Pet Industry Marks a Robust Increase
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.