A substantial growth of the Pet food market in China
The China’s economy has experienced a fast growth in recent years. With the substantial increase in household disposable income, consumption patterns of Chinese customers is gradually changing. In recent years, the number of Chinese urban and rural residents who have a pet has significantly increased, which brings a development of industries related to pets. In those industries, pet food market in China is one of the fastest-growing industries.
One of our recent market research in Shanghai and Beijing, surveying 1000 pet’s owners showed that there are several reasons to explain this phenomenon (contact our analysts and consultantsfcontact our analysts and consultants. Firstly, there is a new change in the concept of keeping pets. Indeed, with the increasing disposable income, city residents are more likely to spend money on their pets. Secondly, more pet owners have to work so that they don’t have time to take care of their pets and cook for them as it was usual in China’s customs. Pet food is a very excellent choice for them because of the advantage of convenience and safety. Thirdly, the increasingly intense market competition makes the price of pet food more affordable. Last but not the least, Government regulation of keeping pets has kind of relaxed. As a result, the number of families who has a pet has a steady increase.
Categories and segments on the pet food market in China broadly include pet staple foods, pet snacks, and pet nutrition and health products. Moreover, there are two main distribution channels for pet food in China. One distribution channel is professional markets, such as pet shops, pet grooming stores and pet hospitals. Relatively modest number of pet food is sold through those channels, but its profits are larger and the suppliers don’t need to pay “threshold” fees. Another channel is supermarkets, mostly chain supermarkets. Supermarkets will sell a large quantity of pet food, but the profit is relatively low. Therefore, it requests suppliers to pay some “threshold” fee to supplement its insufficient profit.
Foreign pet food companies appear in China pet food market first. Then, local companies learned the experience and technologies from foreign companies and did researches by themselves. That is why the local pet food companies also experienced a fast development.
Local brands reinforce their position in the Chinese Pet food Market
Nowadays, Major competitors in the pet food market in China include Mars Inc, Nestle SA, Nory Pet (Shanghai) Co Ltd, Tongwei Co Ltd, the Tianjin Canpo Hi Tech Development Co Ltd, and Procter&Gamble Co and so on. We recently observe that Mars Inc has played a leading role in China pet food market. It accounts for nearly 42% of the total pet food market share. In addition the total pet food market is not very concentrated. Foreign brands account for a large share of the market in China. However, the domestic brands has a actual advantage on research tools, research and development team, the localization of raw materials, as well as the level of understanding of the market.
For example, domestic pet food companies are dedicated in the research of local market demand. They have for quite a long time conducted surveys in those families who keep a pet to make their products more targeted and applicable, so they can constantly develop and offer lots of suitable products for domestic consumers. Therefore, domestic brands also have a strong development trend and constantly expanded their market shares.
In conclusion, the pet food market in China is not enough mature. The whole industry does not have unified industry standards, especially the standard of food quality. However, there is still a huge potential for pet food market to develop in the future. With advertisements and publication of pet food, many people realized the importance of pet food. Thus, many consumers will choose pet food instead of traditional food for their pets in the future. Therefore, pet food market in China has a very good prospect.