2024中國寵物食品市場(chǎng)概覽白皮書(英)-Azoya Consulting

OverviewofChinese

PetFoodMarketin2023

December2023

AzoyaInternational

OverviewofChinesePetFoodMarketin2023

China'speteconomyhadsurgedpost-pandemic,fueledbythelifestyleshiftcausedbyincreasedtimespentathome.PrimarilyledbyChinesemillennialsandGen-Z,whoareproductsoftheOne-ChildPolicyera,thetrendreflectsapreferencefor"fur

babies"overtraditionalparenthood.

AzoyaInternationalLtd.

AccordingtoAnalysys,atechandmarketanalysisagency,theChinesepetmarketwillhit392.7billionyuan($55billion)in

2023,withpetfoodclaimingover60%ofthisshare.Thecontinuousriseinpethouseholdsandpenetrationrates

indicatessubstantialgrowthpotentialforChinesepetfood

economy.Delveintothisreportforin-depthinsightsandtrendsintheChinesepetfoodmarket.

2

GrowthofDemandDrivenbyIncreasingPetAdoptions

ChangesInTheNumberOf

HouseholdCatsAndDogs(unit:1m)

Dogs

cats

7190

6536

5273

5119

20192020202120222023E

Underthecontinuedprocessof

urbanizationinChina,thenumberof

adoptedcats&dogsisincreasing.Moreyoungpeopleraisepetsasiftheyare

their'children'forcompanionship.Thisdrivesthenumberofpetadoptionsandmulti-pethouseholds.

ChangesInTheNumberOfHouseholds

WithPetsInChina(unit:1m)

10565

5989

6369

9168

9800

20192020202120222023E

In2021,duetotheCOVID-19

lockdown,Chinesefamilieshadmoretimetospendathome,whichchangedtheirlivinghabitsandrosethenumberofpetadoptions.By2023thenumberofhouseholdswithpetswasestimatedtoreach105million.

PenetrationRateOfHouseholdsWithPetsInChina

USA:70%

22%

20%

EU:46%

18%

14%

13%

20192020202120222023E

Thepenetrationrateofhouseholds

withpetsinChinaisstilllowcomparedtotheUSAandEU.However,China

hasgreatpotentialinthisindustry

sincethepopularityofpetadoptionisincreasing.

YoYofSpendingonPetsPerCapita

+14.7%

+8%

2019202020212022

Withtheincreaseinthenumberofpet

owners,moreinformationaboutkeepingpetsemerged.Duetoeconomic

developmentandtheimprovingqualityoflife,averagespendingonpetsper

capitawasincreasingsignificantlyfrom2021to2022,andwouldcontinuetoriseinfuture.

AzoyaInternationalLtd.Source:JD.comxPethadoop,2022WhitePaperofChina'sPetIndustry3

ShortVideoPlatformsFuelGrowthinPetMarket

Staplefood("主糧“inChinese):apopularnutritionconceptinChina,referringtothedailyessentialfoodforpets.Thedailyessentialfoodcontainsdry&wetfoodbutdoesnotcontain"snacks"suchascansorpackedfoodthatarenotnecessaryfordailyconsumption

2021-2023DouyinPetCategorySalesTrends(MeasuredbySalesPopularity)

Thisyear'sQueen'sDaysalespopularityonDouyinisnearly

equivalenttolastyear'sDouble

Eleven,despiteQueen'sDaynot

beingthebiggestfestivaloftheyear.

OnDoubleElevenin2021,thepetcategoryonDouyinexperiencedits

firstboom,withthesalesofcatstaplefoodreachingthehighestlevels,

boastingayear-on-yeargrowthrateof64.5%.

2022/102022/11

2023/03

DuringDouble11in2022,petproductsalessurpassed420million,andalmost70thousandlivestreaminghosts

featuredpetproductsales.Brands’ownlivestreamhostcontributedto46%ofthe

sales,reachingarecordhighonNovember11.

