After more than a decade of steady growth, China's pet market has faced various complex challenges in recent years. From the uncertainty of the epidemic to the turmoil caused by high inflation and rising interest rates, China's pet market has been like a roller coaster.
Together we will explore the pet trends worth paying attention to and gain a deeper understanding of the direction of the pet market. You are also welcome to discuss in the comments section.
1.The impact of inflation on pet owner spending
“The impact of the epidemic obviously did not end with the abating of the COVID-19 pandemic. One of the most unpleasant surprises in the post-epidemic era is the surge in inflation. Much of the growth in the past two or three years is related to inflation.
Based on changes in the Consumer Price Index, the inflation rate for all pet market categories in 2022 and 2023 is two or three times that of previous years. It seems that all major platforms are competing at low prices, and brands are also launching cost-effective products. If you compare the prices of a few years ago carefully, you will find that the goods have increased a lot in price.
In the past, premiumization was the main driving force of the market, but inflation has further raised the standards, triggering a "storm of affordability concerns."
In order to get pet owners to buy higher-priced products in the future, pet marketers must emphasize the value of the product and provide compelling pet health benefits.
2.Economic challenges facing young pet owners
Young pet owners are critical to the future of the pet industry. As more and more baby boomers age and eventually give up pet ownership, the entry of the younger generation into the market is critical to maintaining a stable level of demand.
However, young consumers face significant barriers to keeping pets.
Credit Tightening: With Baby Boomers and X Younger pet owners are more likely to have credit card debt than older generations. Younger pet owners are also more likely to live paycheck to paycheck and adopt a buy now, pay later strategy. Lack of disposable income makes the cost of owning a pet a challenge.
Microloans: Microloans also have a significant impact on disposable income. About 10% of pet owners have microloans, such as Fenqi Le, Jiebei, etc., while this proportion rises to 15% among millennial pet owners. As these consumers struggle to cope with the burden of microloans, they may reduce their purchases of non-essential items, switch to low-cost brands, and seek alternatives to expensive veterinary services.
Housing pattern: Dog ownership is closely related to housing type. Homeowners are 68% more likely to own a dog than renters. In the current economic situation, it is becoming increasingly difficult for young people to own their own homes due to high housing prices, high pressure to buy a house, and increasing rental costs. This may have a negative impact on the pet market, resulting in fewer and fewer families with dogs.
3.Turning to low-cost pet products and services
While many consumers are looking to save money, it’s worth noting that pet owners don’t want to sacrifice quality to save money.
Pet Talk Survey Results - Reasons to Buy
In March 2024, Pet Talk surveyed pet owners, and the results showed that 71% of pet owners consider product quality as the primary consideration when deciding what to buy. 61% of pet owners said that value for money is almost as important, while only 36% of pet owners said that low price would affect their purchase.
In order to save money, some pet owners choose to buy lower-priced pet food brands. The survey results show that among pet owners who have changed pet food in the past year, 32% of dog owners and 28% of cat owners chose lower-priced brands.
Following this trend, the use of private label products is also increasing, creating huge opportunities for the pet market. "From a global perspective, China's private label usage rate is still far lower than that of most European and American countries. From this perspective, there are still many opportunities for establishing white-label brands, pet stores, and pet training schools to establish their own brands.
4.Declining dog population
"The trend of flat or even declining dog populations has weakened some of the cornerstones of the pet industry's actual (excluding inflation) growth. Many businesses, such as pet washing and care, are dog-oriented, but now due to the generational shift in pet ownership, the cost of pet ownership, and the overall slowdown in China's household economy. Young people are gradually turning to cats, resulting in slow growth in the dog market.
Looking at the overall pet market, when pet food production brands make a new product, a series of cats and dogs accounts for half, or two-thirds is cat food and one-third is dog food, or even no dog food in a series.
5.Technology-integrated pet care and veterinary services
Technology is revolutionizing pet care. Popular tools such as pet wearables, GPS trackers, smart feeding devices, and health monitoring apps are increasingly becoming part of pet owners' toolkit to protect their pets' health.
