Since the end of the last century, the concept of pet has quietly arisen in China. After ten years of rapid development, it has gradually attracted widespread attention and attention from all walks of life. At present, a series of commercial activities such as production, sales and service around pets have undoubtedly appeared on China’s economic stage as a new industry.
Judging from the development experience of the international market, the emergence and rise of this new industry indicates that the social economy has developed to a certain scale and level, and at the same time it also means that it will provide new employment opportunities and financial income for the society.
PART1 Development of China’s Pet Industry
STEP 1 Starts-Environment Promotes New Industries
Introduction: The improvement of national living standards, the higher pursuit of spiritual life, and the increasingly international social environment have made the pet industry take shape.
With the surge of reform and opening up, a large number of “returnees” have returned to China and brought into the world various new concepts including pets. In addition, international pet product brands have successively set up factories in China and entered people’s eyes through different channels, thus triggering a new concept of pets in China.
With the improvement of national living standard and the change of life style, people’s leisure, consumption and emotional sustenance modes have also undergone major changes. With the emergence of “double income no kids” and “single aristocrats” in the mainstream consumer groups in society, the development of the entire pet market has been further stimulated, and the pet industry has also rapidly arisen.
With the internationalization of China’s economy and the continuous progress of social civilization, people have gradually changed the traditional “watchdog” into companion animals and family members in life. Therefore, the concept of pets in market consumption is once again guided and emphasized. At the same time, along with the formulation, revision and perfection of various government laws and regulations, and even more refined humanized management today, the development of the entire pet industry is continuously promoted and promoted.
According to the data from the Animal Medical College of China Agricultural University, when a country’s GDP per capita is between 3,000 and 8,000 US dollars, the pet industry will develop rapidly. At present, quite a number of cities in China have reached this level. The pet industry in Beijing, Shanghai, Guangzhou and other cities has been quite developed. Taking Beijing as an example, Beijing’s GDP per capita reached US$ 3,000 for the first time in 2001, which indicates Beijing’s strength in becoming a developed city in the world. In 2008, Beijing’s GDP per capita exceeded 9,000 US dollars, and the national GDP per capita reached a record high of 3,381 US dollars. Behind the strong economic growth, the domestic pet market has also seen unprecedented prosperity.
STEP2 Development-Pet Industry Gradually Perfect
Introduction: In the 1990s, the first society for the protection of small animals was established, the first generation of domestic dog food went offline, and the first truly national chain store appeared … Since then, China’s pet industry has started to segment the market and gradually improve.
1. Initial Stage: Early 1990s In 1992, the China Society for the Protection of Small Animals was established to promote to the whole society the concepts of protecting animals, caring for animals, animals being friends of human beings and other symbols of social civilization. While redefining pets, the lifestyle of raising pets is raised to a concept based on educational culture, which enables everyone to form a preliminary understanding of “pets”.
In 1993 Mars Company set up a factory in China. In 1995, French royal and other international brands entered the domestic market one after another, which immediately opened the prelude of the domestic pet market and took the lead in proposing and guiding the domestic pet concept.
In 1993, the establishment of the first batch of pet shops in the market, represented by the Shanghai naughty family and Beijing yiya, specializing in the sale and service of pet products, created an atmosphere and appeal for pet consumption.
2. Rapid Development Period: Late 1990s
In the late 1990s, with the establishment of national laws and policies, the whole society had a brand-new concept and concern for the pet market, making pets a common public topic discussed by the whole country and society.
At the same time, the establishment of a large-scale chemical plant in the manufacturing industry dominated by light industrial products has once again injected new blood into the development of the domestic pet industry. The large-scale development of export-oriented enterprises represented by Yantai Naughty, Wenzhou Petit, Hangzhou Tianyuan and Shanghai Dogman has not only promoted the rapid development of the international market, but also promoted the development of the domestic market.
Pet retail stores, pet hospitals, pet professional breeding grounds and other related pet industries led by Beijing and Shanghai have also started to spring up one after another, becoming the main force for the development of the pet market.
3. Competition Upgrade Period: Early 21st Century
At the beginning of the 21st century, more international pet brands represented by Guanneng, Aisi and Top brands entered China and began to gradually influence the consumption orientation of the entire pet market.
Some domestic manufacturers began to enter the domestic pet market, such as Yantai Naughty, Norris, Good Host and other domestic brands, driving the development of the entire pet industry chain.
