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Pandemic Boosts China’s Pet Industry

The pet industry has seen significant growth in China as a result of the pandemic, with single millennials and those who are lonely and confined to their homes purchasing pets and spending large amounts on food, toys, grooming, etc. Pet food was one of the four most popular product categories during this year's Singles Day online shopping festival in China, along with toys, outdoor sports, and jewelry. Sales of pet food reached 1.90 billion yuan ($268.08 million), a year-on-year increase of 38%. This included sales of cat snacks of 362 million yuan ($50.83 million), an increase of 32.73%, and dog snacks of 121 million yuan ($16.99 million), an increase of 31.43%.

High-end imported pet snacks and baked cat foods were especially popular this year. Sales of baked cat foods on Alibaba’s Tmall platform increased by more than 700% year-on-year, and the turnover of high-end imported snacks on JD.com increased by 150%. The leading brand for pet food was Acana from the U.S., but there were three Chinese brands in the top five, namely Myfoodie 麦富迪, PureNatural 伯纳天纯, and Nourse 卫仕.

The scale of the pet economy has grown explosively since 2019, when cat food overtook baby milk powder as the most popular and best-selling imported product category on Tmall. The variety of products now includes a wide range of pet foods and snacks, nutritional products and vitamins, automatic litter boxes, water dispensers, feeding machines, and pet clothing. The variety of pet services has also expanded greatly to include pet medical care, grooming, photography, swimming lessons, behavior training, pet hotels, and even pet matchmaking and pet funerals.

Potential for Further Growth in China's Pet Industry

According to an industry report released last week, in 2021, China had a total of 58.06 million cats and 54.29 million dogs, and the total scale of the pet economy was 249 billion yuan ($34.96 billion). Another report released in September by the Chinese consultancy iMedia Research 艾媒咨询 estimated China’s pet economy in 2022 to be worth 493.60 billion yuan ($69.31 billion), a year-on-year increase of 25.2%. The industry is expected to reach 811.4 billion yuan ($113.94 billion) in 2025.

Despite the explosive growth, there is still plenty of potential for the pet economy to grow further. According to a report released this month by Guosheng Securities 国盛证券, in 2021, there were 91.47 million pet-owning households in urban areas in China, accounting for an overall penetration rate of less than 20%, compared with 70% in the U.S., 57% in Japan, and 49% in Europe. In 2021, China’s pet economy was only 28.03% of the size of the U.S. market, but it’s growing three times faster than the U.S. pet economy. Chinese households actually spend relatively more on their pets. In 2021, the annual consumption per pet in Chinese households was 2,041 yuan ($286), accounting for 6.73% of total household expenditure, compared with only 1.71% of household spend in the U.S.