At the same time, technology-driven veterinary clinics are reshaping veterinary technology. These advanced clinics incorporate various technologies such as mobile clinic apps, online appointment booking, AI support, and remote diagnostic tools. The growth in technology integration, driven by increased funding and collaboration, is setting a new standard for veterinary care.
As this trend develops, more veterinary clinics are expected to adopt these cutting-edge methods, paving the way for a more technologically advanced approach to pet health.
6.Personalized pet diets
The trend towards personalized pet nutrition is gaining momentum. Pet owners are increasingly opting for customized diets, including custom pet food subscriptions and diets specifically formulated for their pets’ unique health needs, breed, or age group, such as pet baking, pet fresh food, etc.
A whopping 88% of pet owners believe that it is important to take preventive health measures for their pets. In addition, the 2022 FMCG Gurus report shows that 40% of pet owners worldwide rely on specialized pet food to enhance their pets’ health.
7.Focus on pet health and wellness
There is a growing focus on pet health and wellness, which has expanded from physical care to mental health. This shift has spawned a plethora of products and services designed to improve the lives of pets, from anxiety-relieving items to various supplements and even specialized pet therapy services.
The global CBD (cannabidiol) pet market, in particular, has seen significant growth. According to Grand View Research, the market is valued at approximately $195.98 million in 2022, with a projected compound annual growth rate (CAGR) of 31.8%. This growth is in part due to promising research, such as a groundbreaking study conducted by Cornell University.
The study revealed that CBD can play an important role in pain management, especially for dogs with osteoarthritis. Notably, more than 80% of the canines participating in the study experienced a reduction in pain, resulting in improved comfort and increased mobility.
8.Mobile Pet Services
Mobile pet services have revolutionized convenience for busy pet owners. The trend includes mobile grooming, veterinary services, and pet sitting, all delivered directly to customers' homes, which is labor-intensive but can enhance competitiveness in today's highly involuted environment.
In the pet boarding sector, dog boarding leads the way, accounting for a significant revenue share of 54.2%. Subscription dog toy services are becoming increasingly popular among dog owners, which has also stimulated the market demand for animal toys.
The emergence of a large number of dog sitters and the expansion of service scope by market players to cater to more animal types, such as dogs and other pets, has further promoted the growth of mobile pet services.
9.Pet-friendly travel and accommodation
The trend of traveling with pets has increased significantly, driving the growing demand for pet-friendly travel options and accommodation. This surge has led to the emergence of pet-friendly hotels, pet-centric airline policies, and vacation plans specifically for our four-legged companions.
According to data from Huajiantang, more than 40% of the orders for this year's May Day holiday included "cute pet guests", of which 30% were traveling with one dog or one cat, and 10% were traveling with more than two pets. Wan Zhong, general manager of Chengdu Shili Huajiantang Daoxiang Hotel, said that about 50% of guests brought their pets to stay during holidays, and 25%-40% on weekdays and weekends. Another pet travel company revealed to Pet Jing that it has received more than 1,000 fur children in the first half of this year.
10.Pet service expansion
The pattern of pet services is surpassing traditional services. The surge in niche markets, such as professional services such as pet photography and pet party planning, and even pet dating platforms, highlights people's growing recognition of pets as family members.
For pet stores, expanding services is also an important measure to enhance competition. For example, learning pet baking, providing milk tea and coffee and other services to enhance the competitiveness of pet stores.
FAQs about pet industry trends
What is the most in-demand pet?
The most popular pet in the world is usually dogs, followed by cats. But in China, cats have gradually surpassed dogs to become the most popular pet.
Why is there such a high demand for pet products?
Due to the rapid growth in the number of pet owners and the general trend of treating pets as family members, high-quality care and products are required, so pet products are in great demand.
What is the biggest pet business?
The pet food industry is the largest segment in the pet industry, generating billions of dollars in sales each year. This is attributed to the basic needs of pets for nutrition.
What do pet owners buy most often?
The main product purchased by pet owners is pet food; however, health, wellness and beauty products are also major categories with stable sales.
Which age group buys the most pet products?
Millennials, typically those in their 20s to 30s, are the age group that purchases the most pet products, reflecting their strong connection to their pets and their spending habits.