Could China’s pet food industry hit $33 billion by 2025?

A new forecast from Chinese research company iiMedia concludes that the country’s pet food industry could be worth as much as $33 billion (€30B)‎ by 2025.

The same research explains that this growth is driven by the demand and the scale of China’s pet economy. Pet food has become more advanced in the Asian country, with functional pet food being more refined and diverse.

Wang Xiangqian, Executive Chairman of the China Feed Industry Association’s pet food division, was quoted in local media saying the number of pet food business licenses in China has increased dramatically since 2018.

According to the trade association, the number of pet food manufacturers in the Asian country has tripled over the past 5 years to nearly 400, and their annual output has increased by 50% to 1.2 million tons.

Is this a realistic figure?

“I would say $33 billion is quite realistic,” admits Antonello Germano, Marketing Manager at market research firm Daxue Consulting.

China’s pet industry is following macro market trends, such as a spike in e-commerce shopping and an increasing demand for premium pet foods. Recently, the country has seen some major investments by international players.

However, compared to other big markets, the situation “is still quite different because pet penetration is still low compared to the US,” Germano suggests, pointing out that this is a challenge the Chinese industry faces.

Despite the penetration rate being one-third of the European and American markets, pet parents’ consumption level in the Asian country is comparable to that of those countries.

A pet industry white paper from 2022 indicated that the annual consumption per pet in Chinese households was $286 (€‎257). This is 6.73% of the total household expenditures compared to 1.71% of US household expenses.

Aging and functional pet food

China’s aging population seeking animal companionship is considered another factor.

“In many cases, the older generation of Chinese have only one child, leading to an increased emphasis on treating pets as surrogate children,” reads a recent report from the United States Department of Agriculture (USDA).

Societal trends such as millennials marrying later mean they place “greater importance on pets as family members.”

China’s largest online retailer, JD, recently noted that the search volume for functional pet food keywords on its platform rose by 80 times the amount compared to 2022. Furthermore, searches on its internal platform for probiotic cat food increased by 200%.