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The pet care industry in China has experienced a strong growth in 2016. This growth stems from the busy lifestyle of modern Chinese consumers, who demand efficient and convenient solutions for their pet caring needs. Chinese consumers also perceive pets as a source of relaxation, and as the pace of the lifestyle of modern Chinese men and women increase, so does their need for pets to relax them. Moreover, consumers in rural areas have upgraded from home-cooked food to ready-made pet food, further contributing to the growth. Consumers are not only demanding more with respect to the nutrition of their pets but also with respect to pet-caring products such as pet vaccines, antibiotics, food supplements, soap, and shampoo. Pet caring services are also on the increase, with new clinics being established across the country.
What kind of pets do Chinese consumers purchase?
As China becomes more and more exposed to Western culture, more and more Chinese consumers adopt cats and dogs as their pets, leading to a steady growth in the cat and dog population of Chinese. Moreover, fish constitute 60% of the total pet population as of 2016, due to the special meaning of fish in Chinese Feng Shui; fish signifies abundance and an auspicious future.
Pet Care Industry in China: Purchasing Chanel
Chinese consumers mostly rely on purchasing their pet-caring products from retailers, with 83% of dog and cat food being purchased from store-based retailers. Internet retailing constitutes only 9% of the total pet care retail value sales in 2016. However, internet retailing recorded a robust value growth of 41% the same year, fuelled by its greater convenience compared to other channels. Online shopping also offers consumers the opportunity to compare products and prices in order to locate the best prices. Door-to-door home delivery is also projected to grow in influence.
For these reasons, the players in the pet caring industry are focusing more and more of their efforts on streamlining their supply chains and integrating online shopping into their business models. Indeed, Purina Dog Chow and Purina Friskies from Nestlé (China) withdrew their distribution to supermarkets and hypermarkets in 2014. Reconfiguring and streamlining the supply chain also allows pet caring industries to broaden their reach into Greater China, allowing businesses to take advantage of low economies of scale. Lastly, the boom in internet retailing is also leading towards larger pack sizes, making bulk offerings more profitable to firms compared to before.
Type of Products and Services purchased by the Chinese Consumers
Pet Caring Products
Sales for pet food are growing at a rate of 10% a year in China and are expected to continue growing in the future, as more and more Chinese consumers use commercial pet food to feed their pets. In particular, demand for premium pet food in the larger cities is growing the fastest. Pet food products in China comprise 37% of total pet care sales, which implies that Chinese consumers also demand other pet-caring products such as health and hygiene products for their pets.
Pet Caring Services
The number of veterinarian clinics is also booming in China. As the income of Chinese consumers continues to grow, they become more willing to pay for premium health care services for their pets to ensure their health and longevity. This growth also stems from the Chinese authorities’ recent focus on strengthening and creating awareness about animal rights. As more and more Chinese consumers become convinced that animals have a right to healthy and secure lives, Chinese pet owners are willing to pay more for their animals’ health care.
In conclusion, China’s $1.5 billion pet care industry is booming, offering opportunities for firms to satisfy the needs of Chinese consumers, which is of a very diversified nature. Internet retailing, which offers consumers more competitive prices, in addition to convenient home delivery, is likely to grow in influence and impact the rules of the game in the pet caring industry.
Case Study: Pet Care Industry in China
The client, a famous European brand in the pet food industry, was looking to expand to the Chinese market which represents a huge opportunity in his sector. In order to develop efficiently, the client contacted Daxue Consulting to support the internal decision-making process with market data on the competitors, the consumers, the distributors, the market, etc. Thorough research project analyzing the Chinese market as a whole but also focusing on market features and actors of the sector, in order to give the client a complete picture of the market.
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