There are pet foreign trade production bases with the Yangtze River Delta and the Pearl River Delta as the production cores. Reproduction farms drive living consumption, and pet trading markets, represented by Beijing, Shanghai, Shenyang and Chengdu, are formed. All kinds of professional dog and cat exhibitions and dog and cat competitions in China; The pet products exhibition led by Great Wall Company and Wanyao Qilong Company; Pet stores represented by Beijing Kudi Pet and Shanghai Naughty; Professional Pet Beauty School headed by Jianwen; Pet magazine represented by “Pet World”; Pet websites and forums represented by pet net, China; Pet columns created by various mainstream media newspapers and magazines and pet channels of TV and radio stations; As well as a series of commercial and cultural activities around “pets” such as pet parks, pet photography, and pet funeral and interment, the pet industry market has a brand-new and professional positioning and has formed an increasingly mature business model.
Looking at the development of the whole pet market for ten years, the market is mainly dominated by exports. For example, the domestic market sales of Yantai Naughty in 2009 was about 20 million RMB, but this seemingly huge figure is only 5% of its export market size. Therefore, at present, it seems that the domestic market is still in a gradual and orderly development process, and there is still a certain gap with the pet market data of developed countries, which also shows that China’s pet market still has huge development space.
PART3 Maturity-Market Branding Becomes Leading
Introduction: After more than ten years of rapid development, a complete industrial chain is gradually improving. Domestic and foreign enterprises are focusing on the Chinese market. How big is this market and what are its characteristics compared with mature foreign markets? after a year of investigation, pet world gives you a complete picture of China’s pet market.
1. Number of pets
Current statistics in China show that in the pet dog and cat commodity market, pet dogs account for 85% of the market share and pet cats account for 15%. At present, the total number of dogs in China is estimated at more than 58 million. Take Beijing as an example. In 2001, the number of dogs registered in Beijing was less than 100,000. In 2009, the number of dogs registered by the Beijing Public Security Bureau reached 900,000. Although the number increased nearly eight times in nine years, of these 900,000 dogs, only 300,000 dogs were registered in the urban areas of Beijing, which is the so-called “companion animals” in the pet industry and the consumption target regarded as family members. The remaining 600,000 dogs were all kept in non-urban areas of Beijing. Based on this basis and model, the number of truly effective pet dogs in the country is estimated to be 4.25 million, and the number of pet cats is estimated to be 2 million, which is still increasing at a rate of 30% per year.
2. Number and scale of pet retail shops
With the overall development of the pet market, more and more pet lovers and investors are focusing on the investment and operation of pet shops. However, due to the limitation of the share of the whole pet industry, the imbalance of pet markets in various cities, and the uneven management ability of market operators, the overall level of the domestic retail industry is relatively low.
At present, the total number of domestic stores is about 10,000, of which 30 ~ 50 square meters and free market stores account for 80% of the total. These stores are basically a multi-functional operation mode of one store, covering almost all pet services such as commodity sales, beauty bathing, foster care and living body sales in a limited area. The overall lack of professional service standards and conditions to attract and cultivate high-quality customers. At present, only 10% of the national market is occupied by stores with international scale and level, including chain stores represented by Beijing Kudi, Shanghai Naughty Family, Shanghai Petland, Shanghai Mi Le Buti, Hangzhou Jika and Shenzhen Ruipeng (Meibao Lido), and single-store stores represented by Beijing Yiya, Shanghai Bailey and Shanghai Qibao. These high-quality professional retail stores have played a great role in promoting and promoting the education and cultivation market, and are also the main force in the future pet market and economic development.
3. Regional Differences in Pet Market
The consumption habits of China’s pet market are quite different due to the different characteristics of cities and regions. Of course, the maturity of the pet market also determines the difference in consumption proportion. Generally speaking, the consumption proportion of goods in the areas north of the Yangtze River is more prominent, with the ratio of service consumption being about 7: 3. South of the Yangtze River, more emphasis is placed on professional pet services, with the sales ratio of supplies and services basically at 5: 5. This also provides a certain commodity-oriented basis for distributors and manufacturers. At the same time, from the perspective of urban development, the proportion of total consumption of goods in first-tier cities represented by Beijing and Shanghai is relatively high, while the proportion of service sales is relatively high in prefecture-level cities that are just emerging and developing. (Note: The services described here mainly include living body selling, beauty bathing, etc. )
PART4 Outlook-Approaching the Step of Internationalization
Introduction: With the rapid development of the Chinese market, our pet industry is growing rapidly. However, speed is also a double-edged sword, bringing us achievements but also some problems. What is the future of the pet industry and what difficulties we need to overcome in order to move forward are issues all practitioners have to consider.
