The global pet care market will reach US$96 billion in sales by the end of this year, reported Clarissa Nicklaus, senior research analyst for Euromonitor International, during Petfood Forum China 2013 last week. With the market growing 4% annually each year since 2008, that means it could top the US$100 billion mark in 2014. Petfood makes up 77% of the global market, Nicklaus said, meaning sales will hit nearly US$74 billion this year.
To date, China contributes very little toward these impressive numbers. Its overall pet care sales will make it past US$1 billion just this year; and unlike in the rest of the world, pet products dominate in China, with petfood comprising only 37% of pet care sales.
Yet sales in China are growing rapidly, according to Nicklaus, at least 10% a year. Dog food sales alone have exceeded that growth rate annually since 2008, while cat food sales have averaged over 8% growth a year. From 2013-2018, China will continue to rank among the eight fastest growing pet care markets, Nicklaus said, adding about US$600 million in retail sales during that period.
What's more, the potential for further petfood growth in China is high. Currently only 7% of Chinese households own dogs and only 2% own cats. Nicklaus reported. And less than 10% of those households feed commercial petfood to their pets. Also, among the types of petfood sold in China, premium products are growing the fastest, with premium dog food increasing 15% a year and premium cat food at about 12% a year.
It's also worth noting that while the percentage of dog and cat ownership is low in China, there are still 51 million cats and dogs owned there, placing the country third worldwide, just behind Brazil at 52 million. (The US ranks number one at almost 170 million.) Actually, because so many households in China own smaller pets, such as small mammals and fish, the total number of pets owned is a whopping 290 million, Nicklaus said.
Nicklaus was just one of eight speakers addressing more than 100 attendees to Petfood Forum China 2013 (plus one mouse, presumably a resident of the Shanghai World Expo center, where the conference was held). Most attendees came from China, plus other countries throughout Asia such as Thailand and Korea, and seemed very engaged in the topics, posing several questions to nearly every speaker. Other topics covered market research on pet owner buying decisions, microbiological safety in a petfood plant, saving energy in petfood drying and the latest research on nutrition for skin and coat health in dogs, digestibility of proteins, the impact of kibble characteristics on palatability and krill as a beneficial and sustainable petfood ingredient. (Video clips of the speakers will be available soon on PetfoodIndustry.com.)
In its second year, Petfood Forum China was again held in conjunction with Pet Fair Asia, which experienced its own growth; its exhibits expanded so much that it needed to add a second hall. About 30% of the exhibitors were petfood companies, according to VNU Exhibitions Asia, organizers of that show. While many of these were multinationals, the number of domestic companies from China also expanded, with names such as Beijing Big Time Petfood Co., Taiwan Karoko Cola Pet Food and Supreme Treasure. Local suppliers of packaging and equipment were on the scene, too.
As part of Pet Fair Asia, the International Pet Industry Summit
, held August 21, covered pet care retailing, particularly e-commerce. One of the most interesting speakers, in terms of petfood, was a representative from Taobao.com
, two Chinese online shopping portals apparently owned by the same company. She reported that currently, only 0.1% of sales on Tmall.com are for pet products, with dog product spending reaching 270 RMB (US$44) monthly and cat product spending at 190 RMB (US$31) monthly. In a 2011 survey, 64% of Tmall pet care buyers rated the brand as the most important reason for their product choices.
The Tmall representative also showed a video from Mars Petcare China, which included interesting data such as:
- The company has a 37% penetration into the dog food market in China and sells 4 million RMB (US$653,531) in dog food (annually, I believe).
- Cat food market penetration is at 45%, with 2 million RMB (US$326,766) in sales.
- In urban areas, one of every five Chinese households has a pet, while one in nine has a baby; 90% of pet owners say their pets are part of family.
With information like that, it's easy to see why this pet care market is booming.