Competition heats up in online pet food & supplies business; Everyone is raising funds and Amazon gets in

Competition may be heating up for Plymouth Meeting-based Pet360 (which operates under PetFoodDirect.com and other brands), a leader in the online pet food and supplies market which just last week announced an $18 million round of equity financing lead by Updata Partners and joined by previous investor LLR Partners of Philadelphia.

Today, Amazon got into the game through Quidsi, the New Jersey-based online retailer (Diapers.com, Soap.com) founded by some bright Wharton people that it acquired last year for $540 million. Quidsi introduced Wag.com, which will offer free shipping for orders over $49. Quidsi has experience with customer service and the logistics of picking and shipping often bulky items on a low cost basis.

Also today, New York-based PetFlow today announced a Series B funding round of $10 million. PetFlow is basically in the same business, although they say they focus on healthier foods and hard to find items.

All of this led many commentators today to make comparisons to the Pets.com fiasco of the 2000 Internet bubble era. But people in the US spend over $50 billion a year on their pets, its a growing market, and there is a much better understanding today of the markting, economics and logistics of online retailing. Whether there will be room for three or more major players in the market, though, is another question.