Introduction to the Low-Cost Veterinary Clinic Market
The market for low-cost veterinary clinics presents a growth opportunity that has yet to be fully tapped. Large pharmacy and retail chains, such as Farmacias Similares, are expected to enter this sector. Ernesto Ávila, president of the Pets and Animals Group of Conafab, anticipates that Farmacias del Ahorro and Walmart de México y Centroamérica might also join the trend.
Market Size and Growth
According to Mordor Intelligence, the veterinary medical care market in Mexico is projected to reach a value of 1,590 million USD by 2029, with an annual compound growth rate of 6.39%.
Attractiveness and Benefits
“The pet-related business sector is highly attractive, and low-cost veterinary consultations will benefit all population segments,” said Ernesto Ávila. He also mentioned that Walmart previously attempted to install a pilot pharmacy before the pandemic, but it did not succeed.
In May 2023, Walmart’s US parent company announced a partnership with telehealth veterinary platform Pawp, offering remote pet care through video calls with veterinarians and emergency assistance without prior appointments.
Investment Requirements
Ávila estimated that a minimum investment to establish a competitive veterinary hospital ranges from 5 to 7 million pesos. He noted that the real business potential lies in their pharmacies, selling medications, but they currently lack a proprietary brand.
New players might consider acquiring laboratories or outsourcing the manufacturing of supplies, as Senasica prohibits producing human and veterinary medications in the same lab.
Barriers to Entry
High initial costs are a significant barrier for new entrepreneurs in the sector, according to Ávila. He cited studies revealing that only four out of ten veterinary clinics opened by entrepreneurs survive more than a decade.
Large pharmacy and retail chains have the financial capacity to enter this market, but they previously saw insufficient investment conditions.
“Most veterinarians are not entrepreneurs. They often lack knowledge in regulatory, fiscal, financial, accounting, and labor matters,” Ávila explained.
Another challenge is the shortage of veterinarians. Although Mexico has 47 universities, including private ones, the supply of professionals remains insufficient.
Veterinary clinics and hospitals must comply with regulations from authorities like Senasica, Cofepris, and Profeco, which require adherence to specific standards and separation from pharmacies.
The slow development of this market is partly due to veterinary clinics only recently demonstrating financial stability, according to Daniel Cosío, vice president of the Pets and Animals Group of Conafab.
Additionally, some pet owners still lack the habit of regularly visiting veterinarians and fostering a preventive care culture.
Key Questions and Answers
- What is the potential of low-cost veterinary clinics? The market for low-cost veterinary clinics presents a growth opportunity, with large pharmacy and retail chains expected to enter the sector.
- What is the market size and growth rate? The veterinary medical care market in Mexico is projected to reach 1,590 million USD by 2029, with an annual compound growth rate of 6.39%.
- What are the barriers to entry for new entrepreneurs? High initial costs, lack of entrepreneurial skills among veterinarians, and insufficient knowledge in regulatory, fiscal, financial, accounting, and labor matters are significant barriers.
- Why is the pharmacy aspect crucial for veterinary clinics? The real business potential lies in their pharmacies, selling medications, as they currently lack a proprietary brand.
- What challenges does the veterinary sector face? Shortage of veterinarians, lack of financial stability in clinics, and the need to comply with regulations from various authorities are key challenges.
