Why does Hou Yi want All in the new retail of pet food?

Wen| Retail Krypton Planet Nicole

On February 22, the first store of Pet Fresh, a new pet food retail brand launched by Hou Yi for the third time, opened in Shanghai. “Retail Krypton Planet” interviewed Hou Yi immediately and visited the new store.

Source: Retail Krypton Planet

Early on the opening day, a large group of pet industry people, investors, partners and media celebrities, as well as nearby pet owners, flocked to the 200-square-meter new store in this community. The air was filled with the meat smell of freshly made pet food, and all kinds of fashionable and cute cats and dogs also came to check in, making it very lively.

Not surprisingly, this store will be a new species that has been frequently discussed and visited for a long time.

The day before, at the Paite Xiansheng Brand Launch and Strategic Partner Conference, Hou Yi revealed that Paite Xiansheng will enter this track with the comprehensive channel strategy of discount + new retail + Live streaming eCommerce +B2C+B2B.

The layout of the first store is roughly divided into three areas: refrigerated and frozen raw meat and fresh food cabinets and freshly made bars, self-branded and branded pet foods and discount snacks areas, and outdoor resting interactive areas.

In addition to Live streaming eCommerce, 30-minute homestay, B2C e-commerce and other channels, as well as derivative offline pet social exploration, from the perspective of stores alone, there are affordable pet snack discount stores + popular in-house pet food stalls, a variety of cold fresh pet foods and new small cake products, Paite Xiansheng, attempts to provide offline commerce with a new pet food complex format.

After leaving Hema Xiansheng in March 2024, Hou Yi also founded the seafood restaurant chain tavern Jinxiao Moment, which has now been handed over to his partners and devoted himself to the new pet retail.

01 New retail of cross-border pet food

The Paite Fresh Life Project has been implemented very quickly.

On September 1 last year, Pat Xiansheng’s founding team launched research and went to Japan, the United States, and Thailand to participate in the Global Pet Exhibition and inspect the head factory in China. On November 11, an office was established, store models were built, and private brand products were made. The first store was opened on February 22, which has been less than half a year since.

Hou Yi, founder of Paite Xiansheng

From the perspective of people in the pet industry, Pat Xiansheng is a newcomer, but its unique and biggest advantage is that it reuses Hou Yi’s many years of fresh retail resources and capabilities, and its team integrates new retail, products and supplies online and offline. Accumulated experience in the field of supply chains has become the most dazzling stepping stone for cross-border entry.

“The new things it brings are worth looking forward to, an executive of a listed pet food company told Retail Krypton Planet.

In his view, Hou Yi has a natural optimism, combined with his extreme self-confidence and super business acumen recognized by many people, which gives him enough energy to drive more connections and resources.

“It is obvious that many new cross-border forces have recently arrived in the pet industry. For example, under the leadership of Hou Yi, Liu Huiping, founder of Babi steamed buns, began to ponder the formula of dog steamed buns, and his company also joined the supplier team of Paite Xiansheng. The shelves and business philosophy of Paite Xiansheng Pet Snack Discount Store stem from Mingming’s busy life and the direct support of its founder Yan Zhou.

Since its first store, the proportion of Paite Fresh Raw Private Brand (PB) has now exceeded 50%. This means that since its establishment, well-known manufacturers have cooperated with them, including pet foods and cat litter factory partners such as Fubei Pet Food, Paisen Pet, Zhongyu Pet Food, Mingyue Anxin, and Pet Love, which are the top brands in the pet industry.

The rich resources, vision and cognition brought by cross-border, the ability to learn and integrate resources, and the sense of speed of Internet DNA iteration while running, gave Pat Xiansheng a different chassis and distinctive label when he made his appearance.

02 Four tags of cross-border barbarians in the pet food industry

Tag 1: Overcoming the ambition of traditional e-commerce.

Hou Yi found that in terms of industry opportunities, domestic pet food offline channels are currently very weak, with 70%-80% online, but the traffic cost is already very expensive.

Source: Retail Krypton Planet

This means that e-commerce’s discount store format with low gross profit margins has far lower operating costs, and its commodity prices can be better than e-commerce, making it price competitive. In terms of the weak online experiences such as fresh food production and sales and pet social networking, offline has obvious differentiated competitiveness.

As soon as he entered the market, Paite Xiansheng regarded winning its position in the mainstream pet food market as its future development goal.

Label 2: Consolidate the discount format.

Hou Yi believes that there are huge structural opportunities in the domestic pet retail market, and there is also a lot of room for innovation in the supply capacity of pet products.

