China: A growing industry with the promise of new consumer trends

Pet food and accessories is one of the most strategic fast-moving consumer goods (FMCG) markets in current-day China. Far from slowing down, the industry continues to grow. A wider product range and robust offline sales characterize the playing field.

Excellent forecast for pet food market

China’s overall pet food market grew from $719 million to $6.72 billion between 2010 and 2020.

Euromonitor forecasts that in just 5 years, the industry will grow by 103%, from $8.23 billion in 2021 to $16.77 billion in 2025. And research conducted by Deloitte concludes that pet food sales are expected to more than double to $16.35 billion by 2026.

Pet food represents most of the market share (40-45%), followed by pet services (20-30%) and accessories and medicines (20-25%).

Pet population – some facts and figures

In 2021, the number of urban dogs and cats in China reached 112.3 million – 54.3 million dogs and 58 million cats – an 11.4% increase compared to 2020.

Most dogs in China (50.3%) are between 1 and 5 years old, followed by those of 5 years or more (37%) and puppies (12.7%). The proportion of cats younger than 2 years is the highest (56.9%), followed by those between 2 and 6 years old (34.1%).

Most pet owners (43.9%) live in medium-sized cities, followed by large metropolitan areas (33.5%), such as Beijing, Shanghai, Guangzhou and Shenzhen. Pet owners living in small cities account for 22.6% of the total number of pet owners in China.

With ongoing economic development fueling consumer spending, it is likely that more people will become pet owners, with a resulting huge pet market sales potential for the near future.

More cats than dogs in the cities

Deloitte’s recent study points out that, due to the fast pace of urban life, small living areas and strict restrictions on keeping dogs in the city, the number of cats is increasing rapidly.

As a result, in 2021, cat food represented 52% of China’s pet food business. Deloitte expects this will increase to 60% in the coming 3 years.

Consumer behavior

Chinese consumers are considered very mature and always open to learning more about the products and brands that they purchase for their animals.

As a result, functional pet food is gradually gaining traction among Chinese pet owners. Simultaneously, product offerings in this category are becoming more refined as well as diversified. According to Deloitte’s research data, the most important determinant for pet owners to buy staple food is the nutritional ratio, accounting for 55.1% of pet food sales.

Social media plays a key role in decision-making processes among Chinese pet owners. The content output of these platforms greatly affects most pet owners’ beliefs regarding pet consumption needs and requirements.

Consumer education is also driving the industry. A recent study by PricewaterhouseCoopers (PwC) concluded that education is impacting all stages of pet ownership in China. Consumers appear to rely on both online and offline channels to keep informed on pet care. And while online has been the epicenter of such knowledge, the offline channel is now gaining in popularity as a source of information. Some local brands are training their representatives to become brand ambassadors to educate pet owners about product claims.

According to Deloitte, there were 63,000 pet stores in China in 2021 and the number is expected to raise by 8% to 93,000 in 2026.

Pet food made in China

According to the China Feed Industry Association, there are 200 certified pet food manufacturers nationwide. Together they produced 1.12 million tons of dog and cat food in 2021, an increase of 17.3% compared to the previous year. 

A total of 23 provinces and regions produce pet food, with some differences between the various areas. The northern province of Hebei – the sixth most populous in China – is still the largest producer of pet food in China, with over 429,000 tons per year, followed by Shandong Province (268,000 tons) and Shanghai (117,800 tons).

Pet food imports

China’s pet food imports have maintained a steady growth of nearly 30% since the beginning of the pandemic. According to official figures, pet food accounted for 2.2 million tons ($5.9 billion) in 2019, with slight increases in 2020 (2.4 million tons, $7 billion) and 2021 (2.8 million tons, $8 billion).

China’s General Administration of Customs (GACC) reports that most imports in 2021 came from Canada (47%) and the United States (20%).

Up to now, 356 overseas pet food suppliers have been approved to export to China. Most of them (121) are from New Zealand, followed by the US (80), Thailand (33), Germany (21), Italy (16) and Spain (13).

Heavily regulated industry

In recent years, the Chinese government has issued several policies related to the pet food industry to help keep tabs on pet food imports and domestic pet food production. In 2018, a number of regulations on pet food management, labeling regulations, hygiene regulations and production licenses were issued.

There are 12 national standards – developed by the Chinese National Standardization Administration Committee – which regulate the industry. The country also has 16 industry standards issued by the different ministries in the Chinese State Council.

In addition, there are 15 local standards implemented by the standardization management departments under the government of each province in China. Finally, there are also 30 group standards that specifically cover China’s pet industry.