Pet In­dus­try Marks a Ro­bust In­crease

China's Foreign Trade (English) - - Contents - By Liu Xin­wei

As Chi­nese peo­ple’s liv­ing stan­dards have been im­prov­ing con­tin­u­ously in re­cent years, rais­ing pets has be­come a life choice for many peo­ple. This has greatly stim­u­lated the growth of pet prod­uct mar­ket and pets are be­com­ing an emerg­ing group of “dwellers” in Chi­nese cities.

Pets in­dus­try with huge po­ten­tials

Cur­rently, China has about 200 mil­lion pets, in­clud­ing 120 mil­lion pet dogs and 80 mil­lion pet cats. The whole pets in­dus­try worth the value of about 40 bil­lion yuan. The num­ber of pets and the fam­ily rais­ing pets have been in­creas­ing at an an­nual rate of 20-30%, lay­ing a solid foun­da­tion for the de­vel­op­ment and pros­per­ity of China’s pets in­dus­try.

Bei­jing is an im­por­tant trade cen­ter for the pet prod­ucts in­dus­try, with huge mar­ket po­ten­tial. Its mar­ket trans­ac­tion vol­ume tops North China, as its good con­sump­tion mar­ket has greatly sup­ported the con­tin­ued de­vel­op­ment and pros­per­ity of the pets in­dus­try.

Re­cently, the third Bei­jing In­ter­na­tional Pets Prod­uct Ex­hi­bi­tion was held at China In­ter­na­tional Ex­hi­bi­tion Cen­ter. Dur­ing the ex­hi­bi­tion, Xu Yadie, in charge of the pet chan­nel of To­day Head­line, re­leased the 2015 to­day Head­line An­nual Re­port on Big Data of Pets. Ac­cord­ing to the re­port, the per­cent­age of rais­ing pets for U.S. fam­i­lies are 62%, with an an­nual sales value of 55 bil­lion USD; the per­cent­age of rais­ing pets for Ja­panese fam­i­lies is 45%, with an an­nual sales value of 15 bil­lion USD. Cor­re­spond­ingly, the per­cent­age of rais­ing pets for fam­i­lies of China’s first-tier cities is less than 15%, with an­nual sales value of 7 bil­lion USD, about 1/8 of the U.S.

“The pro­por­tion of Chi­nese pets prod­uct mar­ket value to the GDP is only 0.4%, lower than Ja­pan’s 2%, Europe’s 4-5% and North Amer­ica’s 6%. So China’s pet in­dus­try has very large de­vel­op­ment po­ten­tial,” said Liang Shi­hong, rep­re­sen­ta­tive of Hong Kong Pets Com­merce As­so­ci­a­tion. Fur­ther anal­y­sis of the types of pet prod­ucts shows that the pet food ac­counts for 40% of the to­tal sales vol­ume, which is the largest share; next is the pet med­i­cal prod­ucts, tak­ing 16%, and pet toy prod­ucts, tak­ing 13%. The rest are pet san­i­tary prod­ucts and pet beauty prod­ucts.

China’s pet in­dus­try started in the 1990s and dur­ing the first decade, only the no­ble class was en­ti­tled to the ac­cess to the in­dus­try, as the pet prices were very high. Later, pets be­gan to find their way into nor­mal fam­i­lies, as the emo­tional needs of pet lovers and old peo­ple started to emerge. The ma­jor­ity of peo­ple rais­ing pets are old peo­ple with age above 50 and young gen­er­a­tions with the age be­low 30. The so­cial groups with the age be­tween 30 and 50 nor­mally raise no pets, be­cause of the high work­ing and liv­ing pres­sures they face.

“In the next decade, the new gen­er­a­tion will be­come the back­bone of the so­ci­ety and China’s pet in­dus­try will em­brace a new round of ro­bust growth. The mar­ket size is ex­pected to reach hun­dreds of bil­lion yuan.” said Liang Shi­hong.

Pet ser­vice in­dus­try opens up new con­sump­tion model

As more and more fam­i­lies start rais­ing pets, peo­ple be­come more ra­tio­nal and knowl­edge­able about how to raise pets. There are de­mands for high qual­ity pet prod­ucts and ser­vice, and the brand aware­ness of China’s pet prod­uct in­dus­try is tak­ing shape. The pet ser­vice in­dus­try also flour­ishes and reaches nor­mal fam­i­lies.

“The pet in­dus­try is big and com­pre­hen­sive, in­clud­ing pet food, pet beauty prod­uct, pet

hos­pi­tal, pet e- com­merce.” said Xu Siyu, sales man­ager of Bei­jing Pu­rui­huakang Biotech­nol­ogy Co., Ltd.

In­no­va­tion is be­com­ing in­creas­ingly pop­u­lar in the pet mar­ket and reaches almost ev­ery part of the pet lives, in­clud­ing pet food, cos­tume, pet mar­riage and pet fu­neral. “We would like to cre­ate a pet mobile ser­vice plat­form ‘Wan­chong’. We will use three pet ve­hi­cles, in­clud­ing pet med­i­cal ser­vice ve­hi­cle, pet beauty ser­vice ve­hi­cle, pet as­sis­tance ser­vice ve­hi­cle, to di­ver­sity the pet ser­vices and bring them to the com­mu­nity.” said Zhang Jinyu, CEO of Bei­jing Wanpi Cul­ture As­set Man­age­ment Co., Ltd.

