Paws-Up for PAWDEGA

UAE-based homegrown e-commerce platform for pet products, PAWDEGA recently entered the US market. Here’s a look at their growth story.

The global pet food industry was valued at $140 billion in 2023 and is expected to grow at a CAGR of 5.32% by 2028, estimated Clarkston Consulting. With over one-third of the global revenue coming from the US, it’s a no brainer that the American market is on the radar of many brands offering pet products. Moreover, with holistic health & wellbeing and sustainability emerging as some key trends in the human world as much as the pet universe, brands offering natural, non-toxic and holistic products are seeing traction and expanding their horizon to cater to new markets.

One such UAE-based homegrown e-commerce platform for pet products, PAWDEGA recently entered the US market. Before getting into the growth story, a few words on how this two-person run entity came into being. Four years ago, PAWDEGA was born out of frustration as co-founders Charly & Larry Pruden found it hard to source natural and non-toxic products for their own dog Milka.

“The term ‘natural’ has become a buzzword in today’s pet industry. But most pet stores don’t even know the truth about what ‘natural’ actually means, making the landscape highly unregulated. We started PAWDEGA as a platform with a promise to offer product transparency. Having done in-depth research on what constitutes holistic pet lifestyle and collaborated with globally renowned holistic and integrative veterinarians we are able to offer safe and non-toxic pet products wherein every single ingredient in every single product undergoes an extensive vetting process,” Charly explained. 

PAWDEGA at a Glance

• Year of Launch: 2020
• Funding Status: Self-funded
• Product Portfolio: From stocking 50 safe and natural pet products to over 200 SKUs currently.
• Business Milestones Over the Past 12 Months: 58% revenue growth in 2023 versus 2022. Started worldwide shipping; international orders now account for around 5% of revenues. Expanded and opened a second location in the US towards the beginning of 2024.
• Key Growth Goals for 2024: Grow PAWDEGA in the US. Expand the UAE product range and include freeze-dried dog food. Create more free and reliable content for pet parents, while expanding presence on YouTube.

From the UAE to the US: Major learnings

Over the past decade, the UAE has become home to many more pets offering a fertile ground for the emergence of several pet-related businesses, born in the region and beyond. Consumers in the region are also becoming increasingly aware of what truly is ‘good for pets’ and ‘good for the planet’.

Yet, PAWDEGA decided to foray into the US market which is a major milestone but also quite different from the UAE market. Asked about some of their biggest learnings, Charly and Larry said, “Interestingly, the US played a major role in the opening of our UAE operations. Most of our mentors, holistic veterinarians who we work with, and social media followers are from the US. In fact, last year a majority of our international sales came from US, which reaffirmed our decision to launch PAWDEGA there.”

Despite operational differences between PAWDEGA’s home base the UAE and the US, the co-founders realised that operating their business in the US has worked out cheaper as compared to the UAE.

“In the UAE, customers expect to receive their delivery the same day or the next day, and many customers are not willing to pay AED15 for delivery, which is not even the true cost of our deliveries. Meanwhile, in the US, customers are used to waiting many days for their delivery to arrive (3-8 days on average) and are willing to pay the full price for delivery, which is usually around $10 (AED36.70). Further, our annual business license and related fees in the UAE are around $10,000, while it is a one-time fee of only $200 in the US. Another difference we noticed is that customers in the UAE ask a lot more questions and are used to receiving customer service through instant messaging versus American customers who use e-mail to contact us for mostly delivery-related questions,” the co-founders elaborated.

Navigating roadblocks

Despite considerable growth, PAWDEGA’s journey hasn’t been a cakewalk. The platform has had to navigate unique challenges, and fulfilment tops the list.

“Shipping is probably the biggest unique difference between our two markets of operation. The UAE is a much smaller country compared to the US that works in our favour because we offer customers next working day delivery within their preferred time slot. Moreover, our UAE deliveries are made in cooling trucks allowing us to ship frozen goods to our customers. While in the US, a standard delivery takes around 3-5 working days, and the customer does not know exactly when their package will arrive. There are no cooling truck deliveries, so we’re unable to ship frozen items to our customers in the US.”

Further, in a world where supply chain is prone to disruption as has become amply clear over the past few years, what steps does PAWDEGA undertake to create an agile supply chain?

“This is an area we’re constantly working on to ensure we always have stock for our customers, which is a challenge for any small business. We usually look at our sales history to plan inventory. Then we rely on data for the average amount of time it takes for the manufacturer to fulfil our order and how long it takes to deliver the order to our UAE warehouse. In the UAE, from the date that we place our order to the date when we receive it can be anywhere between two weeks and four months depending on the manufacturer. It becomes more challenging if we don’t have enough data for new products, rendering the growth of our business unpredictable.”

“Having said that, we try to automate our processes as much as possible. Our store runs on Shopify, so we utilise a lot of their integrations to operate more efficiently. The latest exciting addition is using an app called Flow, which automates certain processes for us,” Charly and Larry shared.