Analysis on Problems and Development Prospects of China's Pet Industry in 2021

Pets generally refer to dogs, cats, freshwater ornamental fish, birds, reptiles, etc., which are raised at home as companion animals. The pet industry has a history of more than 100 years in developed countries, and the pet related industry has become very mature. The domestic pet industry started relatively late, but with the improvement of people's economic level, the change of ideas, the aging of the population and the growth of single and DINK groups, raising pets has become a kind of emotional sustenance for people. People get warmth and companionship from pets, and the pet economy has developed rapidly.

Data shows that the scale of China's urban pet (dog and cat) consumption market will reach 206.5 billion yuan in 2020, an increase of 2% over 2019. From the perspective of pet category, the scale of pet dog consumption market is 118 billion yuan, down 5.1% compared with 2019; The scale of pet cat consumption market was 88.4 billion yuan, an increase of 13.3% over 2019.

Data source: white paper of China's pet industry, sorted by China Commercial Industry Research InstituteDifficulties in the development of pet industry

1. Trade policy risk challenges of international businessDomestic pet products manufacturers mainly sell abroad, and changes in the trade policies of importing countries have a significant impact on product exports. 

The import and export policies and regulations of various countries are increasingly updated, which will further aggravate the responsibility risk of manufacturers, leading to the need for manufacturers to constantly adjust the design, procurement, manufacturing and testing of products according to policies, thus increasing the costs of manufacturers. In addition, trade protectionism in developed countries has risen. If there are trade frictions in the pet products industry between the countries in which pet products are sold and China, this will have an impact on the development of the industry.

2. Competition challenges in industries with low barriers to entryThere are many categories in the pet products industry, which has maintained rapid development in recent years. 

However, the relevant industry standards for the production of pet products are relatively lacking, and the product quality of various manufacturers is uneven. At the same time, due to the lack of supervision and restriction of relevant laws, regulations and industry standards, large-scale production, circulation and services are difficult to establish, leading to low barriers to industry entry, making the market full of disorderly competition, which is not conducive to the improvement of the profitability of industry enterprises.

Development prospect of pet industry

1. Steady development opportunities of the global pet marketData shows that the scale of China's urban pet (dog and cat) consumption market will reach 206.5 billion yuan in 2020, an increase of 2% over 2019. The domestic pet market has maintained a rapid growth, but the proportion of pet owners in the total population is far lower than that in Europe and the United States. 

In the future, with the further increase of the proportion of domestic pet owners and the growth of the per capita annual consumption of single pet, the domestic pet industry will usher in a sustained and rapid development.

2. Opportunities for continuous consumption upgrading of pet industryWith the increase of per capita income, pet parents have more substantial economic capacity to improve the quality of life of pets, which will drive the demand for pet products to increase and promote the consumption upgrade of pet products. Not only that, the increase in income has also made pet parents' demand for pet products more personalized, with higher requirements for product quality, which has effectively promoted the upgrading of the industry and the upgrading of products, and promoted the rapid development of the industry. Pet consumption expenditure has gradually become a part of the normal consumption expenditure of pet raising families. People's willingness to spend on pets is increasing, and their sensitivity to pet product prices is decreasing.