As more and more peo­ple started to raise pets, needs for the pet beauty ser­vices are also in­creas­ing. Pet stores be­gan to emerge in this back­ground. In pre­vi­ous years, pet own­ers went to the pet stores mainly for shop­ping food and rope. Now the pet toy, pet cos­tume and pet hair cut­ter are put on the shelf. Pet ser­vice in­dus­try is boom­ing almost overnight and the price keeps sky­rock­et­ing. But peo­ple’s pas­sion is not erod­ing.

“Pets play an ac­com­pa­ny­ing or rel­a­tive’s role in mod­ern peo­ple’s lives. Peo­ple be­gan to care more about the life qual­ity of pets. This is a huge mar­ket with tens of bil­lion yuan in sales value.” said Zhang Jinyu.

He said that med­i­cal and beauty ser­vices are the two peak con­sump­tion points of the pet in­dus­try. The per com­pa­nies could com­bine the off­line and on­line ser­vices, to cre­ate a new pet ser­vice model fea­tur­ing “net­work + com­mu­nity + pro­fes­sional ser­vices”.

“The one-stop pet med­i­cal, beauty and food ser­vices could stim­u­late the de­vel­op­ment of the pet in­dus­try. It will also cre­ate big em­ploy­ment op­por­tu­ni­ties for pet doc­tors, train­ers and other peo­ple. The mar­ket po­ten­tial is huge.” Zhang Jinyu added.

Data shows that the com­pos­ite growth rate of China’s pet in­dus­try in the past decade reaches about 59.5%. Spend­ing on pets in Shang­hai has amounted to 0.6-0.7 bil­lion yuan. “The fu­ture pet con­sump­tion mar­ket will have huge busi­ness op­por­tu­ni­ties.” said Zhang Jinyu.

Cur­rently, many pet stores are comb­ing the on­line and off­line op­er­a­tion that in­cludes pet beauty, pet ho­tel and pet med­i­cal chain clin­ics. In the fu­ture the three types of ser­vices will also in­te­grate. “I hope the in­te­gra­tion of the three types of ser­vices will push the pet in­dus­try for­ward to the higher level.” Xu Siyu men­tioned.

Pet wear­able prod­uct still “blue ocean mar­ket”

Re­cently, a pet smar t equip­ment “You­chong­beibei” re­ceived big suc­cess in crowd fund­ing at Jing­dong plat­form. Pet wear­able prod­ucts be­gan to grasp pub­lic at­ten­tion.

Wear­able tech­nolo­gies have been un­der­go­ing rapid growth in re­cent years and the re­lated prod­ucts have ap­peared in all the fields, in­clud­ing the pet wear­able prod­uct mar­ket. A mar­ket sur­vey re­port from Idtechex shows that it is estimated the mar­ket value will reach 2.6 bil­lion USD in the year 2025.

The past sev­eral years have wit­nessed the ap­pear­ance of wear­able prod­ucts in the mar­ket tar­get­ing pets, in or­der to let pet own­ers know what their pets are do­ing. The health track­ing ma­chine, in­clud­ing Fit­bark and Voyce, en­ables to track the daily ac­tiv­i­ties, the heart­beat and breathe of the pets; pet own­ers could also know the where­abouts of their pets through the GPS ma­chine at­tached to the col­lar of the pets. There are more cre­ative equip­ment, through which pet own­ers could know what their pets are do­ing. No More woof, a head­phone pro­duced in Swe­den, could trans­late the emo­tions of dogs into hu­man lan­guage, cut­ting the com­mu­ni­ca­tion bar­ri­ers be­tween hu­man and dogs.

Cur­rently, the num­ber of stray cats and gods reaches nearly 1 bil­lion. As the health problem and losses of pets be­come more se­ri­ous, wear­able prod­ucts have a very bright fu­ture in the pet mar­ket. Ac­cord­ing to re­port by Idtechex, nowa­days more than 300 com­pa­nies in the world are fo­cus­ing on the R& D and pro­duc­tion of wear­able prod­ucts for an­i­mals. The num­ber of com­pa­nies in­volved is estimated to reach about 500 in the year 2025.

“For those pet own­ers, it will be very nec­es­sary to buy a suit­able wear­able prod­uct for their beloved pet. This will en­able pet own­ers to know the where­abouts of the pets, and also gain the gen­er­a­ble knowl­edge of the health con­di­tions of the pets.” Xu Siyu said that the smart equip­ment that could de­tect the pet ac­tiv­ity, sleep and lo­ca­tion has be­come the ba­sic needs of pet own­ers.

Xu Siyu men­tions that the pet wear­able prod­uct is an emerg­ing mar­ket, but is still a “blue ocean mar­ket”. First, the ty­coons of the mar­ket have not pro­moted strong prod­ucts; sec­ond there are no big play­ers in the pet wear­able prod­uct. This is a big busi­ness op­por­tu­nity.

As a mat­ter of fact, the blue ocean mar­ket is at­tract­ing many in­dus­try play­ers and startup com­pa­nies. The seg­mented mar­ket will have more busi­ness op­por­tu­ni­ties. For pet own­ers this is also good news, as the pet smart wear­able prod­uct could help re­lieve their minds, but also in­crease the sense of fash­ion. The past method to beau­tify their pets by us­ing fancy pet cos­tume is ab­so­lutely out of date.

Med­i­cal and beauty ser­vices are the two peak con­sump­tion points of the pet in­dus­try.

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