I recently read a book that talked through the control Luxottica has over the glasses market. They own the licenses to most of the large brand names. They control the licenses for Ray Ban, Chanel, Jimmy Choo, Oakley and basically every large glasses brand. This includes prescription glasses. Do you know Sunglasses Hut in every airport? They own that as well. This has led to the prices remaining high for a long period of time. (I wear glasses so know how much they try to charge.)
The microchip market is not dissimilar.
We consider microchipping an Oligopoly. Several large companies have controlled the UK market for a long time. Between 3 companies it’s estimated they control over 80% of the market and they’ve been around for a long time.
This leads to several issues:
- Prices remain artificially high
- The companies involved in an oligopoly tend to be bloated which leads to increased costs and therefore increased end-user prices.
- Lack of innovation
What does this mean for the microchip market?
- The cost to pet owners is high. It costs on average £22 for a pet owner just to be able to update their details.
- This remains high as many purchasers of microchips don't consider this as part of their purchasing decision, sticking with the status quo.
- Pet owners don't get value for their money because of a lack of innovation in the sector
This leads to some real-world problems. Not just the cost to pet owners.
- The high cost to pet owners leads to microchips not being registered or updated.
- This remains high as many purchasers of microchips don't consider (and sometimes don't care) about the later cost to the pet owner. They want to buy the microchips as reasonably as they can as future costs are not theirs to consider.
- Pet owners don't get value for their money because of a lack of innovation in the sector. There's a lack of innovation as veterinary practices and other implanters continue to buy the incumbent product leading to a continual supply of pet owners which means the oligopoly databases don't need to change / innovate or give pet owners value for their money as keeping details up to date is a legal requirement for the pet owner.
- It actually causes veterinary teams and rescues on the ground problems as many pet owners don't update their details because of the high cost and lack of value. This means when a pet is handed in lost it can be harder for veterinary teams, rescues and councils to get the lost pet home.
But wait - There's been a continual increase in microchip databases over the last 5 years
This is true and it’s a strange phenomenon.
The oligopoly is driven by a few things:
- Veterinary practices implant around 75% of all microchips in the UK.
- 58% of veterinary practices are owned by 6 firms. This is currently subject to a competition investigation by the CMA. Learn more HERE.
- Microchipping is a very small part of the larger veterinary business and is not considered separately from pharmaceuticals.
The proliferation of new databases tends to service the implanter market and generally supply locally. i.e some of the new databases supply a small group of breeders. From our market knowledge and statistics on microchip searches, there haven’t been many of these new entrants that have gained much market share.
It should also be noted that one company owns 4 of the smaller databases so technically the number of databases is over-egged by around 25%.
Is this changing?
This is starting to change in a small way. Here’s a few of the trends we’re seeing:
- There is a definite increase in non-veterinary implanters. We're not sure at this time if it's a long term change but we will do some market research. We've heard from pet owners they are looking elsewhere for microchipping services due to the increasing cost at many veterinary practices. (I saw an invoice recently for £45 for implanting a microchip. This is over twice the price a typical implanter charges.)
- We've seen an increase in pet owners asking to buy microchips from us and send them to their veterinary practice for the vet to use.
- We get daily requests for recommendations of where a pet owner / breeder can get a MyPet microchip implanted.
- I've been involved in microchip sales for many years now and I do feel veterinary practices and microchip implanters are considering the experience of their pet owner more and more.
Why should Veterinary practices and implanters consider their microchip supplier
Veterinary practices and implanters should consider their microchips for a few reasons:
- Your microchip supplier reflects on your business. If registration is hard for pet owners, or is expensive pet owners can blame your business for this
- Choosing a microchip supplier which increases the chances of pets getting home safe can make your life easier long term.
- You and your customers can get a much higher level of customer service
- If you've been using the same microchips for a long period of time, how do you know you're getting the best price.
Consider MyPet
We offer an all in one service. We supply our microchips and operate the database. Here’s a few of the main benefits:
- It's always 100% free to register, update and transfer microchips. There's never a fee to ensure the details are up to date.
- Multiple registration options to suit your workflow including integrations with veterinary platforms.
- Pet owners receive 6 monthly reminders to help them keep their details up to date.
- German made microchips with entire supply chain in Europe.
Vets
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Rescue
Find out how we help Animal Rescues
Pet Breeder
Find out how we help pet breeders
Implanter
Find out how we help microchip implanters
