UAE’s pet industry thrives as millennials splurge on ‘fur babies’; market expected to surge to $2 billion by 2025
Hotels and private jets for pets make the sector a lucrative investment opportunity
Dubai: A surge in pet ownership, especially after the pandemic, has showcased the immense untapped potential the UAE’s market holds.
Some estimates suggest that pet ownership in the UAE has increased by over 30 per cent since the pandemic, with young singles and seniors particularly embracing pets, predominantly cats and dogs. This has propelled the pet care industry in the country into a market exceeding $360 million, with expectations of reaching $2 billion by 2025.
The country’s millennial ‘pet parents’ are shelling out major cash, too. From pet healthcare and food and services such as grooming, boarding and walking, and even pet hotels, the average pet owner is spending between Dh500 to Dh2,000 per month on their pets.
Amr Hazem, CEO of ThePetShop, said, “This market segment is exceptionally lucrative, and it’s among the few areas that remain underinvested. In the Middle East, the pet industry is growing at a still substantial 25 per cent, surpassing growth rates in Europe, the US, Latin America, and Asia.”
He added, “Furthermore, when we consider pet ownership in households, only 8 per cent of UAE households have cats, and merely 5 per cent have dogs, in contrast to the US where it’s as high as 70 per cent. In that sense, there is immense untapped potential.”
Major investments
The pet care industry has recently attracted significant attention from major investment houses. In November last year, ADQ-backed Aliph Capital, the Middle East’s first female-led private equity firm, completed a 100 per cent acquisition of The PetShop from Kasamar Holdings.
While the investment amount remained undisclosed, it marked the first investment from the Aliph Fund I (LP), in which Abu Dhabi sovereign wealth fund ADQ had invested $125 million, half of its total.
Aliph, which targets medium-sized enterprises, said that the UAE’s pet care market was valued at $361 million in 2020, making it the largest in the Gulf region. Furthermore, it is projected to experience a compound annual growth rate of 9-11 per cent.
Following the investment, Hazem, the founder of Petsville, assumed the role of CEO for The PetShop, overseeing business development and expansion. Since then, The PetShop has seen an 8 per cent increase in revenue and more than a 50 per cent boost in the bottom line compared to last year.
The company is home to 300 employees and has GCC-wide expansion plans with three new stores in UAE, including one in Abu Dhabi set to open later this month. “Regarding GCC-wide expansions, Saudi Arabia and Qatar are our top priority for now,” said Hazem.
Having dedicated a significant part of his career to the FMCG sector, Hazem recognised a promising opportunity in the pet care industry approximately six years ago. This led to the creation of Petsville, a unique ‘hotel for dogs’ concept. Eventually, Aliph Capital acquired Petsville along with The PetShop.
Are pets the new children?
Certainly, yes, says Hazem. “It’s not just about how people care for their pets, it’s about how they share their lives with them. Nowadays, we see numerous requests from people looking for pet-friendly beach experiences, for example,” he added.
Post-pandemic, many single individuals relocated to the UAE.
“And while finding homes for dogs has historically been a challenge, not just in the UAE but worldwide, during COVID, shelters were empty. Everyone was searching for a canine companion. What’s fascinating is that once people adopt a dog during this time, many return six months later, looking for another one. They want a companion for their companion,” he added.
Hazem believes that the changing mindsets towards pet ownership in the region, especially Saudi Arabia, make the sector an extremely lucrative investment opportunity.
He explained, “We’ve witnessed a significant trend in what I would call the ‘humanisation’ of pets. Nowadays, people see their pets as integral family members, similar to children. This shift in perspective is influencing spending habits.”
Pet owners increasingly seek premium products while still mindful of value for money. “Innovation is a key driver here. By innovation, I mean introducing services like daycare and boarding centres. Some daycare facilities even organise special events like Halloween parties, end-of-the-year celebrations, and back-to-school gatherings for their pets,” explained Hazem.
Quality over quantity
There are multiple factors propelling this industry forward. “Innovation plays a crucial role, and we anticipate even more innovative solutions entering the market,” said Hazem.
Convenience is another significant driver; online shopping has become the norm, and consumers actively seek high-quality products.
“For instance, I recently encountered a customer in the store looking for raw food for her pets. She had carefully researched the benefits of raw food, and that’s impressive because transitioning to raw food is a big decision. She was diligently investigating what constitutes balanced pet nutrition and why the switch is suitable, as it’s not a one-size-fits-all solution,” explained Hazem.
For instance, My Second Home is set to unveil a lavish 46,000 sq. ft resort exclusively catering to small dogs as part of its $10 million expansion plan. On another note, the UK-based charter firm K9Jets has introduced a $9,925 service catering to travellers on the Dubai-London route who wish to travel with their pets.
Hazem is hopeful that by 2030, the UAE could become a significant hub for pet food manufacturing. “We’re making progress when comparing the Middle East to more mature markets like the United States. The market here in the GCC is somewhat fragmented, whereas, in Europe and the US, there’s been a lot of consolidation with industry giants emerging. We aim to achieve sustainable, profitable growth,” he added.