Half a year of relentless pro-democracy protests in Hong Kong have hurt its pet market’s growth prospects in terms of population count and consumer spending on pets.
December 2019 data from the Hong Kong Census and Statistics Department cast a very gloomy scenario for the retail sector that covers all establishments with sales coming from physical and or online shops. This latest government audit of the retail sector includes businesses selling pet products like food and toys, but it doesn’t include sales related to pet services.
Hong Kong’s total retail sales value in October 2019, provisionally estimated at US$30.1 billion, decreased by 24.3% compared with the same month in 2018. After measuring sales receipts from different types of retail outlets during the period, the statistical body reported that sales of almost all kinds of products in Hong Kong, from premium to commodity items in department stores, dropped considerably. Pet food, which would be among “other consumer goods, not elsewhere classified,” registered a -23.3% decrease in sales.
Only fuel (+4.5% in value) and commodities in supermarkets (0.5%) posted conservative growth during the period.
Fewer pets to feed in Hong Kong
Meanwhile, the census department also lowered the number for its projected pet population for 2019. After conducting a household survey in June 2019, the agency’s new estimates put Hong Kong’s pet population at 405,200. The earlier projection was 545,600 for 2019.
Latest data from a different government agency, the Agriculture, Fisheries and Conservation Department, estimated that 11%, or 264,000 of the total 2.4 million households in Hong Kong, presently keep a pet dog or cat. However, the Census and Statistics Department’s latest survey found only 9.4%, or 241,900 households, have pets at home.
With fewer pets to feed, earlier sunny pet food sales forecasts are bound to be readjusted. Statista, an online statistics, market research and business intelligence portal, said most recent projections have Hong Kong’s pet food demand increasing at a 5.8% compound annual growth rate from 2019-2021, with a 2019 average pet food per capita consumption at 8.1kg. In total, these figures translate to pet food revenue targets of US$157 million, mostly going to US pet food companies.
The protests combined with the effects of the ongoing trade war between the US and China have severely depressed consumer spending in the former British colony. As locals spend less and tourists stay away, the government’s forecast for economic growth this year is almost zero at best.