Asia-Pacific contains many emerging markets- such as China, India and Thailand. These markets are characterized by relatively low levels of disposable income and a still developing distribution infrastructure. So, the highly developed Japanese market dominates regional sales. However, the region's developing markets are catching up.
Despite the continued dominance of the Japanese market, its share of pet food and pet care value sales has been in steady decline in recent years. In 2006, Japan accounted for nearly 70% of regional pet food and pet care sales by retail value. However, in 2002 the country accounted for a more significant 75% of regional value sales. Likewise, 2006 retail value sales in Japan increased by only 2.6% from 2005, compared to regional sales growth of 4.3%.
Important developing markets like China, India, Thailand and Vietnam all saw retail value sales of pet food and pet care products increase in excess of 10% in 2006 according to the latest Euromonitor International findings. Of these, Thailand and India both counted among the 10 fastest growing markets globally between 2005 and 2006.
At more than US$735 million in sales for 2006, China remained the region's second largest market mainly because of the size of its population. However, the market has also shown strong growth - increasing at an average rate of nearly 13% since 2002 - as urbanization has increased consumer purchasing power, transformed lifestyle and boosted the development of distribution infrastructures. Consequently, China saw an increasing consumer shift from feeding pets table scraps to purchasing prepared pet food. Similar developments have also driven strong growth in markets like India, Vietnam and Thailand.
Nevertheless, it must be stressed that sales of items such as prepared dog and cat food remain very uneven across these markets with the highest concentration in major cities. But, this is changing. In China, for example, pet superstores like Cool Baby are expanding from Shanghai and Beijing to second-tier cities like Nanjing and Yantai. This will offer pet owners in such cities better access to a wider variety of products.
Factors such as this should support continued retail sales growth for the developing markets of Asia. Pet food and pet care value sales in the region are expected to grow 5% each year between 2007 and 2012.
By Lindsay Beaton
This country is straddling the line between developing and developed as more of its citizens see the value in pet ownership.
By Lindsay Beaton