"My pet is my son" – The booming pet market in China
To kick off a new exciting topic, I'd like to share three stories and conversations that led me to take a closer look at the pet market in China.
I have a wealthy Chinese friend, she is a 40-year-old businesswoman without children. She has two little dogs, a Mercedes Benz and a Porsche. Recently she purchased a Rolls-Royce, as it is “comfortable for the dogs to sit on the back rows”. Since then, I see her two dogs enjoying the backseat every weekend on Social Media. That suddenly explains to me how meaningful it is that a car manufacturer did market research in the US researching what kind of needs pet owners have when they take their dogs for a drive. We also hear from Chinese drivers talking about bigger space in the car for the children and the dog.
Tmall from Alibaba recently released one report ranking the top favorite imported brands and top favorite imported product categories among the buyers. The most popular foreign brand is Dyson, the most popular foreign product category is cat dry food. What’s the correlation? Cat owners find the Dyson vacuum cleaners the most efficient for cleaning cat hair.
A friend of mine created a pet clothing business. The designer creates dog and cat clothes in a very cute style and sells it in Tmall. She told me people are buying clothes without any hesitation. She has customers who spend a few thousand Yuan (several hundred Euro) monthly at her shop. Her clothes are also selling extremely well in Japan. So I showed the clothes to my German pet owner friends and they were shocked by the design, telling me: “No German customer would purchase this kind of clothes for dogs. The focus is on practical products, like a winter coat or a raincoat and we don’t dress dogs up like a doll.”
These little stories made me think about the cultural difference regarding pet raising between Germany and China. I know Germans perceive their dog also as a family member but at the same “eye-level”. In China, a pet is also a family member, but it is more seen as a child who should be spoiled. One Chinese pet shop owner once said: “For any customer need in the maternal and child market, you will find one in the pet owner and pet market. They are in the end the same.”
Half of the German pet owners are above 50 years old, the average pet owner in the US is 47 years old. While in China, 70 % of the pet owners are 20-35 years old, mostly female without children. They have a good education and good salary, are willing to pay a lot of money on their pets, just like how they will treat their children.
There are several major products and services on the pet market in China:
Pet food has the biggest market share. Foreign brands from the US were dominating the market at first, but Chinese manufacturers are catching up using E-commerce marketing tools in Tmall. The food delivery service for pet food is also booming. Users can order “cooked human food” as well as pet food in bags or cans and the increase rate in 2020 is about 130 %.
Medical care has the second biggest market share. A few major foreign pharmacy brands own 90 % of the market share in this category. In contrast to that the insurance market is not mature yet.
Fashion is a very booming industry and Chinese brands are dominating this category 100 %, mostly because they know which style the Chinese young female consumers prefer.
Smart device is the market where many old and new players are coming in right now. As the pet owners are very busy, they need devices to help them feed the pet, play with the pet, clean the dirt at home, etc.
Check out our article about the smart home in China.
Online videos for pet owners are also very popular in China. There are online courses about pet behavior analysis, care, training, etc. and the prices vary from 1 Yuan to 1000 Yuan (0,15 -150 Euro).
Check out our article about online education in China.
Short online videos with pets on TikTok or Douyin could reach 7 billion views per day and there is a live streaming every 5.4 seconds. The active number of viewers is about 1 billion, mostly born in the 80s and 90s.
Check our article about entertainment on the smartphone in China.
The main reason for the booming pet market is because there are more and more single-lived people in tier 1 and 2 cities who need a companion. The need for a pet is an emotional customer need, but it leads to the purchase of products and services in a much bigger scope.
The Spiegel Institut has launched a special Chinese pet market research package assisting you to have a better understanding of this potential market:
- Expert interview*: Giving you insights about the trends in different industries on a meta-level
- Rec button (click and report): Giving the consumers the possibility to click the button and give us real-time feedback via voice, text, picture video messages to the survey server
- In-Depth-Interview with consumers*: Digging deep into the real customer's needs and pain points, helping you to find out a potential market niche
- Guided experience tour in China*: Based on the results from the previous 4 work packages, we will design an experienced tour for you, taking you to different relevant touchpoints (vet, pet salon, home of a pet owner, a drive with the pet owner in her car), letting you experience the real usage context.
* Will be conducted by our moderators, who are aware of the cultural difference between China and Europe/US. Our goal is to point out the small but essential things people might miss when they are not familiar with the cultural differences. We also explain the historical as well as the cultural background behind certain consumer behaviors.
Author: Yue Liu, Spiegel Institut Mannheim