Walmart partners with Pawp to offer free telehealth for pets

Walmart jumps into the booming pet telehealth market.

The mega retailer has struck a deal with tele-veterinary provider Pawp to offer Walmart+ subscribers access to the startup’s one-year memberships, the two companies confirmed to CNBC.

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Unlimited access to telehealth via video or text will be available to Walmart+ subscribers starting Tuesday when Walmart is expected to announce the partnership publicly. Remote veterinary visits are increasingly industry-wide as consumers seek convenience, but some veterinarians say the practice can be risky for pets.

Walmart said the offer will be available for a limited time. Walmart+ subscribers will have until November 19 to sign up.

The terms of the deal were not disclosed. Pawp annual membership starts at $99.

Wal-Mart’s foray into televeterinary healthcare comes as the company looks to deepen loyalty with shoppers, attract and retain higher-income customers and better compete with them. Amazon By making the subscription service more valuable while adding perks.

Walmart+ costs $98 annually, or $12.95 per month. Similar to Amazon Prime, Walmart’s service gives members access to unlimited free deliveries and a host of other benefits, like free access to Paramount+ and discounts at the gas pump.

Amazon Prime, which costs $139 annually or $14.99 per month, also has its own partnerships, where members currently get free access to GrubHub+ for a year, along with other perks like photo storage and discounts on prescriptions. By adding Pawp to its subscription, Walmart hopes to keep its membership service competitive with Amazon Prime.

“There’s no denying that over the past decade, we’ve begun to think and consider pets as part of the family,” Pawp CEO Marc Attia told CNBC. “[Walmart has] A very strong thesis about the pet category and yes, they want to be a big player in pet care and pet health in general, and Pawp really allows them to step out of the competition and do something none of the other players have done.”

The deal comes as the $123.6 billion US pet market is exploding, with more and more American families shelling out big bucks to keep their furry family members healthy and happy.

The US market is expected to grow to $200 billion by the end of the decade and pet healthcare is driving that boom, according to research from Bloomberg Intelligence.

“During the pandemic there have been a huge number of pet adoptions, and more important than just the numbers is how people treat their pets. Pets have become part of the family, people are spending on their pets and people are spending on their pets’ health care,” said Ann Hunter Van Kirk. , senior biopharmaceutical analyst at Bloomberg Intelligence, told CNBC.

When an animal had a serious health problem or life-threatening illness in the past, it was common to neglect the pet, Van Kirk said, but now, people are often willing to spend what is necessary to keep them alive.

She said Walmart’s partnership with Pawp “makes perfect sense” and shows how much retailers want to increase their share of the pet market.

As Amazon deepened its investment in human health, including through its $3.9 billion acquisition of primary care provider One Medical, Walmart has grown its pet business. It’s already one of the biggest players in pet food, prescriptions, insurance, and hard commodities like toys and beds.

Wal-Mart’s expansion into pet telehealth indicates that the largest retailer in the United States is poised to increase its market share.

“[Walmart] It has become the one-stop destination for all pet parents’ needs,” a company spokesperson told CNBC. “By providing simple, convenient shopping and affordable pet care solutions in all areas—from food, treats, toys, clothing, durable goods, and services—Walmart delivers real value, Especially during this inflationary time.”

Telehealth visits can be used to address “many common concerns,” such as allergies, digestive issues, or “mild lameness,” the spokesperson said. The service can also be used for follow-up care.

Traditional pet retailers just like chewy And Petco It is already investing in pet health care in order to better compete with supermarkets. In the long term, it will be a major factor in whether they can grow and generate higher profits over time.

Walmart’s partnership with Pawp will allow it to better compete with Amazon and could boost sales of its pet products. The deal will also solve a critical problem for Pawp: customer acquisition.

Walmart hasn’t publicly disclosed its Walmart+ subscriber numbers, but Morgan Stanley estimates the member count has reached 19.3 million, and it’s growing steadily, according to an April research note.

Industry insiders have cited new customer acquisition as one of the most severe hurdles that pet telehealth providers must overcome to expand their business, because the practice is still new, and its value proposition can be limited.

Pawp, which has raised $27.5 million in funding since its inception in 2020, according to Crunchbase, also doesn’t share its membership numbers. But now she will be able to reach millions of potential customers through the partnership.

Pet telehealth is just one arm of the overall pet health market, and it has experienced rapid growth since the Covid-19 pandemic, when it first emerged out of necessity.

Chewy was one of the first major retailers to offer the service, and it’s currently free to its customers. Now, a host of startups and large vet chains offer telehealth services to parents.

The practice has come under scrutiny from some vets who have expressed concerns that the service could put pets at risk. It has become a major point of discussion in the veterinary community.

Some veterinarians told CNBC that it is difficult to assess health concerns, including life-threatening conditions, when examining a pet hypothetically, and said there is no substitute for a physical exam.

Others have argued that pet telehealth helps bridge access to care as pet owners deal with nationwide veterinary shortages and swaths of pet-healthy deserts across rural America.

The space is also subject to a maze of regulatory challenges at the state and federal levels, which have held back Chewy from expanding its telehealth services, CEO Sumit Singh previously told CNBC.

Most states prohibit vets from presumptively diagnosing conditions or prescribing medications unless they have previously examined the pet in person and established what is called a veterinary patient-client relationship, or VCPR.

During the Covid-19 pandemic, several countries temporarily retracted those guidelines to respond to the global health emergency, but some countries have made the changes permanent. It sparked a growing lobbying movement to change VCPR regulations nationwide, which Chewy and Mars Veterinary Health, a subsidiary of the pet food and candy conglomerate Mars, helped fund.

The American Veterinary Medical Association, the nation’s leading advocacy group for veterinarians, keeps out an emergency such as a global pandemic, and a VCPR can only be established after in-person testing. The group’s ethical standards allow veterinarians to diagnose conditions, prescribe medications, or treat animals virtually, but only after establishing a VCPR in person.

In states that allow virtual VCPR, Pawp vets prescribe medications and diagnoses when appropriate. But the company’s founder has defended the practice and said the best care for pets comes when they are “married physically and digitally.”

“A lot of times, especially in our industry, regulations lag behind what I would say is the latest innovation, the latest kind of similar outcome, so we want to make sure we hit the right balance,” said Attia, CEO of Pawp.

“We have a huge shortage of vets, right?” He completed. “The last thing you want is a pet that needs a certain medication… to not get the proper care that they need, not get the medication they need just because they don’t have access to that vet.”

He said the company’s medical team is constantly reviewing medications to identify safe ones that can be prescribed by default, such as flea and tick prescriptions, regardless of what regulations say.

“Number one is can we prescribe? Number two is the type of medication that we are comfortable prescribing,” Atiyah said. “We still have very high restrictions on what we think is the right thing to do for pets.”

CNBC channel Melissa Rybko Contribute to this report.