Market Analysis of Pet Care Products in China

With the development of the social economy, the acceleration of urbanization, and the continuous improvement of people's living standards, more and more pets have entered people's lives and families, enriching human life, relieving people's loneliness and psychological pressure, and Promoting Children's love and sense of social responsibility has played an important and positive role in helping the disabled in their daily lives and in the adjuvant treatment of certain diseases. The increasing number of households keeping pets has also led to the vigorous development of the pet supplies industry. But it also brought many problems, such as the lack of innovation in the production of pet care products, the production technology is not advanced enough, the phenomenon of using human medicine instead of the medicine is frequent, and the industry is not standardized. Therefore, these problems should be solved and the stable and sustainable development of the pet care products industry should be guaranteed.

1. Development status of the pet industry

At present, the number of households keeping pets in China has already reached a certain scale, and the pets are mainly dogs and cats. According to the data of "Investment Prospects and Risk Analysis Report of China's pet care products Industry" written and released by Global Impression, in 2018, there were 73.55 million (water-containing) urban pet users in China, including 56.48 million urban dogs and cats. 33.9 million people still own dogs and 22.58 million cat owners. As of 2018, the number of pet dogs in China reached 50.82 million, an increase of 23.42 million over 2015, while the number of pet cats in China was 40.64 million [3]. These pet owners and the 91.49 million dogs and cats in cities and towns across the country have propped up the 170.8 billion yuan scale of China's pet (dog and cat) market, promoting the rapid rise of the pet industry with an annual growth rate of 27%.

In 2018, the size of China's pet dog market was about 98.5 billion yuan, accounting for 57.2% of the total pet market size. The pet cat market size was about 60.2 billion yuan, accounting for 35.0% of the total pet market size. After calculation, the per capita annual consumption of cat and dog consumers in 2018 was 5,016 yuan, an increase of 15% over 2017. The data shows that the consumption of the pet industry has been upgraded, and the owners have spared no effort in the process of consuming pets.

2. Development status and prospects of the pet supplies industry

Through the analysis of the current market situation of the pet care products industry, China is one of the exporters of pet accessories, and the pet accessories currently produced are mainly exported to the United States and Northern Europe. However, in China's pet care products industry market, foreign brand products occupy about 80% of the market share, and domestic brands only account for 20% of the market share. With the rise of domestic brands and the localization of the pet care products industry, domestic enterprises have a vast market. space and market potential.

According to data from the National Bureau of Statistics, in the past five years, the growth rate of per capita disposable income in China has been positively correlated with the growth rate of per capita pet spending, and the absolute growth rate of per capita pet spending has significantly "outperformed" the growth rate of per capita disposable income. On the one hand, this result shows that with the improvement of personal consumption ability, the ability of residents to pay for pets continues to improve. On the other hand, it also shows that with the improvement of people's living standards, some additional consumption items related to pets such as pet grooming, pet hotel, pet training, etc. will also usher in a period of heavy volume, horizontally driving the continuous expansion of the pet economy.

3. Current problems in the pet supplies industry

3.1 Trade is subject to policy risks

A large number of domestically produced pet care products are sold abroad, so they need to bear the risk of policy changes in the importing country. The import and export policies and regulations of various countries are increasingly updated, which will further increase the liability risk of manufacturers. As a result, manufacturers need to continuously adjust product design, procurement, manufacturing, and testing according to policies, which undoubtedly increases the cost of manufacturers. In addition, trade protectionism in developed countries is on the rise. If there is trade friction between the countries where pet care products are sold and China in the pet care products industry, it will have an impact on the development of the industry.

3.2 Lack of competitiveness in the pet care products industry

At present, the pet supplies market is mainly a market where large foreign companies are competing, and these companies have occupied the industry for a long time and have great brand advantages. In addition, domestic pet supply enterprises are backward in technology, and their operation and management are not standardized, resulting in poor sales. Therefore, domestic enterprises lack competitiveness compared with foreign-funded enterprises with brands. From the pet food market to pet toys, the pet clothing market is almost occupied by foreign brands.

3.3 Innovation of pet care products

Insufficient Domestic pet care products companies basically produce OEM products for foreign customers, with weak independent research and development capabilities, and insufficient innovation and humanization of pet care products. In the field of pet clothing, it has not yet been able to be customized according to the pet's chest circumference, neck circumference, body length, etc., and it has not been able to customize according to the pet's own problems, such as the pet's partial warmth after the operation, the pet's Eye diseases need to be equipped with corresponding glasses and so on.

3.4 Lack of normative standards for industry management and services

China's pet care products industry started late, and the market has developed rapidly in recent years. However, disorderly competition in the market, low level of breeding, weak legal concepts, large quantity but few high-quality products, non-standard management, and lack of supervision and restraint of relevant laws, regulations, and industry standards have led to the disorderly competition of pet care products in China. The formation of a high-level professional market has seriously affected the healthy development of the pet supplies industry.

