Pet business opportunities surge during the pandemic, with Chewy's quarterly sales reaching $2.04 billion

During the COVID-19 pandemic, millions of Americans adopted new pets. At the same time, the proportion of consumers purchasing pet food online also increased, which led to an increase of US$5 billion in online pet spending in the United States in 2020 compared with the previous year.

Chewy's sales reached $2.04 billion in the first quarter of 2021

The sudden dividend benefited many retailers, but Chewy's performance was the most outstanding. Relevant data showed that in the fourth quarter of fiscal 2020, Chewy's net sales reached US$2.04 billion, a year-on-year increase of 51%. Among them, it is worth noting that the earnings before interest reached US$60.8 million.

Compared with the net sales of US$7.15 billion for the entire fiscal year 2002, Chewy's earnings in the first quarter were very impressive. This also proves from another aspect that consumers' love for pets has not ended with the abatement of the epidemic, and the sales of pet-related products are still impressive.

According to Chewy, the number of households with pets in the United States increased by 5.7% in 2020. This is because many people adopted small animals such as cats and dogs to relieve loneliness during the epidemic lockdown, which gradually expanded Chewy's customer base. Last year, its new active users exceeded 5.7 million, and its stock price soared.

E-commerce penetration rate in the U.S. pet industry rises

Relevant data show that the scale of e-commerce in the United States has been growing at an accelerated pace since 2011, reaching a growth rate of 51.4% in 2017. However, affected by the COVID-19 pandemic in 2020, offline channels have shrunk significantly. At the same time, the scale of e-commerce channels, mainly Amazon and Chewy, grew by 62.3% year-on-year in 2020.

In terms of categories, the online penetration rate of pet products is higher, while that of food is lower. The core reason for this difference is the difference in delivery efficiency caused by the inherent characteristics of different commodities. From Chewy's perspective, its consumables mainly include pet food (cat food, dog food, etc.) with low gross profit margins, while durable products (pet toys) have higher gross profit margins.

Compared to Amazon, which sells all kinds of products, Chewy can provide extremely professional services in the pet category. Looking ahead, e-commerce shopping habits may be difficult to reverse, and the online trend of pet food and supplies in the United States may continue for a long time.

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Quarterly Sales