1. Development Trend of Pet Industry
Although China’s pet industry has been developing for more than ten years, it is still in the early stage of development compared with developed countries abroad. According to the analysis of the total number of dogs and cats in China and the overall number of dogs and cats, there is a serious imbalance. The actual population is far greater than the number of pets owned. Judging from the proportion of dogs owned by families in cities, Beijing is 7.5%, Shanghai is 4.5%, and the whole country is only 1.7%. According to statistics, in 2008, the total sales in the national pet (dog and cat) commodity market was about 6 billion yuan. The proportion of dogs raised in American households is 55% and that in Japan is 29.4%. Among them, the total sales volume of American pet (dog and cat) commodities in 2008 was about 19.5 billion US dollars and that in Japan was about 3.5 billion US dollars (the above data does not include the consumption of beauty and medical services). These data show the huge gap between the domestic and international markets on the one hand, and also show that the domestic market will face greater business opportunities and development space in the future. In particular, with the improvement of consumption consciousness in the future, the gradual transfer of rural areas to urbanization and the gradual increase in the number of dogs, cats and pets will further drive the rapid development of the entire pet industry. It is expected that China’s pet industry will continue to grow at 35% per year.
(1) Export-oriented enterprises will continue to switch from export to domestic market, and still cannot fully rely on the results of domestic market sales. Therefore, China’s overall pet industry market will continue to develop in an export-oriented way in the next ten years.
(2) The process of international brands entering into place step by step. As more industries integrate with the international community, the international dog industry association, international pet media, international service and product quality standards will gradually complete the process of landing in China.
(3) All kinds of industrial chains in pet media, trading market, reproduction market and other industries will develop orderly. Taking the breeding farm or kennel as an example, more specialization will be the focus of development in the next ten years. Managers engaged in kennel management will be mature and scientific in introducing excellent dogs and breeding. The promotion and awareness of pure breed dog concept in pet-raising families will make consumers more rational and scientific, thus reducing the number of stray dogs and cats. The “right dogs and cats into the right families” is the symbol of the internationalization of pet dog and cat consumption.
(4) Retailing will face the optimization process of reshuffling. Some large-scale leading enterprises will also be listed companies in the pet industry through restructuring and international capital injection.
(5) The development of domestic dog shows and pet products shows is more prosperous. It is expected that the dog show market in the next ten years will continue to focus on Beijing and expand to the whole country. The number of specialized dog shows will reach 300-500 annually. Canine International will pay more attention to the Chinese market. For example, AKC (American Canine Club), a well-known international canine organization, plans to combine some American competitions with the Chinese canine market while inviting Chinese dogs to enter the US arena. It will also cooperate with China in a wider range to establish a platform for the internationalization of the canine economy.
2. Problems Existing in Current Industry
Any industry develops from sporadic individuals and gradually grows into an industrial chain linking up the upstream and downstream. The pet industry is gradually taking shape from a marginal industry. Similar to any developing industry, there are still various problems in such an industry with a scale of 10 billion yuan. Based on the understanding of the industry over the years and the analysis of the market survey, the following problems exist in the industry:
(1) In recent years, export-oriented enterprises have to face the pressure of exchange rate changes and price hikes of raw materials on the one hand, and to maintain the price advantage of domestic export products on the other hand, resulting in decreasing profits of export products year by year and even forming a “false prosperity” phenomenon. Therefore, foreign trade enterprises in the future will gradually shift to the domestic market. However, due to the limitation of market share, the output value and output will be restricted to a certain extent. Therefore, it is necessary to start to study the sales channels in the domestic market. This is a challenge that exporters will face in the future.
(2) Due to restrictions on trade barriers, slow approval procedures for imported goods and the absence of standards for imported goods, pet foods such as dry pet food, wet pet food and health care products will still be controlled and restricted, making it difficult to enter the domestic market quickly and smoothly. Therefore, in the whole industry, the role of brand goods will be affected.
(3) Although the domestic manufacturing industry and domestic production enterprises mainly engaged in domestic sales have certain development space and potential, due to the lack of formulation of standards in the industry, some non-standard enterprises do not demand quality of goods, ignore service reputation, blindly pursue low cost, substitute inferior products for superior ones, and occupy the market by imitating and relying on low prices. However, the enterprises seeking quality are gradually eliminated due to high cost or switched to producing low-cost products, forming a vicious circle in the market, which has affected the healthy development of the entire industry as a whole.
(4) The retail trade continues the unbalanced development of the whole domestic pet market. Due to the lack of standard formulation of some pet service standards, pet shops are in an awkward situation. For example, in Beijing, pet beauty service items have not been recognized as legally operated by the Trade and Industry Bureau, including pet sales, pet hygiene, etc. There is no orderly management standard for industry and commerce and health and epidemic prevention.
