Online sales will account for 25% of China’s world-leading U.S.$5.69 trillion retail market by 2020, and on one of the country’s leading e-commerce platforms, Tmall Global, the pet category is the fastest growing, said Melody Shu Tmall Global pet category leader. She was the opening speaker for Petfood Forum China 2019, held August 20 in Shanghai.
That means pet care sales (including pet food) on Tmall Global grew 188% from 2016 to 2018.* Through August 2019, pet care sales on the platform are up 100% and include more than 200 brands, including many international pet food brands, Shu said.
Rising pet ownership driving pet care sales in China
Shu also provided data on China’s pet care market overall as of 2018, when it reached RMB170.8 billion (U.S.$24.1 billion), representing over 25% year-over-year growth. Products for dogs accounted for 60% of the market, with cat products at 40%, and the pet food category rang up RMB14.5 billion (U.S.$2 billion) in sales.* Similarly, consumption per pet-owning household increased 24%, from RMB4,351 (U.S.$614) to RMB 5,016 (U.S.$708).
The rise in pet care sales was driven by growth in pet ownership, which increased more than 24%, reaching 74 million: mainly city-based owners of cats and dogs. Overall, China’s pet owners in 2018 had 90 million pets, comprised of 51 million dogs (1.5 per household) and 41 million cats (1.8 per household), according to Shu. She mentioned fish owners were also growing in number.
With 731 million internet users in China – compared to 739 million in all of Europe, 326 million in the U.S. and 25 million in Australia and New Zealand – it’s not surprising that many sales, including for pet food and pet products, take place online. Tmall Global alone has 666 million mobile monthly active users, Shu said, and 46% belong to China’s new and growing (400 million people) middle class. More than 50% of Tmall Global’s customers are millennials, followed by gen Z consumers.
China’s domestic pet food production also growing
While many international pet food brands fulfill the demands of China’s pet owners, the country’s domestic pet food production is also increasing, according to Wang Jinquan, Ph.D., associate professor with the Feed Research Institute of the Chinese Academy of Agricultural Sciences, who also spoke at Petfood Forum China 2019.
In 2018, the total output of dry pet food in China was about 1.33 million tons, with a total output value of about RMB40 billion (U.S.$5.6 billion), Wang said. This volume represented an increase of 20.9% over 2017, though the growth rate slowed from previous years. Dry dog food accounted for 70% of 2018 production, or 931,000 tons, with cat food at 30%, or 399,000 tons. The growth rate of dry cat food production (13%) exceeded that of dry dog food.
According to a survey conducted by Wang’s team, more than 100 dry pet food manufacturing facilities were in operation in China in 2018, with more than 10 new plants under construction.
Shu and Wang were among a total of 10 experts presenting at Petfood Forum China. The one-day conference, attended by more than 130 pet food professionals and industry suppliers from China and throughout the world, also featured experts speaking on pet food exports into China, novel pet food ingredients such as egg protein, fibers and red algae, plus the use of social media by pet food brands, novel technology options for sustainable pet food production and the influence of nutrition and diet on oxidative stress and inflammation in dogs.
*Note: This article has been corrected to show that the RMB14.5 billion (U.S.$2 billion) in pet food sales in 2018 was for the China market overall.