The blue ocean strategy that opened global doors for this PH pet care start-up

To Arrian Lim, founder and CEO of Pawdel, his Blue Ocean sounds  simple, looks obvious on the surface, but it has distinguished him from the competition. It also works because it is authentic, and his customers --- all pet lovers like himself – can immediately sense the sincerity in all his messages, marketing, and promotions. Lim treats his pets not as cuddly creatures to be taken care of, but as  part  of his family, no less valuable than its human members. Connecting with pet owners who feel and behave like him was instrumental to the success of his online store, which gained traction, visibility, a following, and sales at a time when other sellers were struggling just to keep afloat. Right now, it is branching out into the international market.

In this Q and A, Lim---who is a certified digital marketer himself---discussed how jumped out of the box of traditional pet marketing and created his own growing niche.

MI: What prompted you to start Pawdel?  Especially in the time of the pandemic and Metro Manila’s quarantine?

LIM: I founded Pawdel at a time when the premiumization of pet care in the Philippines was still in its infancy. Dog accessories were primarily utilitarian. It was considered too niche to be a lucrative business. But I knew where this was heading. It’s no secret that the next generation of pet owners increasingly see themselves as pet parents. It’s not just a regional trend. It’s a global trend.

The pandemic induced what we now call the “Homebody Economy”. Most industries that found themselves still relevant for home consumption not only survived, but also thrived. This meant the pandemic only amplified our relationship with our pets as we spent more time at home with them. It accelerated the growing spending on pet care.

MI:  The way you market and promote Pawdel is different from the way that traditional pet stores are doing it. What’s the differentiator or your blue ocean? Why did you take that approach?

L: The consumer profile is starting to evolve with the rest of the world. Six or seven years ago, dog grooming was considered a luxury. Nowadays, you can find it in almost every neighborhood in Metro Manila. Not to mention that the average grooming rate is much more expensive than the premium barbershops and salons you can find. The same can be said for dog hotels. Many of the forward-thinking establishments now openly welcome our pets. The days of establishments posting “no pets allowed” are numbered.

What does that tell you? Pets are no longer mere animals that you leave out while you enjoy the comfort of life. We pet parents want our dogs and cats to experience our own lifestyle. Salons, hotels, organic personal care products, all-natural food and fashion. But it doesn’t end there. The relationship of people with dogs and cats evolved from pet owners to pet parents, which is a highly personal relationship. Much more personal than your close circle of friends.

That’s where I think we created a whole new category, our Blue Ocean so to speak. We reframed our proposition for our target market from pet owners to pet parents. Our products aren’t just about fashion or utility. Pawdel is a lifestyle to nurture that humanized relationship with a wearable piece of love.

MI: How does your market respond to this particular campaign?  What about the general public?  What breakthroughs did you experience, and what were the right things you did that changed their mindset?

L: Sometimes it’s hard for people to understand why a dog parent would spend more than US$30 on a dog collar especially if they’re not a dog owner. The operative word there is “parent”. So my favorite analogy would be this: we all see parents buying their toddlers very expensive stuff. Some would even resort to buying it from their favorite adult brands and getting a pair of baby sneakers from Jordan brand for example. Others would buy their toddler an expensive piece of jewelry.

Is it practical? No, especially after the toddler’s feet outgrow those sneakers in less than a year. But ask any parent why they do it, and chances are they themselves cannot give you a reasonable answer. But it nevertheless feels extremely good so they do it anyway!

In our first year, I was starting to doubt the outlook of our business. But I had to remind myself that I wasn’t just selling a commodity that will instantly make a sale. I was bootstrapping a whole new concept in a premature pet care market. Did we succeed in introducing this unique new lifestyle to our pets? Yes, but it wasn’t easy and smooth sailing. We had to operate in the red for almost a year. But we’re very happy with our numbers now after two years in the business. Our average order value is over Php 2,200.00 and our monthly gross website revenue is in the 6-digits. Not to mention our wholesale distribution and export trade channels.

MI: What are the challenges that you are still facing?  And how do you respond to them?

L: We’re still a long way to go in fulfilling our brand aspiration despite our breakthrough year in 2020. That is to raise the general public’s perception of pets “from just mere animals” to “our equal companion.”

In spite of being in the top six of the global dog population, the Philippines remains one of the smallest markets in the global pet care industry. Our very low per capita spending in pet care only shows that our pet’s lifestyle still pales in comparison with the rest of the world. So our mission to elevate our pet’s lifestyle remains stronger than ever here in the Philippines. In fact, our aspiration is to raise the Filipino general public’s perception of dogs may be viewed by some to have gone overboard.

But that mentality trickled down to every millimeter of our design process. Little did we realize later on is that we accomplished a quality that is above and beyond the average human accessory.⁠

There were 93,320 newborn puppies registered with the Philippine Canine Club Inc. (PCCI) in 2020. One can only imagine this is just a quarter of puppies born last year, pure-bred or not. So in that context, we barely reached 1% of newborn puppies last year. We can still do more to reach our brand aspiration. But right now I’m very happy with our early adopters. They’re the right segment who can inspire and influence the majority of dog and cat lovers in the Philippines.

MI: What were the values, principles, ideals, and emotions that you were able to connect to in your audience that made this campaign effective?

