What sells? The evolution of pet care in China

As hard-working young adults in China seek low-maintenance companionship, not only are cats ousting dogs as favourite pet, easy online purchasing is beating brick-and-mortar.

Move over dogs! Cats are cool 

Recently, the cat population has surged in China and is predicted to surpass the dog population by 2023. The popularity of cats can be put down to a number of reasons. First, cats are relatively more independent than dogs and demand less emotional support. This is appealing to young, busy pet owners focussed on their careers, and not on spending prime time with their pet. 

Second, cats do not need to be walked as dogs do. And third, stray cats abound, which makes finding a kitten easier than finding a puppy. 

Benefitting from this growing popularity, sales of cat-related products – such as cat food, cat litter, cat toys  – have grown rapidly in the past five years. And the future also is promising. For example, cat litter sales are forecast to maintain an annual increase of 22.3% through to 2024.  

Online sales surge 

Brick-and-mortar pet shops and the Internet are the two major channels for cat and dog food sales in China. Due to the fact that online brings benefits such as convenience, product variety and relatively low prices, stores continue to lose market share in favour of the Internet. Instead of having to carry home heavy parcels, pet owners can order multiple packs online, have them delivered within three days, while benefitting from multi-pack discounts. 

Another benefit of selling online is that the product range is not restricted by the limited space of brick-and-mortar locations. Companies can easily showcase various product portfolios. What is more, brick-and-mortar retailers need to invest in their in-store shopping experience. The related higher costs are usually offset by higher prices, making online the cheaper choice. 

The present-day, main demographic of Chinese pet owners are young people, who prefer online purchasing. This has made the Internet an incubator for emerging brands. For example, Crazydog pet food, launched in 2014, is an online-only brand that has grown rapidly to become a leading player in the Chinese market. 

Premium products – only the best for pets 

In the past few years, demand for premium products – both in terms of raw materials and functionality – has increased sharply. For instance, wet dog and cat food has grown its volume share by more than 4% in just five years and is predicted to continue to increase in the future also. Nowadays, wet food is considered fresher and more nutritious thanks to its moisture and real meat content.

Freeze-dried pet food has also gained ground since 2016, but is still niche in China. Manufacturers claim that freeze-dried food has the same nutrients and flavour of meat before it is processed. An additional benefit is that it is highly palatable, compared to ordinary dried food containing grains or other plants. Since the price of freeze-dried food is high, some manufacturers lower the price by mixing freeze-dried with dry kibble. What we also see, is that functionality has become more important: there has been an influx of products with added ingredients, like probiotics to help improve pets’ digestive health. 

Premiumisation is also changing the market for non-food pet products. In cat litter, for example, there is a growing tendency to shift from low-end bentonite litter to tofu litter. The latter is more expensive but claims to be safer. According to cat litter manufacturers, 70% of the time, cats eat cat litter by mistake. A safer, non-toxic cat litter is therefore, so they say, preferable to bentonite.

A future with even more market segmentation 

As the pet care market has matured, market segmentation has taken on a prime role. Pet food that targets different age groups or diseases – like prescription pet food – has become the norm. And specialist dietary supplements for bone and oral care have become mainstream. For the future, as owners become even more informed on pet care, market segmentation is expected to intensify. Competition will be fierce as manufacturers seek to meet the requirements of ever more demanding pet owners.

Blue
Author

Miranda Zhou

Research Analyst