Opportunities and threats in the Chinese pet market
At the same time that the negative impacts of the US-China trade war are becoming manifest, China also offers huge potential for manufacturers of high-end European pet products.
Risks and opportunities in the global market
The trade war between China and the US is now seriously impacting the global economy. Manufacturing data over September show a sharp drop in production volume in China, the US and Europe. Economists believe this downward trend will continue through to the first quarter of 2020 at least.
The decline in manufacturing activities in these three regions is a direct result of the uncertainties caused by the protracted trade war between Beijing and Washington. In addition, signs are that the global economy as a whole is in decline. While China’s manufacturing has been in the doldrums for five months in a row already, manufacturing figures for both Germany and the US dropped to their lowest levels in a decade.
As the export of products from China to the US continues to be under pressure, Chinese manufacturers are looking for new markets, one of which is Russia. At the same time, demand for ‘Made in Europe’ quality is huge. This makes China an attractive market for authentic brands with a story. So, whereas Chinese manufacturers are looking for new export opportunities, China has some great opportunities for European manufacturers.
Pet market in China continues to grow
The number of young pet owners in China is growing fast: 73% are between 20 and 35 years old, with a slight preference for cats over dogs. Having a pet can help overcome feelings of loneliness of hard-working young adults. In mega-cities such as Shanghai, Beijing or Guangzhou, even many less-well off are taking to pets to provide them with cuddly, stress-free moments.
More money to spend on pets
Overall economic development in China, has meant that millions of Chinese have been able to join the middle class, benefitting from increased purchasing power. Estimates predict that in 15 years’ time, more than a third of the population will belong to the middle class. With more to spend on their standard of living, other family members such as pets also stand to benefit.
Pet population growth in China (in millions)
Under influence of celebrities – including Angelababy, Liu Yifei and Fan Bingbing who regularly show off their pets on the social networks – the popularity of pets is also booming. Already, the number of pets across China is over 150 million!
Growing, wide and varied market
For investors, the Chinese pet market is one of the most promising. Not only is it growing, but it is wide and varied. Everything in this market has potential: from food, clothing, toys, connected accessories, medical treatments, vaccines through to grooming salons.
But the highest growth potential is for services and high-end products. Organic food, quality clothing, and pet parlours offering activities, such as spa or manicure services, are expected to be in high demand: sooner than later.