Lending a paw

How European firms are supporting Japan’s booming pet market

SEPTEMBER 2021 Feature / Text by Gavin Blair

When people speak about Japan’s declining birth rate, it’s sometimes pointed out that there are now more pets than children in Japan. But, in reality, that is true of many countries, including France and England. Nevertheless, the Japanese pet market is a large one, with more than 9.6 million cats and nearly 8.5 million dogs, along with a host of other companion animals. The total value of the market is forecast to reach ¥1.7 trillion ($15.4 billion) next year.

Peculiarities of the pet sector in Japan include a preference for smaller animals due to the space constraints of the average home, as well as restrictions on the size of animals that can be kept in some apartments. Because of the large senior population, elderly ownership is more widespread. Animals themselves also live longer due to high standards of care and a reluctance to have pets put down, even when they suffer from serious illnesses.

The pet food market alone was worth ¥314 billion ($2.9 billion) in 2019, with spending on the rise. While the number of pet cats and dogs had been falling slightly in recent years, there is anecdotal evidence that the pandemic may have led to an uptick in ownership, as some people have sought to compensate for the decline in human interaction with companionship from pets.

There also appears to be a trend of owners lavishing their animals with premium food and other treats, as well as more veterinary care and grooming, due to being at home more.

Annual average spending on dogs jumped 13.1% last year to ¥347,104, around double the amount spent on cats, which grew by a more modest 4%, according to a survey by Japanese pet insurance provider Anicom. The biggest increase was in vets’ fees to treat injuries and illness, which leapt around a third last year for both cats and dogs, to an annual average of around ¥32,000 and ¥60,000, respectively.

PET POLICIES

Many European firms are contributing to the health, well-being, and appearance of Japan’s pets. They are also bringing peace of mind to their owners.

Although the proportion of insured pets in Japan is significantly below the rate in many European countries, it is on the rise and is forecast to continue growing at a healthy pace in the coming years.

Policies for pets account for a relatively small part of French insurance giant AXA’s business in Japan, but it provides a range of coverage choices.

“AXA offers two pet insurance policies: Plan 70, which pays out 70% of medical treatment costs, including vet fees and surgeries, up to ¥700,000 for pets up to 10 years of age; and Plan 50, which reimburses 50% of such expenses up to ¥500,000 for animals of all ages,” says an AXA spokesperson.

There are additional options that owners can buy, including a Liability Risk Coverage Special Clause that provides out-of-court settlement negotiations.

“If an insured pet bites a person or destroys another person’s property, and the insured is legally liable for damages, the policy will cover up to ¥10 million per accident,” explains the spokesperson.

One of the main drivers of insurance coverage is the growing sophistication of medical treatment for animals, with which comes increased costs.

PROVIDING PROTECTION

The pet segment accounts for approximately 70% of the business of Boehringer Ingelheim Animal Health Japan (BIAHJ), with the remainder being for livestock.

“The lives of animals and humans are interconnected in deep and complex ways,” says Michel Korenian, president of BIAHJ. “It is our belief that when animals are healthy, humans are healthier.”

Frontline is a long-established product for the company globally that protects dogs and cats against ticks and fleas. Nexgard is the next generation of Frontline that works specifically for dogs, while Nexgard Spectra, BIAHJ’s biggest seller — and the market leader in Japan — also provides protection against potentially lethal heartworm parasites carried by mosquitoes, according to Korenian.

BIAHJ is also the market leader in cat vaccines against a range of diseases, and it offers prescription products to treat conditions including kidney failure in cats and cardiovascular issues in dogs.

“One of our unique strengths is that Boehringer Ingelheim operates in both human and animal health, so we share knowledge and innovation, and also transfer people between the two fields,” adds Korenian.

Better medical treatment and nutrition for animals have contributed to longer lives for pets, but this trend also potentially increases the need for medical care as older animals tend to suffer more from chronic diseases, explains Korenian.  

PREMIUM PRODUCTS

Nestlé is another European firm that is supporting the health of pets in Japan. It has four main pet food brands here in its Purina range: Mon Petit, Felix, ONE, and Pro Plan, which are formulated according to “science-based nutrition”, says Kensuke Otani, head of marketing for Nestlé’s Purina PetCare division.

The company has noticed a trend of people buying more pets during the pandemic, as evidenced by a rise in sales of food for kittens and puppies, as well as growth in the number of treats products bought by owners wanting to pamper their animals.

According to Otani, Japan is the most advanced market in the trend to humanise pets, with owners treating their animals like members of the family, willing to spend on supplements and premium food, including organic products, a tendency that also helps explain the growing amounts going to healthcare and grooming.

PAMPERING PETS

For those owners who wish to take the pampering of their canines to the next level, Italian fashion brand Diesel used Japan as a test market to launch its Diesel Doggies Collection of pet clothes last year. The premium brand of dog attire ranges from ¥12,000 to ¥22,000.

“It is inspired by the Diesel collection and represents the same level of detail and design as our apparel for people,” says Kosei Takazane, CEO at Diesel Japan. “It also uses the denim that is typical of the Diesel brand.”

Japan is Diesel’s biggest market for its clothing for humans, and the dog line has been well received by customers, according to Takazane, leading the company to plan the launch of a second range this year.

It remains to be seen whether owners who return to their workplaces once the pandemic ends will continue the higher levels of spending on pets, or will cut back and use that money to pamper themselves a little more. •