Amazon and Pfizer Fuel Ever-Growing Frenzy in the Market for Pet Supplies

7/8/11Follow @arleneweintraub

As much as I hate clichés, I can’t resist using them to describe what’s been going on lately in the pet-products business. So here goes: It’s raining cats and dogs online, as Amazon’s Quidsi launches Wag.com and PetFlow.com brings in a round of funding. The fur is flying on Wall Street with news that Pfizer may shed its multibillion-dollar animal health business. And Say Media is purring over pet owners with its acquisition of the Dogster and Catster social-networking sites.

Okay, enough of that. Let’s get serious and face up to the fact that pets make for a market worth panting over (couldn’t resist one more)—both online and off. According to the American Pet Products Association, which surveys pet owners, we will spend a staggering $50 billion on our furry, feathered, and finned friends this year. And Forrester Research estimates that the online market for pet products will grow from $2.1 billion in 2010 to $3.7 billion in 2014.

Here are some more details on the pet-related news items that have recently caught Xconomy’s attention. Have I missed any? If so, please weigh in below.


On July 6, Jersey City, NJ-based Quidsi—which was bought by Amazon (NASDAQ: AMZN) in November for $500 million—debuted Wag.com, a site offering 10,000 products for Fluffy and Fido (and my dog, Molly, pictured above). Despite Amazon’s failed attempt to crack the market in the early 2000s by investing in the doomed Pets.com, Quidsi’s execs are confident they can succeed in today’s online market for pet supplies. Part of the secret, they say, is a super-efficient distribution system that they’ve perfected with their other e-commerce sites, Diapers.com, Soap.com, and BeautyBar.com.



Also on July 6, New York-based PetFlow.com revealed that it raised $10 million in a funding round led by Lightspeed Venture Partners. The company, which launched its site in 2010, raised $5 million in an earlier round, and hopes to stand out from the crowd by offering such features as automatic delivery of pet food.



Pharmaceutical giant Pfizer (NYSE: PFE) has been vowing to refocus its efforts on the high-margin biopharmaceutical market, and on July 7, it gave investors a taste of how it might do that. The New York-based company said it would explore options for its nutritional business and its animal-health unit, the latter of which makes a range of products for dogs, cats, and livestock. Those options might include selling or spinning off the businesses. Pfizer Animal Health brings in $3.6 billion in sales a year and could be a tasty acquisition target. But investors seemed unsure about the decision, pushing Pfizer’s shares down 2 percent to $20.33 in morning trading.



In April, San Francisco-based Say Media bought Dogster—which owns the Dogster and Catster social media sites for pet owners—for an undisclosed sum. Say Media’s executives say the sites fit its rapidly growing portfolio of properties that attract active and engaged audiences.

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