“A friend dealer sold 100 grams of product for 24 yuan, and sold it for 16 yuan at half price for members. We only sold it for 5 yuan for 100 grams of the same quality.& rdquo; In Hou Yi’s view, the high pricing of pets (products) in the domestic market limits the development space of this market.

“Getting prices to truly return to prices acceptable to consumers is the key to today’s pet food retail market. rdquo;

Source: Retail Krypton Planet

Paite Xiansheng adopts a discount business format, with low prices every day and hot products every day. This is our main long-term competitive strategy. We do not do any promotions and provide consumers with cost-effective pet food.& rdquo;

In the store, a box of Sebao Sheba Golden Tins Series chicken breast salmon 85g, priced at 6.6 yuan. On an e-commerce platform, starting from 6 boxes, equivalent to 9.8 yuan/box. A pet shop owner believes that the price competitiveness of Pat Fresh Raw makes it difficult to sell pet food in his store, so he can only serve the business well.

Private brand goods are the key to upgrading discount stores from price war tools to core competitiveness. It is not only a support for low-price strategies, but also a core ability to build differentiation, user stickiness and long-term profitability.

In the view of some industry insiders, if Pat Xiansheng can achieve price disruption + experience innovation through its own brand, it may become a breaker at the pet food track.

Tag 3: Cross-border barbarians who bring new perspectives and new things.

According to Hao Bo, founder of the Pet Industry New Venture Capital Institute, precise nutrition and anthropomorphic feeding are new trends in the pet industry that is growing in the country.

This is the direction that Pat Xiansheng is aiming for. Focusing on pets being family members and love being freshness, Pat Xiansheng’s ambition is to redefine the pet food consumption market, using a product structure dominated by fresh ingredients and fresh flesh and blood, which is differentiated from the past. The market supply of single dry grains and industrial nutritional additives has formed a supply differentiation to meet the needs of pet owners to regard their pets as family members and pay attention to the nutritional freshness and richness of pet foods.

Source: Retail Krypton Planet

Pat Xiansheng explores and launches new products and services that were not available in the pet industry in the past. In addition to retaining traditional products such as dry food, wet food, cat strips, and cans, it has innovated the category of pet food, focusing on fresh food, and launching ready-made and ready-sold, refrigerated fresh food, pasta staple food and baked cakes.

For example, Pat Fresh Frozen Raw Meat Products use HPP high-pressure low-temperature sterilization technology, pasteurized low-temperature sterilization technology and high-pressure extraction technology used in human food to ensure maximum retention of nutrition and delicacy.

Source: Retail Krypton Planet

A pet media believes that the application of high-pressure extraction technology is the first batch in the pet industry, and high-pressure and low-temperature sterilization technology is also the first batch application of new pet retail products. New products can form a first-mover advantage with traditional brands that no one has.

Tag 4: An experienced novice who has a clear development plan as soon as he enters the game.

Since its entry, Pat Xiansheng has a clear brand proposition, product development capabilities, basic online store presentation and rapid replication planning. These compound capabilities are not common in the pet food industry. Of course, to some extent, compared with the human food market, Competition in the pet food retail market is far less intense. rdquo;

Hou Yi revealed that Paite Xiansheng is good at large-scale reproduction of chain stores and will not involve non-standard pet services for the time being.

As of the end of March, Paite Xiansheng plans to open 10 stores in Shanghai, and more than 20 stores are in the process of signing contracts. In 2025, Paite Xiansheng is expected to open 100 stores, completing coverage of Shanghai’s main Urban area.

According to estimates, Paite Xiansheng single store has invested about 500,000 yuan, and the investment will be recovered in about 12-18 months. All 100 stores in Shanghai will be sold directly and will test joining the sinking market in the future.

After polishing Pat Xiansheng’s complete profit model, Hou Yi has greater ambitions to leave Shanghai and even go to sea.

Hou Yi emphasized that up to now, I think it still needs to develop relatively steadily. We must develop at a high speed on the basis of profit, and will not burn money to develop at a high speed like in the past. rdquo;

A pet owner who has owned dogs for many years believes that in addition to price, the primary task of pet food, especially fresh food brands, is to build a sense of trust and make people feel that you are reliable enough. As a result, people can completely entrust the food and drink of pets treated like family members to a new brand.

For the pet industry, from improving the quality of fresh food that emphasizes nutrition to striving to make traditional standards with downward prices, Pat Fresh still needs time to verify its insight and exploration into this market. Its entry will also trigger the collective reflection and actions of existing players in the industry.

In a report in “Pet Industry”, analyzing the catfish effect of this novice in this way, in fact, there are many possibilities to reorganize and build user value and industrial chain value in the current market environment.