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Chinese pet products cross-border e-commerce fully enter the US market

Posted:

2019-08-13

The “US priority” policy is bringing further uncertainty to the world and the US economy. American economists predict that if the United States implements the tariff increase on Chinese goods in full, it will lead to a 25% increase in the cost of daily consumption for locals in the United States. American residents might need to tighten their belts in the next few years, but they probably still won’t mistreat their pets as they are animals that need to be “loved,” aren’t they?

In fact, we have seen that Chinese pet products manufacturers are actively pursuing overseas markets in the form of “independent brand + cross-border e-commerce.” Although the pet products of foreign brands still have significant advantages in the overseas market, the Chinese pet industry manufacturers who are not willing to do downstream processing plants are making efforts to  improve the benefits of establishing their brands in foreign markets gradually. Every aspect has a trace of the active operation of Chinese companies overseas, from product development, patent application, quality assurance, packaging design,  marketing to after-sales repair and customer service support. The author believes that due to the elimination of the high-cost tache of American local brand companies, the activeness of Chinese cross-border e-commerce in the US consumer market has positively lowered the price for American consumers; therefore, it has benefited the pets in the United States!

Next, we will review several groups of critical data related to the pet market:

The global pet market has maintained a year-on-year growth of approximately 5%. The United States is the world’s largest and most established pet consumer market. The total expenditure of the pet industry in the United States reached USD 60.28 billion. The economic output value of pets in North America accounted for 37% of the global total, and Europe and Asia accounted for about 23%. In terms of the proportion of family pets, the family pet ownership rate in the United States is 65%, Germany is 36%, and Japan is 28%. According to the American Pet Products Association, in 2018, US pet owners spent USD 72.1 billion on pets and pets’ care and supplies, among them, other than pet food, sales of other products and services were approximate USD$42.1 billion.

According to the survey of pet owners in 2017-2018, 68% of American households have pets, of which family cats and dogs accounted for the most significant proportion, and the number of pet cats and dogs is expected to reach 94.2 million and 89.7 million in the United States, respectively.

“2019 Amazon Consumer Shopping Research Report” stated, the most popular categories for consumers include “electronics, computers, and office supplies” followed by “beauty and health” (14.7%), and “clothing, footwear, jewelry and watches” (14.4%). However, the lowest-ranked categories include food and groceries (3.7%), as well as pet supplies (5%)

With the growth of the millennial generation in the United States decided to extend their age for marriage or even to stay unmarried, the number of pets in the United States is growing slowly and steadily. Market research shows that, in general, dog owners are more likely to buy pet supplies online than cat owners. Pet owners who are married without children are also expected to order pet supplies online. Americans purchase pet supplies online because they are more convenient, affordable, and versatile. At the same time, they can also find discounts and promotions on their own, which is difficult to achieve in physical stores. Market research shows that Europeans value quality, but Americans prefer lower prices.

“Pet Supplies” has a lower ranking on Amazon. However, it has great potential as the Blue Ocean Market at Amazon. Amazon launched the Pet Profile in 2017 due to the stability and potential of the pet market. After click and enter the “Pet Profile” webpage, the user can enter the pet’s name, species or breed, age, and upload photos of the pet, as prompted, thereby helping their pets to establish a pet owner page.

Pet products include food, health, beauty, clothing, and electronic accessories. Pet supplies also have a large seasonal correlation; for example, in terms of clothing, pets clothing is divided into winter and summer wear. In winter, cotton-padded jacket for a dog might be easier to sell, while in summer, life jackets or swimwear are more popular. Also, some Americans love to go out with their pets for outdoor activities, so pet products related to travel or cars are also top-rated.  

The added value of Chinese traditional foreign trade enterprises is generally low. Nowadays, they can take the cross-border e-commerce express train and face the consumers directly, and they will continue to eliminate or improve themselves as they move forward. Enterprises enter the international market with their brands and add a new growth point in line with trade trends while maintaining traditional channels.

Essential languages for customer service in the US market: English and Spanish. Among them, English -speaking consumers in the US consumer market accounted for 82.1%, and Spanish -speaking consumers, accounted for 10.7%. The use rate of pet supplies is relatively high, and the repeat purchase rate is also high. Excellent customer service is of great value to brand promotion.

The essential channels: for customer service in the US market: the official Tollfree 800 phone number of the brand, the official email address of the brand, and the website Live Chat. In particular, it is mentioned that in North America, the popularity of the Tollfree 800 number is still high, unlike Chinese consumers who are enjoying the great convenience brought by the mobile Internet. Americans are still accustomed to dialing 800 numbers and talking to customer service staff over their mobile phones, especially those over the age of 50, who still stay in the way to solve problems using traditional customer service channels. Therefore, in North America, the Tollfree 800 number penetration rate is higher and more popular than the Chinese 400 number. Thus, choosing an 800 number that is easily remembered by consumers can increase the driving force for the brand effectively. In the United States, the connection charge for 800-number is quite cheap, so Chinese cross-border e-commerce must set up its own 800 number for the North American market, and this number can be included in the product specification or on the product. At Callnovo, our native language customer service staff in English and Spanish can provide telephone/online communication/Email outsourcing services for Chinese pet products to cross-border enterprises in fluent local languages. The customer service staff has not only effective language communication skills but also their oral and written skills can seamlessly express the subtleties of American culture when communicating with American consumers. Therefore, cross-border enterprises no longer have to face the challenge of recruiting foreign language talents in China.

The North American market has a customer service channel that is very much in need of attention but easily overlooked by Chinese pet products cross-border e-commerce: SMS. In China, because consumers use WeChat for communication, fewer and fewer users choose to use SMS, but in North America, SMS is still considered an important and fast communication channel. Callnovo can receive product issues and notify the results of each process via SMS. Taking a typical scenario as an example, if a consumer sends a text message and a photo with a certain pet product failure, the customer service will send an instruction photo and with the product troubleshooting method to the consumer via SMS or notify the consumer to send the shipping order number of the replacement product and its processing status to achieve efficient customer service. As SMS can provide consumers with personalized, intimate service experience without occupying the valuable time of the consumer compared with the phone communication,  and the customer service team of the product brand can also use the SMS to win the five-star praise for this purchase on Amazon or eBay platform.

The channels that North American market customer service should not be ignored: Social media such as Facebook, Twitter, Instagram. If cross-border e-commerce brand for a pet has long-term development plans in the US market, it is important to set up social media account such as Facebook, Twitter, and Instagram as early as possible and remain active. Pet products are different from general consumer products, they are more personalized, and pets are the spiritual sustenance of pet owners. Therefore, a richer expression on social media and instant customer service communication can fully mobilize the recognition of the brand by American consumers.

In the first half of 2019, Callnovo signed a contract with a number of Chinese pet brands such as DD Company(Client Real Name is hidden for confidentiality reasons), outsourced and implemented the North American market customer service outsourcing program, and achieved a one-stop outsourcing team for the major pet brands in the US market for 24-hour English and Spanish customer service  successfully and quickly. Currently, the team has steadily entered all-channel stable professional operations such as telephone, email, Facebook/Instagram/Twitter and other overseas social media as well as live chat. Callnovo brings added value to Chinese pet brands in the US market in terms of customer service professionalism, labor cost savings, and customer service quality.

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