More Chinese households are hosting pets with China being the 3rd largest pet owning country after America and Japan, with more than 100 million pets. By 2017, the pet market industry had reached 167.8 billion RMB. The pet market size was estimated to have an annual growth rate of 32.8% from 2010 to 2020, according to China’s biggest online pet owner community Goumin.com in ‘China Pet Industry and Consumer Behaviour Report’.
With pet ownership no longer considered a luxury reserved for the rich, China is seeing a rise in expenditure on pet food, care and products and the trend is increasing.
Overview of the market
In China, pet ownership is an indication of financial independence for some, but has also become a form of companionship for others. Statistically speaking, 73.2% of pet owners fall into the 20-35 year old category, contradicting previous ideas that only retired people with spare time were interested in pets. Another key factor is the social media influencers who have encouraged pet ownership to their followers, making it an enviable lifestyle.
The rise in numbers has seen an increase in sales of pet food and products. Goumin survey shows that 99.8% of pet owners budget specifically for the food, training, vaccinations, neutering and vet visits of their pets. The evolution of pet food purchases is a reflection of changing attitudes and a better understanding of what animals should and should not eat. Pet fair Asia is Asia’s largest trade show for animal supplies and an indication of how the pet industry has benefitted from changing attitudes. It was initially hosted in Hong Kong ad then relocated to Shanghai in 2011. It has doubled in size, a result of the volume growth for pet food. Owners want high quality food that is beneficial to the health of their pets. ‘Natural’, organic pet food is gaining popularity and becoming more of a requirement for pet owners as the effects of ‘commercial’ food are brought to light, with some saying that it can affect a pet’s lifespan if eaten long term. The figures in GFK Pet Ownership report indicate a year on year growing rate of 55%, with ‘natural pet food’ having a 24% market share.
In this market, Multinational brands gained leadership over Chinese brands due to consumer trust and lack of scandals. When buying imported food products, quality is seen as a trigger for 66% of Chinese consumers. Mars has a 35.1% market share while Nestle has 16.4%. Due to a number of Chinese dog food scandals, consumers are weary of domestic brands. However, they have a strong hold in pet products.
Pet owners are also interested in services that go beyond dog food. The Goumin survey shows that 40.9% of owners take their dog to the beauty salon, 25% have to pay professionals to wash their cat or dog, and 4.5 % have booked photo shoots for their pets. Services also include spa services, manicures, hairstyling and pet boarding. Pet boarding is when the owner is unavailable to care for the pet and find another experienced owner to host the pet in his or her home and walk or even video stream videos of the pet to the owner. The profit margin of pet boarding services can reach 20.5%. Educational toys and even DogTV are new trends that have been designed specifically for pets. Sales of pet care products are forecasted to rise another 9%.
Challenges of this market
At the moment, primary purchases are from in-store locations, with 83% of dog and cat food purchased in retail stores. In 2017, only 12% of total pet food sales came from online. However, internet retail has expanded, with a 41% growth due to the efficiency of ordering pet food online. The challenge regarding online sales is that the brand needs to be established or else people will not trust it.
how to take part of this lucrative business?
Conduct market research before and be sure to understand how much you need to sell to be profitable and if it is possible. Usually it is only when you have suitable products, the right way of marketing on these platforms and investment to attract web traffic and potential consumers that you will be successful.
E-Commerce platforms are very convenient for foreign companies. You can sell straight away without a physical presence in China so long as approval is given by the relevant cross-border platforms.
With China’s huge online population of over 900 million users and 250 million e-shoppers an online sales infrastructure is everything when entering the market. It’s an advantage for brands to conquer the Chinese market without having to pay heavy charges or taxes.
Increase your sales through the Chinese E-commerce
Tmall, JD and Yihaodian are popular Chinese e-commerce platforms. Tmall is the most reputable cross border e-commerce platform in China. The cross-border e-commerce platform is associated by Chinese consumers with quality and authenticity in a market place often associated with fake. But Tmall only accepted brands who have already a significant presence and realized high sales in China. That’s why a lot of companies are rejected by the platform, which is to ensure that they keep a high standard. There are two ways to join Tmall’s platform:
– If you are a company with China in-country business operations, you can apply to Tmall. com.
– If you are a company with overseas licenses, you are eligible to Tmall Global.
You need to drive traffic to your shop. One of the most effective ways is to set up QR codes to drive traffic between multiple platforms.
A QR Code is a powerful method for driving traffic between multiple platforms. Chinese consumers are addicted to QR codes. They always scan QR codes they see. Use their habits to touch them. Users can scan directly the QR codes and be redirected to one of these online platforms.
Search Engine optimization: SEO on Baidu
Baidu is the source of 81% of the research made in China. Before buying everything, Chinese consumers will first spend time on Baidu to have more information about your brand.
The Search Engine Optimization (SEO) is a strategy that works to rank your official website in the natural search results over time. If your ranking on the natural search results is good, you will be more visible and Chinese consumers will trust you.
Customised Chinese website
Aesthetic norms in China are different from Western preferences of a clean design. Chinese consumers like pages with a lot of information, animations and pictures.
Adaptations of content in the Mandarin language need to be made because you have to be understood by your target market. A mandarin website will also allow you to do SEO because when they do research, they use mandarin key words. With SEO, you will gain in visibility, which is the key of success in China. Your website also needs to be hosted in China.
What we can do
We are International team, here to help you develop your business in China. We understand the needs, habits and wants of Chinese consumers. We also understand the foreign brands’ difficulties when they try to enter the Chinese market. Each member of the team is specialized in a field. They have experience and they are effective.
Don’t hesitate to contact us for all your projects. We can help you to build a strong visibility and get your ROI.