Health Economics in China’s Pet Food Industry

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 China’s pet industry began to take formal shape in Nineteen Nineties, when the Ministry of Agriculture approved the establishment of the China Small Animal Protection Association (CSAPA). Since then, pets have began to tackle a significantly higher profile. They were once not more than an animal within the backyard; starting a couple of decade ago, they began to turn out to be a part of the family. The establishment of pet stores with skilled pet supplies sales and services represented by the Shanghai Naughty Family further fueled the rise of pet-centered consumption.

At the start of the 2000s, the market saw a latest era of competition. A bunch of foreign pet brands entered the Chinese market, one after one other, all carrying expectations for the massive upside space of the Chinese pet industry. This not only put pressure on domestic pet brands but in addition served as a motivator for the event of China’s pet industry. 

As Chinese consumers’ disposable incomes and consumption levels continued to rise at a stable pace, the variety of pet owners also showed an upward trend – it reached 68.44 million in 2021, based on a Chinese Pet Industry White Paper. The trend towards living alone – partly because of the younger generations marrying later and later – and an ageing population are further boosting the expansion of this furry bonanza. 

All in all, the last 30 years have witnessed the soaring development of the pet industry. Amongst which, the pet grocery store is currently the most important segment in addition to crucial competitive market inside the industry because of its high-frequency and high-need consumption attributes.

 

A diversified pet grocery store 

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With the continual improvement of consumer awareness of science-based pet ownership, pet food just isn’t limited to the standard concept, but it surely consists of quite a lot of elements akin to staple food, nutrition, snacks, amongst which there are also diversified components. Driven by the pursuit of high-quality functional and refined products, higher ingredients are coming to the fore: baked food, raw bone meat, freeze-dried meat and other attractive products are all latest trends for pet lovers.

As well as, with regards to meeting the diversified needs of pets, specialized pet food pet has been making its presence felt lately. Mr. Himi (Chinese: 黑米先生), an up-and-coming local pet food brand, is one in every of the leading players. It focuses on steamed fresh food without the addition of any preservatives or food attractants, and advocates a customized dietary program to supply complete-nutrition food. Its co-founder and Chief Operating Officer Sarah Zhou told EqualOcean that an increasing number of people are actually making pet staples on their very own, which not only aids pet health, but in addition promotes human-pet interaction and deepens their mutual bond. This can be a round proof of pet owners’ high quality and scientific feeding philosophy. “Those pet lovers are also our goal consumers,” she added. 

 

Causes of pet food consumption upgrade

First, the youth group is becoming the foremost consumers of the pet market, and their consumption patterns have a positive impact on pet consumption. When it comes to the patron demographics, 70% of pet owners are women – a far higher proportion than men – and nearly all of them live in Tier 1 and Tier 2 cities. As white-collar employees, they are sometimes willing to spend and doting) on pets, which hence drives the upgrading of pet food consumption and the event of varied pet industries.

Second, the role of pets has evolved. According to[sl1]  third-party research, in the primary quarter of 2021, 37.1% of Chinese pet owners considered their pets as their best friends, 23.5% as their children and 17.1% as their relatives; that’s to say, nearly 80% of pet parents regard them as a part of their relations and have a more in-depth emotional reference to them. Only around 20% of homeowners perceive that “a pet is only a pet”. From this attitude, it’s natural for people to supply the perfect quality products —various sorts of dietary and revolutionary food for instance — for his or her relations, they usually are sometimes reluctant to make major changes if their animal is prospering and feels good, unless there’s a major economic hardship.

 Third, there was a shift in consumer psychology. Up to now, when the pet industry was in its infancy, consumers didn’t pay that much attention to the ingredients of the pet food they purchased or whether the dietary contents met high standards; nonetheless, this just isn’t the case nowadays. Pet owners are more inclined to feed their pets in a more scientific strategy to further improve their physiological and psychological state and extend the lifetime of their pets.

 

Trinity of pet food ‘Health economics’ 

Health economics, within the broadest sense of the word, sees health firstly as a type of wealth. Within the pet industry, while the high cost of pet medical care continues to be a significant stress to pet owners, most young people imagine that the upgrading of pet food consumption can, to a certain extent, avoid the occurrence of significant pet diseases. In spite of everything, the expenditure on high-quality pet food and nutrition is only a drop within the bucket compared with the high cost of medical treatment. 

 Based on this, a growing variety of pet food enterprises are scrambling to launch food products for pets that may satisfy their physiological needs, healthy needs and emotional needs — a type of trinity within the pet food industry.

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Firstly, pet consumers’ concern in regards to the physiological needs of their pets is the bottom but essentially the most significant consider the pyramid chart – e.g. easy staple foods which help pets grow. As a necessity for pet feeding, pet staple foods are occupying and can all the time occupy a significant share of the pet grocery store. Nonetheless, despite some firms presenting an up-to-standard table of ingredients, consumers still worry about quality, as ‘puffy’ staple foods make it not possible for consumers to see the main points of the products. “They (consumers) only wish to imagine in what they see, and our products exactly fulfill their demands,” Sarah told EqualOcean in an interview. 

 Secondly, when basic needs are met, pet owners generally turn to focus more on their pets’ health by providing them with pet nutrition products akin to fish oil and vitamins, as a complement to the staple diets. It is not any longer limited to easy satiety, but in addition features within the pet’s immune system, bones and joints, brain, heart, dental care and others. In other words, pet dietary food is progressively approaching the usual of human health care products, becoming an increasing number of refined and diversified. Under the influence of the expansion of the pet market and the change within the concept of pet ownership, there is a large value within the pet nutrition industry. 

 Lastly, pet ownership has entered the extent of Maslow’s emotional needs, the next order of needs above physiological and healthy needs in this text. Owners buy snacks to please their pets, select the best food for his or her pets, akin to individualized food, or give their pets raw meat and bone food according to animal nature. Mr.Himi’s co-founder Sarah also told EqualOcean that pet consumption, especially pet food, must primarily keep in mind the emotional needs of pets somewhat than the preferences of consumers, for a pet is the actual receiver of food. The connection between pets and owners is not any longer one in every of absolute superiority, but one in every of care, love and respect. Compared with material consumption previously, emotional consumption of pets is more elastic and continuous consumption behavior, with huge prospects.

Looking ahead

China pet ownership shows little signs of slowing down because the trend of valuing pets as relations is already well entrenched, together with people’s improved living standards and the rise of millennials. Because the core component within the pet industry, the pet food sector is deemed to have quite a lot of room for growth in the longer term, and greater success amid fierce competition lies in specialized, novel and purer food products. 

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