There is extreme nonchalance in the fact that COVID was the top word of 2020. In this series of COVID — so what?, I will attempt at dousing the overused P — word, with some different perspectives through the economic lens.
Speaking of positivity, let’s talk about dogs. Even prior to 2020, India was among the fastest growing pet care markets in the world with around 2 crore pet dogs, now that number is estimated to reach 3.1 crores by 2023. Among the barking, dawned the devil which forced all governments to impose a lockdown on the hyper-social 21st century individuals — frantic to make things better people went out and got themselves furry friends. Talking about positive unintended consequences such as this, the world saw an unprecedented hike in the demand for pets across the world.
Note that owning a pet can cost anywhere from Rs.80,000 to Rs.1,20,000 a year on an average (this is excluding the initial expenses ranging anywhere from Rs.40,000 to Rs.70,000). Amidst the high inflation, higher unemployment rates and lower incomes, people still chose to become pet owners. This in turn led to the boom in industries such as pet food, pet pharmaceuticals, grooming, toys and accessories. Last month, one of my relatives based out of Delhi decided to become a pet parent and thus began the long haul of finding a pet. This got me thinking about what was happening on the supply side to meet the soaring demand.
- Adoption: With the rise of awareness of malpractices of breeding, there has been a spike in adoption. Around 6 lakh puppies were adopted before the pandemic, the same has shot up by 50% to 100%.
- Breeding: The Dog Breeding, Marketing and Sale Rules have been formulated under Section 38 of the Prevention of Cruelty to Animals Act, 1960 which makes it compulsory for anyone wishing to sell or trade animals, to be registered. Most of the sellers are not registered which leads the sellers and breeders to get away with unethical practices. The times have only worsened the situation.
- Returning and surrendering dogs: Several dogs became homeless after their owners succumbed to COVID or were in financial distress. Such dogs also were adopted by other people during the pandemic.
The Pet industry is highly unregulated and volatile. This is a classic case of Information Assymetry: A Market failure that exists for products (in this case pets) which have characteristics that are costly to determine.
It is extremely difficult to determine the health and needs of the pet without professional guidance — both in case of adoption and buying, which in turn makes the decision making for first time pet owners extremely difficult (market for lemons). There is a need for a regulatory body with stricter regulation and an intermediary body to ascertain the state of pets to expediate adoption processes and humanize breeding.
All pets deserve their dream homes and families, we are still a long way from there!