L: Pawdel’s mission is to nurture the relationship between mankind and their loyal pet companion with a wearable piece of love. That is our company’s North Star.

And so we launched a year-long campaign called Philippines’ Next Top Pawdel. In order for their pets to join, they have to answer in essay-type 20 pre-qualifying questions. The set of questions was strategically designed to uncover real-life pet-human relationship stories. In the beginning, our partners were hesitant that this would dissuade pet parents to join. But it was also strategically designed to engage and entertain them with their own clever answers.

Think of your high school slambook. This was a channel for them to express their unspoken love for their pets. In the end we decided there’s no harm in trying. We were surprised that we’re on track to receive over 2,000 entries for the whole year. Our acquisition cost was only less than Php10. In each month’s iteration, we’re getting more competitive answers and contestants.

We were receiving emails and text messages, thanking us for the opportunity to join. Some were even pleading with us to let them win! These are highly engaged participants who took the time and effort to answer the 20 questions of love. It’s the kind of community that we want to build for Pawdel: a pet parent who will go the extra mile just to manifest that superfluous love.

MI:  You were and are a digital marketing professional. What prompted you to shift into this business?  How are your digital marketing skills helping you in this new field?

L: I always wanted to manage a global brand. My pharma colleague asked me six years ago where I would see myself in 10 years. In a heartbeat, I said "An expat in brand management." But dreams don't always go according to plan, and I never reached that goal in my corporate career. But a leap of faith to entrepreneurship later and some setbacks, and God gave me a brand to create instead.

The underlying motive to that dream may not have been clear to me at the time but it sure is now — to compete against the best of the world using my Filipino talent has always been the dream.

Even after I reskilled myself in the new digital economy, I never gave up on my dream of creating a world-class brand. Pawdel is a business I know I can take globally because the circumstances favored my strength and my passion. Earlier, I was talking about 93,320 newborn puppies. Had it not been for my digital marketing background, that would be nearly impossible and awfully expensive to reach. But technology gave small startups like us a chance to hyper-target relevant audiences. SEO, for example, generates over 30% of our e-commerce revenue, and yet it is free!

Our digital strategy also generates a lot of inbound wholesale trade leads here and overseas. All of our export deals were generated online without attending a single trade expo. That is critical for a small growing enterprise like us with a lean organization. Many people think simply listing your business online will make you visible. The real work begins with how you make your business visible to the right audiences. It doesn’t matter that you are seen by 500,000 internet users if your potential 1,000 customers do not see you and trust your brand. Digital is the gateway for small businesses to make it big and go global!

MI:  You are now expanding from the Philippines to the US, Australia, and New Zealand. How would you change or tweak your marketing campaigns to reach this overseas audience?  Why did you tap these countries first? What are their initial responses to your product? Your campaign?

L: To be honest, we never actively sought to penetrate these markets in the beginning. I knew Pawdel has the potential to be a global brand but I thought we should consolidate first in the domestic market. It wasn’t until our own retail customers told us that Pawdel was by far the best accessories they’ve purchased for their pets. In fact, it’s better than the brands they had purchased from overseas. I was proud of it, but I took it as an exaggeration. Until more and more customers, friends and relatives started telling me our products were indeed a lot better.

And then finally, we received our first wholesale trade inquiry from Europe. Had it not been for the pandemic, that deal would have pushed through in the summer of 2020. But after the lockdown, more wholesale inquiries came our way.

Our first stockist was an e-commerce business based in New Zealand. It’s a new small business but we were surprised with its offtake. It exceeded our expectations by selling out most of its inventory in the first couple of months. I instantly knew right there and then that we can truly become a globally competitive pet lifestyle brand. So I immediately entertained other interested parties to bring Pawdel to their markets. As of this interview, we already have 5 confirmed overseas retailers. We have another three in the advanced stages of negotiations.

MI:  What are the 3 most important marketing and business development lessons that you learned during this journey? 

L:  First, focus on your primary stakeholder. That is your customer! They may not instantly give you enough cashflow that you need to make financial gains and that may potentially distract you to look elsewhere. But the most important value you can gain from them is consumer insight. They are your primary source of strategic intelligence to keep improving and growing the business. If you design your whole value-creation system for them, you will ultimately win. Remember that your business/brand exists for them, not for yourself. This is especially true for first movers. The first in the market is not guaranteed to be the first to succeed.

Second,  perceptiveness uncovers latent wants and needs. I strongly believe that a marketer should understand his or her customer more than the customer understands themselves. For me, that is the precursor to value innovation. If your customers know already what they want, chances are they already know an existing product/service to cater to that demand.

Lastly, don’t think outside the box. Think like there is no box. I started Pawdel with zero background in the pet care industry. Zero background in wholesale distribution and import/export. It didn’t matter because I did the aforementioned first and second important marketing lessons. That’s what I needed the most to find my own space in the industry. Truthfully, I don’t spend plenty of time on competitive intelligence. I’m not saying it’s not important. But I’m comfortable in my own box.

I did a lot of my “firsts” in this business. Most people would be easily discouraged by treading the unknown. Trust me, you will never lack confidence if you study your business and do your homework. That path will open and will no longer be unknown.