|The Courier N° 152 - July - August 1995 - Dossier: NGO's - Country Reports: Belize, Malawi (EC Courier, 1995, 104 p.)|
by Frederick O. Marshth
The idea that 'trade is better than aid' in achieving long-term and sustainable development is widely accepted. One of the big disappointments of the past three decades has been the declining sham of world trade accounted for by developing countries outside Asia. Today, with liberal economics in the ascendant and trade barriers coming down, the issue is even more pressing. Many studies have been undertaken as to why so many developing countries have become marginalised in the global system of commerce, and what might be done to reverse this trend. Problems include identifying market opportunities (and the related issue of acquiring the necessary information! obtaining finance, acquiring entrepreneurial skills, having access to a skilled labour force and ensuring product quality. This article deals with the first of these-spotting export opportunities and finding out more about them. The focus is on the European market for pet accessories-just one example of a huge number of 'niche' markets in the developed world which developing country entrepreneurs might find worthy of investigation. And for those who think that the term 'niche market 'equals ' too small to be of interest' the author, who is a consultantin the field of pet products, provides some striking statistics. Pet products are surprisingly 'big' business' and the sector offers a range of business opportunities covering raw materials, semi-processed materials and finished products.
Not many people realise that 49% of the 132 million households in the EU (the figure prior to the latest enlargement) keep at least one pet. The pet population, excluding fish, totals 136m and includes 35m dogs, 35m cats and 45m cage birds. There are around 20m 'other small animals', a term which encompasses everything from guinea pigs and hamsters to spiders and exotic snakes. Lastly, there are ornamental fish which are kept in aquaria, bowls and garden ponds. These are to be found in at least 9.5 million European households and although it is difficult to arrive at an accurate estimate of the total number of fish kept as pets, the figure is thought to be around 141m.
The amount of money spent by European owners on their pets is well in excess of ECU 9 billion a year. Most of this goes towards food or health care products but 18% of the total (ECU 1.6bn) is spent on pet accessories. In real terms, this market is forecast to grow by more than 3% per year. This article will focus only on accessories for pets, since many of these can be and are sourced in developing countries.
One should be aware that the EU represents around one third of the total world market for pet products. The North American market is roughly the same size while the remaining third is accounted for by countries in the rest of the world, notably Australia, Japan, South America, South Africa, the Middle East and, increasingly, Russia and Eastern Europe.
The range of products defined as pet accessories is very wide-in excess of 5000 individual articles. Pet accessory manufacturers are, therefore, operating in a highly fragmented market and it is not surprising to find that there are many thousands of enterprises involved. The majority of these are quite small-often 'cottage industries'.
Dogs and cats
Collars available in a large range of materials, and in many colour combinations, fall under this heading. For dogs, there are also leads made of leather, chain, rope, nylon or a combination of these materials. Other canine products include car harnesses, muzzles, training equipment, 'chews' (made of knotted rope or buffalo hide) and scoops (for clearing up dog mess!), kennels and wicker baskets. There is even a 'fashion' market for dog coats. Many of these articles could be produced in ACP countries.
For cats, the largest single item is cat litter, around 1 million tonnes of which is sold in Europe every year. The raw materials are either minerals such as attapulgite, sepiolite, gypsum and bentonite or vegetable-based materials such as maize by-products or wood shavings. Other cat accessories include cat beds, litter trays and cat scratchers or scratching poles.
There are also more than one hundred different articles marketed under the heading of grooming accessories- brushes, combs, clippers, grooming tables etc. Again, many of these could offer production opportunities for ACP countries.
Birds and ornamental poultry
In addition to bird cages and aviaries, made from a variety of materials, and available in many different shapes and sizes, there are also fittings such as perches, swings and ladders, usually made of wood. Other accessories include toys, mirrors and feeding and drinking bowls. Further market opportunities exist in the field of accessories for racing doves and pigeons of which there are several million. Pigeon fanciers, who keep the birds for racing, view their activity as a sport and accordingly, these are not usually included under the heading of pets.
In environmentally-conscious Europe, there is considerable interest in wild birds and many people buy nesting boxes and feeding tables for their gardens. Most are made of wood but other materials, including coconut by-products are also used. Another popular accessory in this category is bird baths.
Other small animals and fish
Accessories for the former include cages and 'homes', exercise and play wheels, tunnels, drinking bottles for rodents and bedding material or litter. In the more specialised market for reptile accessories, terrariums and vivariums will usually contain sand and ground bark from particular trees as well as a range of other natural products used in crafted woodscapes and florascapes.
For fish, the market, other than tanks and bowls, ranges from very 'hightech' electrical equipment to basic materials such as gravel, sand, rock and tree roots. The latter are natural products which only require collecting, washing, sorting or grading. Aquarium gravel, for example, is available in many different colours, sizes and grades and the size of the European market for this product is somewhere in the region of 35 000 tonnes a year. Annual sales of marine salt for aquariums exceeds 1500t. A number of firms specialise in the production of crafted replicas of natural fossil. Aquarium plants are another specialised accessory. These are grown on farms in many countries. Singapore exports plants to the value of ECU 8.5 million each year. There is a related niche market for artificial aquarium plants while ornaments, including statuary for ponds (whether or not they contain fish), should not be overlooked.
Finally there are a number of accessories that are adaptable for different pets-toys, beds, feeding and drinking bowls and carriers made out of wicker, wood, metal and plastic.
Diverse product range
Manufacturers in ACP countries should be aware that the pet accessories market covers a diverse range of articles from simple raw materials such as rough rock for aquariums, through semi-processed articles to the finished product such as collars and leads. In short, there is a market for everything in this trade with market niches available in the low, medium and high price ranges.
In Europe, the distribution chain for pet accessories includes a specialist retail sector (pet shops, garden centres, seed merchants etc) as well as the general grocery sector whose outlets in some countries have a significant share of the accessory market. Specialist mail order businesses provide yet another distribution channel. One German firm, for example, publishes a 200 page mail order catalogue containing articles only for dogs. Almost every country has a pet trade press which published monthly magazines read by people working in the trade. In most countries, there is a national pet trade association which brings together manufacturers, distributors and retailers. Some of these also organise trade fairs. Trade fairs and exhibitions specialising in pet products including accessories are held in most European countries. The largest and most important of these is 'Interzoo' which is held biannually in Germany. Almost 600 firms from all over the world exhibit at this event, which attracts more than 18000 trade visitors.
Currently, most of the pet accessories from developing countries marketed in Europe come from Asia. This raises several questions.. Why only from this region? Is it because their producers and exporters are more innovative? After all, many of the raw materials are available in ACP countries. There are clearly manufacturing opportunities here for the ACPs -as long as exporters provide the right product in the right place, at the right time and at the right price. Could it be that nobody, as yet, has recognised the potential of the sector. Many ACPs have the requisite raw materials and labour force. If the necessary finance, management initiative and market information could be added to this, there is no reason why entrepreneurial firms in ACP countries should not succeed in carving out profitable niches in this growing market.