S. Korean government aims to fuel boom in pet industry exports

Pet supplies are on display at a mart in Seoul. [Photo by Han Joo-hyung]

In response to the rapid increase in pet ownership and related consumption on pet food and pet-related goods and services, the South Korean government has announced its commitment to foster the pet industry and significantly expand exports in this sector.

According to government data, the number of households raising pets in South Korea has surged to 6.02 million as of last year, up 65.4 percent from 2012. The population of dogs and cats raised in households has also risen by 43.7 percent to 7.99 million during the same period.

“We will actively promote the pet-related industries to provide tailored products and services for a variety of pets at reasonable prices, while creating new markets to contribute to boosting domestic consumption and expanding exports,” said Deputy Prime Minister and Minister of Economy and Finance, Choo Kyung-ho, on Wednesday.

Under a plan, the government will focus on improving healthcare access for pets. It plans to exempt the value-added tax (VAT) on healthcare fees for over 100 medical interventions related to pets and enhance transparency in treatment costs. Notably, the list of medical procedures that must obligatorily disclose their fees will be expanded. Currently, animal clinics with two or more veterinarians are required to disclose fees for procedures including examination and hospitalization, X-rays, blood tests, and vaccinations. From next year onwards, single-veterinarian animal clinics will also be required to disclose their fees. The government’s plan includes increasing the number of procedures for which hospitals must disclose fees to over 20 starting next year.

The government is set to unveil a comprehensive plan in October of this year to specialize and improve veterinary services for pets, aiming to further develop the pet healthcare sector.

To stimulate the growth of the local pet industry, the government will also increase investments in pet insurance, pet food, and pet technology. Currently, the pet insurance adoption rate for dogs and cats stands at a mere 0.89 percent. To raise this rate, the government plans to develop pet insurance tailored to the developmental stages and characteristics of pets. Additionally, insurance products will be allowed to be sold directly in animal hospitals, and the process for claiming insurance benefits will be simplified.

With an eye on exports, the government has set a new target to achieve $500 million in pet food exports by 2027. Given that pet food holds a 32.8 percent market share in the global pet-related industry as of last year, this field is significant. In the coming year, the government will establish specialized regulations concerning classification, labeling, and nutrition for pet food. Moreover, the safety assessment and registration process for ingredients will be expanded to facilitate the development of new products.

In a bid to promote advanced technologies in the pet tech sector, the government has designated it as a sector within the realm of advanced agricultural and food technology. Starting next year, companies in this sector will be eligible for a support fund of 280 million won (approximately $236,000) per company. To further encourage participation from veterinary professionals and other experts in the development of products by startups, the government will also enhance the stock option system in the latter half of this year.

The government will also designate the pet tech sector, which combines advanced technologies such as AI and biotechnology, as an agri-food high-tech sector to support 280 million won per company from next year.

Next year, a specialized fund of 10 billion won will be established, alongside support for research and development (R&D) and investments in medium- and long-term projects. The government aims to increase the number of pet-related companies valued at over 100 billion won from 7 in 2022 to 15 by 2027.

With a vision to elevate pet-related companies into key players in the export industry, the government is exploring various strategies. South Korea’s pet food exports surged from $13 million in 2016 to $149 million last year. However, the increase in imports resulted in a deficit of $198 million in the same period. The government plans to expand export vouchers within the year and establish a collaborative framework among relevant departments to support exports.