They Don’t Eat Dogs!
It seems like every time I travel home, I’m asked all kinds of strange questions about China. But without fail the conversation always turns to food and then the craziest question I have ever heard: Do they eat dogs?
Despite having the second largest economy and some of the largest and most modern cities in the world, for some reason people still think that Chinese eat dogs. They think that the KFCs, McDonalds, and Starbucks, on every corner, are serving up hot dogs (not the American kind). This is just wrong. So, what are they doing with the dogs?
Chinese Pet Care Industry Overview
The Chinese are pampering, spoiling and spending billions of dollars a year on their “second child.” How much are they spending? According to Bloomberg, Chinese pet owners are spending a record $1.2 billion dollars a year on pet care (mainly dog care).
In an article titled China Poodle ‘Babies’ Spur $1.2 Billion Pet-Care Market, Bloomberg reports: “About 33 million households in China keep a cat or dog, according to Euromonitor. Expenditure on pet care will reach 7.84 billion yuan this year, a 46 percent increase since 2007, the London-based consumer researcher said. It predicts the market will increase a further 64 percent by 2017, with 12.9 billion yuan splurged on pet food, health care and dietary supplements.”
By 2017 the market value is estimated to reach $2.15 billion dollars. What is spurring all this growth? The government’s one child policy is a major factor along with an increase in disposable income. The one child policy levies heavy fines on any family that births more than one child (it’s not quite that simple, but for this report that’s all you really need to know.)
With most families unable or unwilling to pay the fines many are buying dogs or other pets and treating them like a second child. All the money, time and energy that would have been spent raising a second child is now spent on raising a pet.
Chinese Pet Care Industry – Now
The recent food scares in China have caused many mainlanders to seek international food brands. The growing middle class now has more money to spend on imported products and they are becoming more health conscious. This growing concern is not stopping at the dinner table, many households are now more conscious about what type of food they feed their pets.
Reports about pet food from China not containing meat products or killing pets is causing great concern about the safety and regulatory practices in China. We will continue to see a consumer push to improve regulations and until regulations are improved we will see many consumers looking for trusted foreign brands.
Other trends in pet care are accessories. It is starting to get cooler in the evening and many dogs can be seen sporting their fall outfits. Dog clothes is a major trend in China. Everything from shoes to hats, if you can put it on the dog, you can buy it. The pet shops are full of outfits for any sporty dog and some markets have stalls fully devoted to dog clothes.
Chinese Pet Care Industry – Market Growth
According to Euromonitor International, “With greater demands of convenience for pet owners and increasing humanization trend towards pets, the prepared food percentage is expected to be higher over the forecast period than over the review period. This means that more households will switch from home-made food to prepared food for their pets.
In addition to the positive impact on pet food sales, these demands will also drive pet products like pet dietary supplements, pet clothes and pet toys to record stable growth. Thus, in line with the rising disposable income and consumer conceptions of pet care products, pet care is expected to record robust growth over the forecast period.”
We can expect to see growth at around 9 percent in the next few years, compared with 6 percent in the United Kingdom, 4 percent in the United States and 3 percent in France. We can also expect growth in breed-specific food. “The premium segment keeps on outperforming in pet care in China as on one hand, healthy ingredients with high quality are the key consideration for pet owners whilst on the other hand, specific segments like breed-specific food are needed.”
Chinese Pet Care Industry – Final Thoughts
Recently, I adopted a cat and I am slowly forking over RMBs. I noticed that most shops are local and no major brands (i.e. Petsmart) have penetrated the Chinese market. Petsmart is known as Lee Pet (interview with the Beijing GM) in China, but due to the Chinese buying habits there doesn’t seem to be one major player in the Chinese Pet Care Industry.
This leaves the field open for growth and more research needs to be done but with a 64% increase in the next few years. Now is the time to make a move. Well, you should have already made your move, but there is still time and great growth opportunity.
Other reading about the Chinese Pet Care Industry: