Frost & Sullivan: Chinese pet owners spend an average of RMB3,969 per year

The booming Chinese pet industry is now attracting worldwide attention

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Apr 02, 2019, 23:58 ET

SHANGHAI, April 2, 2019 /PRNewswire/ -- Today, Frost & Sullivan (hereinafter referred to as "F&S"), the world's largest growth consulting firm, released the "2018 China Pet Industry Report." This is the first time that F&S has released a report on China's pet industry. Prior to that, the authoritative data cited by listed companies such as PetSmart, a leading chained-brand in the U.S. pet industry, was also from F&S's research report.

The report has four parts, including the overview of China's pet industry, the portrait of consumers in the industry, the consumption of pet products, pet service and the consumption of live pets in China. The report fully shows the latest development of China's pet industry in 2018.

The Proportion of Pet Owner Households Has Increased to 22% in China

According to F&S's report, the number of pet owner households has increased from 69.3 million in 2013 to 99.8 million in 2018, showing an increment of 43.9% over the past five years. The penetration rate of household pet ownership in China has also grown from 16% in 2013 to 22% in 2018.

By the end of 2018, there were approximately 67 million pet cats and 74 million pet dogs in China. The annual sales of live pet cats and dogs were over 5 million, excluding the adopted and donated ones. In addition to cats and dogs, Chinese pet owners also keep 110 million other animals, including 84 million fish, 9 million birds, 7 million reptiles, 7 million rodents, etc., showing the various interests of Chinese pet owners.

The Market Size Reached RMB172.2 Billion in 2018

The market size of China's pet industry reached RMB172.2 billion in 2018, more than three times as the market size of RMB49.4 billion in 2013.

The market size of pet dogs was RMB98.5 billion in 2018. Pet food, including staple foods, snacks and health products, was the largest segment in the market with a revenue of RMB38.3 billion; the market size of vet care, pet supplies, pet service including grooming, boarding and other services, and live animal purchase was RMB19.8 billion, RMB15.1 billion, RMB15.6 billion and RMB9.7 billion, respectively.

By 2018, the market size of pet cats reached RMB60.2 billion. The segments of pet food, vet care, pet supplies, pet service and live animal purchase was RMB22.3 billion, RMB12.4 billion, RMB8.7 billion, RMB8.5 billion and RMB8.3 billion, respectively.

Industry experts generally believe that the pet industry in China will further develop along with the growing number of pets and increasing purchasing power of pet owners. It is estimated that by 2023, the market size of the China's pet industry would reach RMB472.3 billion.

Average Annual Spending on Each Pet Cat or Dog Was RMB3,969 in 2018

The living standard of pets in China has been gradually improving in recent years. According to F&S's report, the average annual spending of pet owners on each pet cat or dog was RMB3,969 in 2018.

Specific to pet dogs, the annual average spending on each pet dog in 2018 was RMB4,723, of which RMB2,040 was spent on food, RMB800 on supplies, RMB1,055 on vet care, and RMB828 on other services.

In 2018, the annual average spending on each pet cat was RMB3,117, of which RMB1,340 was spent on food, RMB525 on supplies, RMB742 on vet care, and RMB510 on other services. In comparison, the cost of raising a cat is lower than that of raising a dog.

Pet Owners in China Show the Characteristics of "Three Highs and One Low"

According to the report, pet owners in China usually have characteristics of middle-to-high income level and an advanced degree, and are middle-to-high class and younger in age.

Specific to gender, the gender ratio of China's pet owners was about 4:6 in 2018. Regarding the age distribution, 2% of the pet owners were born after 2000; 48% of pet owners were born after the 1990s; 35% of pet owners were born after the 1980s; 10% of pet owners were born after the 1970s; and 5% of pet owners were born before the 1970s. Obviously, young pet owners have become the mainstream, driving the development of China's pet industry in recent years.

Different from the "stereotype" of "single people are more interested in raising pets", F&S pointed out that 61% of pet owners in China are married, and only 39% of them are single. The percentage of married pet owners that are not living with their parents was 43.8% in 2018. The fact shows that although pets are able to keep single people company, a stable economic foundation is still needed for raising pets.

In terms of the income level of pet owners, more than one-third of pet owners have an average monthly income of more than RMB10,000. Pet owners that have an average monthly income of over RMB15,000 accounted for 12.8% of all pet owners, while pet owners that have an average monthly income between RMB10,000 to RMB14,999, pet owners that have an average monthly income between RMB5,000 to RMB9,999, and those with monthly income below RMB5,000 accounted for 21.5%, 39.5% and 26.2%, respectively. The number of owners with a high level of income and stronger ability to guarantee a certain living standard for pets is gradually increasing.

In addition, the report pointed out that pet owners with a bachelor's degree and those with a master's degree or above account for 65.5% and 5.8% of all pet owners. Meanwhile, pet owners that are company employees, management level staff and public institution employees accounted for 29.1%, 23.1% and 14.2% of all pet owners. An advanced degree and stable career will make it easier for pet owners to accept new and healthy concepts and habits of raising pets.

89% of the Pet Owners Buy Pet Products Online

Unlike pet owners in Europe and the U.S., who prefer to buy pet products offline, online consumption has become the major channel for Chinese pet owners.

According to the report, 89% of pet owners have purchased pet products online. The major factors are quality guarantee, a wide range of products, high discounts, promotions and convenience.

Among all the pet products consumed online, pet staple food is an inelastic demand. Around 88.5% of pet owners choose to buy staple food online. Pet snacks, daily necessities, travel equipment, vet care supplies, pet toys, pet grooming supplies, pet medicines and health care products, and live pets followed pet staple food on the list.

When purchasing pet staple food, 71.7% and 61.6% of the pet owners give priority to whether the raw materials and ingredients of staple foods meet nutritional needs and whether the food is easy to digest, showing that pet owners have paid special attention to the nutritional ingredients of pet food.

As for the frequency of purchasing staple food, 61.5% of pet owners buy staple food 6 to 12 times per year. Obtaining nutrients such as protein through professional staple food has become the main lifestyle for pets in China.

In addition to purchasing pet products online, some pet owners also choose to buy pet products in offline stores. About 55.4%, 50.8%, and 47.4% of the pet owners choose community pet stores, chain pet stores, and hospitals, respectively, to purchase pet products. The main considerations for pet owners to choose offline stores are a better shopping experience and a variety of services, such as boarding service, grooming service, etc.

Meanwhile, offline trading dominates the live animal purchase since pets are shown directly and "physically" in offline stores. 46.4% of the pet owners bought their pets from offline pet stores, and 34.3% of them received pets as gifts from friends.

Among all offline consumption, about 78.4% of pet owners have purchased vet care, 76.1% have purchased pet grooming service, 42.2% have purchased boarding service, and 27.3% have purchased pet training service. Due to the restrictions on raising dogs in urban regions and frequent conflicts between people and pets, pet training service, which may reduce the possible contradictions in public places, is expected to become a compulsory service for pet owners.

SOURCE Frost & Sullivan