Pet sector drives innovations for healthier lives

Driven by the increasing number of pets and the evolving demands of consumers, China's pet industry has seen strong growth in recent years, propelling product innovations that prioritize health and nutrition.

Since the beginning of 2024, newly registered enterprises related to the pet industry reached 945,000 in China, the Economic Information Daily reported. The pet care market's size totaled 279.3 billion yuan ($39.6 billion) in urban areas in 2023 and is expected to jump to 361.3 billion yuan by 2026.

According to market consultancy iiMedia Research, pet food reached a market scale of 190 billion yuan in 2023 and is expected to reach 267 billion yuan in 2025.

The White Paper on China's Pet Food Industry, published by Deloitte China, forecasts the pet food market will reach 114 billion yuan by 2026, with pet staple food, nutrition products, and snacks expected to grow at a compound annual growth rate of 17 percent, 15 percent, and 25 percent, respectively.

Demand for pet food and supplies continues to rise, and the market is expected to grow at a CAGR of 13.1 percent over the next five years, according to a report jointly released by the Asia Pet Alliance Institute and Euromonitor International.

This surge in consumer demand is reflected in the strong performance of listed companies. China Pet, a veteran player in the sector, reported a revenue of 1.96 billion yuan in the first half of this year, marking a 14.1 percent year-on-year increase.

The company's net profit also grew, up 48.1 percent year-on-year to 140 million yuan. Its gross profit margin rose by 3.33 percentage points, reaching 28.98 percent, with staple pet foods contributing most to this growth.

With competition heating up and consumer preferences becoming more sophisticated, China's pet sector is poised for continued growth and innovation, driven by a commitment to health, technology, and user engagement.

Hao Bo, deputy director of the Asia Pet Alliance Institute, said of the growing consumer preference for high-end fresh and functional pet foods, "We have observed a shift toward more refined products such as high-end fresh foods and functional staple foods that cater to the health and nutritional needs of pets."

Pet health is becoming an increasing concern for consumers. JD Health data show a growing focus on pet healthcare, with products for joint, dental, liver, and immune support experiencing rapid sales growth.

Liu Rui, manager of JD Health's pet health division, said that pet owners are willing to invest more to improve their pets' quality of life, particularly for aging pets.

The pet food sector has also attracted attention from dairy companies, with brands like Yili Group's "Yibao" focusing on lactose-free and gut-health-enhancing dairy products for pets.

Since the launch of its "Yibao "series in October 2023, Yili Group has rapidly ascended to the top of the pet milk category, boasting millions in monthly sales.

As scientific feeding concepts gain traction, the demand for refined pet feeding solutions is on the rise. The pet dairy market holds significant potential, though competition is fierce.

"Pets are often lactose intolerant, making the development of high-quality, low-lactose, or zero-lactose dairy products critical for growth," the company said.