Especially in pet quarantine and immunization, there is a lack of relevant laws and regulations. As we all know, dogs and cats have many zoonotic diseases, and there are more than 10 common ones, such as rabies, brucellosis, leptospirosis, cat's claw fever, toxoplasmosis, and so on. Many pet breeders have not done the necessary quarantine, deworming, and vaccination for their pets. For example, many cities have not yet carried out pet dog registration, certification, and other management, which will bring hidden dangers to social security. According to the "Investment Prospects and Risk Analysis Report of China's pet care products Industry" written and released by Global Impression, the number of rabies cases in China from January to June 2018 was 202, and the death toll was 197.

At the same time, pet supplies online shopping companies are limited by the scale of sales, the channel negotiation power is weak, and most of the supply of goods is controlled by brand channel providers. On the other hand, channel suppliers may have irregular operations such as adulterated fake products, which may easily lead to product quality problems, which will cause certain damage to consumers’ rights and interests, and will also be detrimental to the brands of online shopping companies. However, there is currently no legal norm for online shopping in China, and consumers are often faced with the embarrassment of being unable to rely on their rights. And unscrupulous businesses often take advantage of loopholes in-laws and regulations to formulate overlord clauses and infringe on consumer rights.

3.5 Pet medication relies on imported drugs, and chaos occurs frequently

China's pet industry started relatively late. Most veterinary drug companies mainly focus on APIs, which are mainly aimed at livestock and poultry. Pet drugs are only a small branch of veterinary drugs. In addition, most of the manufacturers of imported pet-specific medicines are internationally well-known enterprises with approval numbers. They have great brand influence, reliable curative effects, and complete varieties. Therefore, most of China's pet drugs are monopolized by foreign countries. Moreover, in actual production and application, human medicines are used in many pet hospitals, especially for pet nutrition diseases and geriatric diseases. Due to the lack of special pet medicines, the phenomenon of pets being replaced by human medicines is more prominent [8]. Therefore, the research and development of immune enhancers such as pig spleen transfer factor for pets and chicken bursa of fabric oral liquid have become a hot direction for pet biological products.

4. Suggestions for the future development of the pet industry

4.1 Pay attention to product materials and improve the comfort of pet care products

The structure of canine and cat skin diseases is fundamentally different from that of humans. First, the thickness of the skin of small animals (the number of skin layers is less) is thinner than that of humans; second, the pH of the skin of small animals and humans is different, This also leads to the relatively high incidence of skin diseases in small animals. Therefore, when we design and manufacture pet care products, we should consider these factors. Many pet care products such as pet clothes, pet collars, pet saliva towels, pet shower gels, and other products that directly contact pet skin, should be Chosen as suitable and comfortable materials to improve the comfort of pet supplies and reduce the occurrence of pet skin diseases. Therefore, companies should choose materials with higher comfort when producing products, and at the same time improve the product experience.

4.2 Focus on developing functional products

At present, in the aspect of domestic pet accessories, too much emphasis is placed on appearance rather than practicality. Therefore, we should increase research efforts in the functional aspects of pet accessories, improve innovation, and then improve the competitiveness of our products. At the same time, in terms of pet supplies, it is recommended to combine more clinical cases to help pets' disease treatment and improve the practicability of pet supplies.

4.3 Improvement of laws and regulations in the pet care products industry

At present, there are no domestic laws and regulations mainly targeting pet care products, resulting in frequent chaos. At the stage of rapid development of the pet care products industry, we should pay more attention to relevant legal norms. In terms of pet drugs, the development and registration of pet drugs should be accelerated, and the supervision and testing of pet drugs should be strengthened to prevent the chaos of frequent use of human drugs in pet hospitals. In terms of selling fake and shoddy pet care products, in addition to laws and regulations, more attention should be paid to supervision and Increase the punishment for those who violate the regulations, and then regulate the market operation of pet care products and protect the rights and interests of consumers and pets.

4.4 Focus on building domestic brands

For a period of time in the future, China's pet product manufacturers are likely to continue to be the outsourced processors of major foreign brands. In this process, our domestic excellent enterprises should start to think about the importance of their own brands, and then rely on years of accumulated production experience and technological achievements to seize domestic and foreign markets with rich product lines, and ultimately enhance the brand value of the enterprise, so as to stand out as a Leader in the industry.

4.5 Development of pet medicines

According to the current demand for pet drugs, actively carry out market research and scientifically formulate the research and development direction of pet-specific drugs. The prevention and control of major animal diseases and zoonotic diseases in pets should be the focus of research. It is necessary to increase the training of technical personnel in pet drug research and development and form a high-quality research and development, talent team. Relevant state departments should provide financial support for the research and development of new pet medicines, and relevant departments should give preference to new products and key technologies of pet medicines in formulating policies and capital investment. In the process of new veterinary drug research and development, approval, production, and use formulate some targeted and instructive pet drug management policies and measures. To provide a reliable guarantee for improving the research and development efficiency and product quality of pet drugs.

To sum up, the pet care products industry is still developing by leaps and bounds, but due to the lack of innovation and attention to pet care products in China, coupled with the lack of industry standards and laws and regulations, resulting in frequent chaos, the market has expired vaccines and Human medicine is used as veterinary medicine and other chaos. Based on this, we should pay attention to the research and development of pet care products and build domestic brands. At the same time, domestic rules and regulations related to pet care products, laws and regulations, and increased supervision should be formulated, so as to ensure the faster and better development of the pet care products industry.