The China pet care market is booming. It is projected to grow to USD 83,672.3 million by 2027 from an initial value of USD XX million in 2019.
The pet food market accounts for the highest market share of about 23.31% of the total pet care market in 2019. Pet care market in China experienced a strong development in recent years, driven by the regularly developing pet populace attributable to rising interest from present day purchasers with speedier ways of life and less time in light of work and different weights.
With family unit salary and pet care learning expanding, Chinese shoppers spend more on their pets, which prompted esteem development in pet sustenance being considerably more grounded than that in the general pet care advertisement. The exchanging up pattern is multi-dimensional in the pet nourishment advertisement in China. More purchasers in rustic ranges and lower-level urban communities have exchanged up from table pieces and home-cooked nourishment to instant pet sustenance, giving more grounded volume development to pet sustenance.
The North China market is estimated to grow at a CAGR of 8.7% during the forecast period (2020-2027) to reach a market value of USD 24,919.6 million by 2027. In the northern region of China, customers are more centered around the costs of items, and they are acclimated to expending in settled shops.
The items are for the most part focused towards the lower and medium class. While the size of chain shops is huge, there are few pet boutiques.
The buyers of the China pet market are for the most part school taught individuals who are around 30 years old, with a normal month to month salary of 3000 yuan. There are two pet markets, around 20 boutique shops, more than 30 offices, and about 400 retail shops in Beijing. The greatest chain shops are Kudi, Lechong, Percity, Tom Dog and Paiduoge.
Market Dynamics
Drivers
- Pet Refinement / Humanization Influencing the Purchasing Decisions
- Pet Changing Perception of Consumer towards Pet Health
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Restraints
- Changes in Distribution Channel might hamper the Market Growth
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Pet Refinement / Humanization Influencing the Purchasing Decisions
The number of pet dogs and cats in China is over 91 million, exceeding the entire population of Sichuan province. The spending on pets grew 27% to 170.8 billion yuan (US$24.81 billion) in 2017 compared to 2016, far exceeding the country's consumption growth. It’s estimated that China now has 73.55 million pet owners. Of this, 46.1 percent own dogs and 30.7 percent have cats.
Chinese pet owners typically spend 5,016 yuan on their pets each year, an amount that is more than double the average monthly disposable income of Chinese, indicating that pet owners are relatively well off.
A study shows that over 70% of dog owners in China were born after 1980, and 84.8% of them have had college education. Most of them are professionals or white-collar workers. Meanwhile, nearly 90% of the cat owners were born after 1980, and 88.8% of them finished college. Around 88% of pet owners are women. There is an increased consciousness among pet owners about the ingredients used, as opposed to a decade ago. Contrary to the past, pet owners now see the food as a source of good nutrition for their pets. The demand for pet food free of sugars, grains, dyes and preservatives is a result of this newly gained health consciousness for pets. In the light of these changing consumer demands, a number of pet food companies now claim transparency in the sourcing and processing of ingredients.
Just like human food consumption, there has been an increase in the demand for functional foods for pets. This has prompted pet food companies to be innovative in their product launches.
Hence, the humanization of pets has been the primary driver for the increased demand in the pet care market. Although this trend has been driving the market for the last 2-4 years, it is expected that this will remain the most important factor during the forecast period as well.
Market Opportunities
The World Health Organization (WHO) is involved in various cross-sectoral activities for addressing health threats at the human-animal-ecosystem interface. This factor is also projected to create market opportunities for the market over the forecast period. For instance, zoonoses are diseases which can be transmitted from dogs and cats to humans. Awareness of these often neglected diseases in all health communities is important for protecting pets and owners. To protect the owners and companions, a proper vaccination of animals should be done.
Furthermore, China's pet insurance market has several opportunities amid growing rates of pet ownership across the country. In 2019, over 73 million households in Chinese cities were also home to a pet. The value of the Chinese pet market reached 170.8 billion yuan ($25.3 billion).
The average annual cost of medicine is around 1,557 yuan (240 USD) for dog owners and 1,446 yuan (223 USD) for cat owners. However, those who bought medical insurance for their pets saved most of the expense, spending only around 300 to 500 yuan on pet insurance. There were around 5,000 pet insurance clients between 2015 and February 2018, but the customer base has risen to 160,000 in 2019, according to a China Pet company.
Though China's pet insurance market is still in its early stages, however, over the forecast period, the market is expected to grow significantly and create various opportunities in the China market.
Presently, various established companies are increasingly focusing on the development of healthcare products and services for companion animals. The companion animal healthcare business has witnessed several technological advances and scientific innovations over the past few years. It is observed that the animal healthcare industry in China is quite sensitive to changes in the overall economy. Animal healthcare is also impacted by the level of disposable income, pet ownership, and continued technological changes. Pet adoption for companionship among the elderly population has greatly surged in the past decade. This factor is also an opportunity for China's companion animal healthcare market. With companies increasing their collaborations for better biomarkers and diagnostics, in order to focus on cost regulations, there has been a significant number of opportunities for its applications in indications, like cancer, cardiovascular, and neurological disorders.
Increase in obesity and various diseases in companion animals, in the country has fueled the need for new diagnostic options. In developed provinces such as the Qinghai, Jilin, Hubei, Guangdong, the provisional governments strongly emphasize on pet insurance. The concept of pet insurance is introduced in the country, it is mostly taken from the U.S and western European countries. The pet insurance will cover a certain treatment and medicines to the companion.In spite of the fast development of the pet market in China, it is still a long way from being full grown. It is still a developing industry and necessities to end up distinctly more industrialized and managed to grow advance. The collaboration of pet proprietors, the assistance of expert individuals, the participation of associations and broad communications and gaining from abroad are all crucial to the improvement of the market later on.
Health concerns for animals and humanization have created an opportunity for the pet food market. The new e-commerce regulations, potentially allowing the sale of pet care products via online channel combined with the growth of e-commerce in the pet care market as a result of COVID-19, may present a unique opportunity to increase China's pet market. With the improvement of the online market, pet-related items are developing as it acquires online clients. Measurements from Taobao demonstrate that pet-related items make up around 7% of aggregate merchandise sold in the pet business. As should be obvious, the pet business is creating at a quick pace. Notwithstanding this development, there are sceneries that may frustrate the business’ further development. For instance, there are insufficient administration specialists in the pet business to take care of the developing demand from Chinese pet proprietors. Chinese residential items are not also known as outside brands, which makes them less focused in the universal market.
