Numbers are important for China. The recent celebration of their 70 yearsunder Communist rule proved this with the largest parade in history showcasing100,000 performers and 15,000 troops at Tiananmen Square, all for its over 1.4billion citizens and the world to see.
By the numbers: Pet ownership and spending
While all that was happening, a great assembly of 99.15 million four-leggedconsumers have gathered in the urban homes of Chinese people. That would be55.03 million pet dogs and 44.12 million pet cats, with an overall consumptionvalue of 202.4 billion yuan (US$28.8 billion) in 2019, an increase of 18.5%over 2018.
These numbers are highlights of the 2019 China Pet Industry White Paper, whichcame about after a 10-month survey of 40,000 pet owners ‘and people with nopets from 366 cities. It particularly focused on four representative cities:Beijing, Shanghai, Xi’an and Chengdu.
The report, released at Pet Fair Asia 2019, analysed consumption trends inthose cities where 99.15 million pets represent an 8.2% increase for dogs and8.6% for cats (7.66 million more pets total) over the 2018 population.
Of the 202.4-billion-yuan pet consumer market coming from surveyed cities,almost 62% (124.4 billion yuan or US$17.7 billion) are attributed to dogowners, who collectively spent 17.8% more in 2019 on their dogs than theprevious year; the remaining 78 billion yuan (U11.1 billion) are from catowners buying 19.6% more feline products than in 2018.
The report showed Shanghai’s cats and dogs are behind a 19.7-billion-yuan(US$2.8 billion) consumer market, ahead of the other three major citiessurveyed. Shanghai is the most populous city in the world with 22.3 millionpeople.
On average, every city-dwelling pet cat and dog in the report consumes 5,561yuan (US$800) worth of goods per year. The per-capita consumption of a singlepet dog is at least 6,082 yuan (US$864), a year-on-year increase of 9%, whileper-capita consumption of a single pet cat is 4,755 yuan (US$675.50), a year-on-year increase of 10.3%, the report said.
Most spending is on pet food,
accounting for 61.4%, up 9.2% from 2018. By end-2019, the report estimatedChina’s urban pets would have eaten some 48.6 billion yuan (US$6.9 billion)worth of pet food. However, this amount is much larger than EuromonitorInternational numbers, which valued the entire Chinese pet food industry atUS$1.7 billion in 2017, ballooning to US$6.1 billion in 2022.
Pet population boom
Despite concerns about the damaging effects to the pet industry of China’strade war with the U.S. and how China’s population has actually begun todecline and age rapidly like in other highly industrialized countries, its petindustry is still looking at a very promising future.
One reason for this is China’s current pet boom as demand for companionanimals comes from almost every age group. Given that the standard of livinghas improved across the country of late, especially in urban centres, youngpeople, adult singles, families with small children and retirees are welcomingpets into their lives more than ever.
According to Euromonitor, China’s pet population has increased by a 7%compound annual growth rate (CAGR) from 2013-17, from 389 million pets to 510million. It added that the pet population explosion will continue from2018-22, from 551 million to 755 million at 8.2% CAGR. By that time, China’spopulation will peak at an estimated 1.411 billion, but the pets’ number willstill be rising.
Fish will always be the top pet of choice in China, with 220.5 million of themin household aquariums come 2022.
Cats, whose size and demeanour make them more suitable for small-spaceapartments, will nearly double their number from 2018’s 87 million to 171million in three years. With a population growth of 18.5% CAGR, cats willbecome China’s second most favorited house pet, followed by dogs at 136million.
Euromonitor estimates that from 2018 to 2022, China’s dog food sales, at 29%CAGR, will continue their steady ascent from US$1.5 billion to US$14.1billion.
Cat food sales for the same period (and also at 29% CAGR) will likewise showstrong growth to reach US$2 billion.
Both types of pets in China love their dry food more than the wet kind, or atleast that is what Chinese pet owners tend to buy the most. In 2022, dry foodfor dogs and cats in China will bring in sales of US$2.7 billion and US$1.3billion, respectively. As for wet food, Euromonitor’s forecast is US$841million for dogs and US$705 million for cats in 2022.
Premiumization
Chinese pet owners from urban centres are also leading the trend toward“premiumization” or the move toward more expensive, high-quality pet food withmore nutritional value. Driven by issues with pet food safety, those who canafford to spend more are choosing imported premium pet food over locallyproduced economy brands.
Euromonitor data showed that in 2018, China’s market for premium wet and drycat food totalled US$284 million while that for dogs reached US$745.4 million.Four years later, cats and dogs in the country will be meowing and barking forpremium pet food to the tune of US$2.8 billion (US$793 million for premium catfood, US$2 billion for premium dog food).
But there are domestic pet food companies, too, like Shanghai Bridge PetcareCo. Ltd., that are able to challenge the dominance of Mars Inc. and Nestle SAbecause they have the home-court advantage and competitive offerings. ShanghaiBridge Petcare is the maker of Vigor & Sage, Nature Bridge and Kitchen Flavourpet food, which claim to have high product standards but are relativelycheaper than popular imported brands.
There’s still plenty of room for more pet food vendors in a market as giganticas China. The thing to know is where the concentration of pet owners is.Shanghai is China’s pet capital with the highest number of registered pets in2016, followed by Beijing, Guangdong and Jiangsu. For some reason, petownership is also reportedly high among residents in coastal districts alongthe border of China. Research firm Daxue Consulting said 54% of registeredpets are in towns near the water, which sounds like the perfect place for petfood companies to dive in.
A lma Buelva is a journalist from the Philippines. When she’snot writing about business and technology, she devotes her time to taking careof animals and writing about them, too. First published in PetfoodIndustry.com
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