Still a status symbol, as well as companion and even furry family member, Chinese consumers’ spending on pets has evolved in recent years turning China’s pet market into one to watch.
Overall, China’s urban pet (dog and cat) consumer market is expected to surpass the threshold of 200 billion yuan in 2019! The overall consumption scale will hit 202.4 billion yuan. This is an increase of 18.5 percent over 2018, according to a white paper (Chinese) released by popular online pet platform goumin.com and Pet Fair Asia.
The Chinese e-commerce market is a major beneficiary of Chinese consumers’ love affair with pets. According to Taobao, consumption of pet-related products on the platform will likely surpass 50 billion RMB per year in the next few years. Last year, nearly 4 million orders of pet products were placed on Taobao’s 12.12 shopping event alone.
Outside the major players like Taobao and JD, in the pet e-commerce arena, Boqii (波奇) and E-pet (E宠) remain sizeable specialty e-commerce sites.
And what do these pet-loving Chinese consumers spend most of their money on?
Biggest category & opportunities
A big chunk of the e-commerce spend goes to pet food, healthy pet treats, and pet nutritional supplements. For instance, AgencyChina’s e-commerce team estimates that around 70% of pet-related spending across Taobao and Tmall goes towards pet food, treats and supplements.
Because of trust, quality and supply issues, foreign brands have been big beneficiaries. For example, multinationals Nestle and Mars have a little over half the Chinese pet food market. Smaller brands, such as Petcurean, Orijen and ISDIN have also been big winners during major e-commerce events like Singles Day.
Going forward, we see continued opportunities in outcome-based nutrition, specialized nutrition and advances in pet care science. But we also believe other pet related categories will see continued growth. Especially as more and more affluent Chinese middle-class consumers will want to spoil their animal companions.
Room for growth
Altogether, consumers spend around 5,561 yuan on a single pet a year, up 545 yuan from the previous year.
However, that’s modest by international standards. U.S. spending on pets totaled $69.5 billion last year, according to the American Pet Products Association. That’s roughly equal to per capita expenditure of $213. By comparison, the projected 170.8 billion yuan expenditure in China this year equals only to $18 on a per capita basis.
So, there’s plenty of room to grow! Chen Mei’en, Purina China director, said the pet food industry has grown about 20-30 percent annually in China, and is expected to grow in strong double-digits for the years to come.
This expected surge in spending on pets will be strengthened further by an increasing number of single young Chinese consumer in the large cities. As well as changes in disposable incomes and stronger emotional attachment to pets.
China’s pet market is changing. If you’re interested in finding out more, contact us for a free consultation.
