satisfying pet owners or making pets more comfortable. For example, live streaming allows owners to see the staff's door-to-door service process, which can make owners feel more assured and at ease, but it also interferes with the staff's service process to a certain extent, which may cause pets to feel uncomfortable.

Although the road ahead is long and arduous, the pet service business has already gained favor among investors in the international market (currently, no pet door-to-door service platform in China has received large amounts of financing/listed).

Taking the US market as an example, the top three pet service platforms are Rover, DogVacay and Wag. Rover and DogVacay are similar to the pet version of Airbnb. Their main service is to match pet boarding transactions. When the owner needs to go out for something, he can screen suitable boarders on the platform. With the business models of the two companies basically the same, in 2017, Rover acquired DogVacay in full; in 2021, Rover was listed on the Nasdaq in the United States; in December 2023, Blackstone Group, the largest listed investment management company in the United States, announced the acquisition of Rover, with a valuation of up to US$2.3 billion.

Family-style foster care has also appeared in the domestic market before, such as "Puppy at Home" established in 2014. It is a C2C pet foster care platform more like Airbnb. Pet owners with foster care needs choose foster families based on the LBS positioning system according to indicators such as distance, price and foster care services, and complete reservations on the platform. This project has completed three rounds of financing in the three years since its establishment, with a total of more than 10 million yuan, and investors include Nut Capital and Shangshi Capital.

But around 2020, all companies related to Puppy at Home were deregistered. Industry insiders analyzed that family-style foster care did not work in China because pet services were too commercialized. The dilemma faced by Puppy at Home at the time was that some people specially converted their homes into kennels, with dozens of cat cages and kennels arranged in one room, exposing risks such as pet stress and cross-infection, and the service quality and reputation declined rapidly.

"Foreigners are willing to accept pet foster care not only for the purpose of making money, but also because families have more space for activities and pet foster care carries fewer health risks," the person told Yibang Power.

Unlike the first two, Wag is similar to the pet version of Uber, and most pet service platforms in China adopt this model. Wag will conduct background checks on pet caregivers in advance, complete screening and professional certification, and when users place orders, the platform will assign orders to pet caregivers. In 2015, Wag received $2.4 million in seed round financing, and in 2017 announced $4 million in Series A financing and $15 million in Series B financing. In 2019, SoftBank Vision Fund invested $300 million.

Turning our attention back to the domestic market, the entry of Hema this time has attracted more attention to the pet door-to-door service track. Since 2020, platform-based companies with door-to-door feeding and door-to-door cleaning as their main business have sprung up like mushrooms after a rain, gradually presenting a "small but beautiful" market. In the future, whether these pet door-to-door services can overcome the problems of low frequency and standardization, and whether they can solve the dilemma of uneven service personnel, will become the key to sustainable development.

Author: Liao Zilin WeChat public account: Yibang Power