As the entry threshold for the whole industry is too low, free market and a multi-functional sales window of 30 ~ 50 square meters will inevitably lead to disorderly competition. According to statistics, nearly 80% of the stores in the country are currently in a state of dismal operation. This distorted development in the industry has resulted in a serious loss of profits for the operators.
In order to attract more consumers, some retail stores that blindly rush into the industry market or set up shop out of order after the capital enters carry out malicious competition in the market regardless of the rules of the game, and even use the selling price close to cost as a gimmick to disturb the market, which will affect the orderly development of the entire industry.
In addition, some franchisees that have no industry standards, under the condition of severe lack of market operation and store operation experience, have been misled in the market, which is also restricting the healthy development of the entire industry.
(5) Although the number of distributors in the industry is increasing with the development of the market, and many high-quality representatives with the sales concept of international companies are gradually appearing, due to the limited growth space of the whole industry, the opportunity cost value cannot be fully reflected, in addition to the frequent occurrence of illegal acts such as cross-selling in the market, the difficulty of price maintenance is constantly increasing, and the failure of newly developing mature markets will cause difficulties in their own profit situation, making more distributors have insufficient confidence in operation. At the same time, due to various restrictions at this stage, imported products are scarce, causing everyone to concentrate on the competition of several brands, and the price and profit are constantly disturbed. All these have become the main perplexity and bottleneck of dealers at present.
Chapter II Sales Data of Chinese Pet Products Market I market share of major pet commodities
According to the statistics of Pet World magazine, by the end of 2008, the total sales volume of pet (cat and dog) commodities in China had reached 6 billion yuan. Among them, 40% of dry food, 16% of snacks, 8% of wet food, 7% of nutriments, 5% of sanitary products (diapers, cat and dog toilets, etc.), 3% of washing and protecting products, 3% of traction appliances, 3% of litter pads, 2.5% of clothing, and 12.5% of other products (including toys, training appliances, beauty equipment, etc.).
II. Development Status of Various Industries (a) pet food
Pet food mainly includes dry food, wet food, snacks and nutrition. These four industries account for 71% of the overall pet market, with sales reaching 4.26 billion RMB.
1. Dry food for pets (dogs and cats)
Dry pet food accounts for 40% of the market, reaching 2.4 billion yuan. Domestic brands accounted for 27.7% and foreign brands for 72.3%.
Top 5 Brands in Pet Dry Food Market (For details, please refer to China Pet Products Yearbook)
In addition, the brands with larger sales volume in the market include Al, Treasure, Nevick, Fushou, Noble, Bigtai, Developmental Treasure, Scampy, Formosa, Amoy, Benevolence, Amber, Flores, Remmier, Orvica, etc.
2. Wet food for pets (dogs and cats)
Wet pet food accounts for 8% of the market, reaching 480 million yuan. The main brands are as follows: (Please refer to China Pet Products Yearbook for details)
3. Pet snacks (dogs and cats)
Pet snacks accounted for 16% of the market, reaching 960 million yuan. The main brands are as follows: (Please refer to China Pet Products Yearbook for details)
4. Nutrition (dogs and cats)
Pet snacks accounted for 7% of the market, reaching 420 million yuan. The main brands are as follows: (Please refer to China Pet Products Yearbook for details) (2) Pet articles and appliances (dogs and cats)
Pet products and appliances mainly include sanitary products, washing and protection products, over-the-counter drugs, traction appliances, bedding, clothing, toys, etc. These industries account for 29% of the overall pet market, with sales reaching 1.74 billion RMB.
1. Washing and protecting articles
Pet washing and protection products account for 3% of the market, reaching 180 million RMB. The main brands are as follows: (Please refer to China Pet Products Yearbook for details)
2. Sanitary supplies
Pet hygiene products account for 5% of the market, reaching 300 million RMB. Major brands include Dogman, Alice, Lingyan, Teddy, Jessan, Auschwitz, NEO, Merca, etc.
3. Traction appliance
Pet traction appliances accounted for 3% of the market, reaching 180 million RMB. At present, the market is dominated by foreign brands, while domestic products have basically no brands. Foreign brands such as Fleisch and Dogman are well known.
Pet litter occupies 3% of the market, reaching 180 million RMB. At present, there are few well-known brands in this kind of market. Japan’s Alice, TOUCHDOG and other brands have high popularity. Most domestic manufacturers do not promote their own brands, and most of them sell their products under labels in their exports.
Pet clothing accounts for 2.5% of the market, reaching 150 million RMB. At present, well-known brands include ugly, ISPET, MISSPET, MOJOPET, PETWOOD, PIPIDOG, BOTH, TOUCHDOG, etc.
Original Essay，writer：Dear Pet，if wanna repost，please place references ：https://www.islandear.com/cn-pet-industry/