Two trends are changing the pet food industry in China: the strong emergence of gourmet products, and the increasing popularity of online retailing.
China’s economy has shown steady growth over the last decade, from a GDP (gross domestic product) per capita of US$1,498 in 2004 to US$7,594 in 2014. The GDP annual growth rate over the past several years has hovered around 7.5%, with occasional jumps even higher—reaching just over 10% in 2010, according to the World Bank. Unsurprisingly, then, the annual per capita disposable income of urban households in China has also grown, from CNY15,781 (US$2,479) in 2008 to CNY28,844 (US$4,531) in 2014, according to Statista data.
Chinese consumers are beginning to seek out healthier and more expensive pet treats. Pet ownership has grown steadily in the past five years, with pet food sales doubling in that time.
According to Euromonitor International, sales of dog and cat food in China will increase 10.65% to CNY4.57 billion (US$700 million). Mintel estimates that sales of dog and cat food in China will grow to CNY7.1 billion (US$1.09 billion) by 2020.
Online pet food retailers have the potential to emerge and the second-largest distribution channel after physical stores, according to Euromonitor.
A baker holds a pet birthday cake made for her customer's dog in Changchun, Jilin province. It takes the baker about three hours to make the cake, priced around 100 yuan ($15).
Pet owners want a lot from their pet food brands. They want primary proteins that suit what they believe is best for their animal. They want grains or they don't. They want something customized, but it has to be easy to understand.
Constraints and crises, like those experienced in 2020, help drive innovation and sustainability offers context.