202101202102202103202104202105202106202107202108202109202112202201202202202203202204202205202206202207202208202209202212202301202302

2021/102021/11

AzoyaInternationalLtd.Source:Guoji&Feigua,Insightsintosocialmediamarketingtrendsofthepeteconomyin20234

ImportedPetFoodSurgeswithU.S.BrandsLead

TotalNumberofNewSKUApprovalsbyMOAsince2015

otherregions

YoYofPetFoodSub-CategoriesandtheirTopBrandsonTmallon2022Single’sDay

AU&NZ

EMEA

USA

138

219

886

337

583

2,025

2000

1500

1000

500

0

Increaseover1,900SKUs

20162021

MOA:theMinistryofAgricultureandRuralAffairsofChina

MOAcertificationshasbeengrowingsignificantlysince2016.

China’spetfoodmarketexperiencedaparticular‘openingup’toimportsin2016becauseoftheeasingofimportregulationsandtheemergeofcross-bordere-

commercechannels,bothofwhichhavemadeiteasierforimportbrandstoaccessChina’spetfoodmarket.

Freeze

Small-to-mid

Functional

dried

sizeddogfood

food

110%

40%

60%

Wet

30%

GMV

Topperformingimportedbrands

VitalEssentials

BlueBuffalo

ZiwiPeak

Acana

K9Natural

Tasteofthewild

Tasteofthewild

K9Natural

Stella&Chewy’s

RoyalCanin

FancyFeast

Fromm

1

2

3

Thesewell-performedbrandsaremainlyfromU.S.,Canada,NewZealandand

France:VitalEssential,BlueBuffalo,Tasteofwild,Stella&Chewy’s,Fromm,

FancyFeast(U.S.),Acana(CA),ZiwiPeak,K9Natural(NZ),RoyalCanin(FR).

AzoyaInternationalLtd.Source:TmallGlobal&C2CapitalPartners,OpportunitiestoBuildinga$1BillionPetFoodBrandinChina5

HomogeneityistheTopChallengeforPetFoodBrandsinChina

TheFocusOfDifferentStagesOfIndustryDevelopment

ProductsCategory

Drytype,Semi-drytype,Freeze-driedtype,Softwettype,Wettype

Powdertype,Extrudedgranuletype,Singlepuffedgranuletype,Doublepuffedgranuletype,Friedtype

Weaning,Infancy,Adulthood,Pregnancy,Lactation,Oldage

Small,Medium,Large,Jumbo

Criteria

MoistureContent

ProductionTechnology

AgeGroup

Size

MostbrandsadopttheOEM/ODMmethodfromproductdesigntolanding,lackingindependentR&Danddesigncapabilities,innovationinproductiontechnologyandadvantagesinrawmaterials.

.Ithasledtohighsimilarityofproductsavailableinthemarket.Inahomogeneousmarket,brandswithoutuniquesellingpointstendtowinmarketsharebylowprices-andthisiswhatweobserveinthemarketsmostbrandstendtoofferhugediscountstodrivesales.

TheFocusOfDifferentStagesOfIndustryDevelopment

MKTVALUE

PRODUCTVALUE

shockperiod

Highspeed

EarIYstage

DeveIopmentstage

.Ifabrandcanhavestrongdifferentiationinrawmaterials,processing

technologyorformula(tomeetmorerefinedneeds),itwillbeeasiertostandoutfromthemarket.

AzoyaInternationalLtd.Source:Guoji&Feigua,Insightsintosocialmediamarketingtrendsofthepeteconomyin20236

PetStapleFoodNowaFunctionalandRefinedSellingPoint

Salesscaleandyear-on-yeargrowthrateofvariousfunctionalpetproductsinMarch2023

High

LowFat

GlowHair

Gastrointestinalprotection

Probiotics

LowSalt&Oil

YOYIncrease

HypoallergenicCheckGrowing

SalesScaleHigh

Low

Chinesepetconsumersaregraduallyimprovingtheirawarenessof

scientificfeeding.Therearechangesinproductiontechnology,andisalsoademandforproductsefficacy.Requirementsbecomemore

detailed.

Refinedpetcaretimehascome.Thepromotionhighlightoftheproductsisgraduallyshiftingtofunctionalnutrition.

Thetraditionalboundariesbetweenstaplepetfoodandpetsnacksareincreasinglyblurred.Thisisbecauseconsumersarebecomingmore

concernedabouttheingredients,nutrition,proteinsources,andthescientificformulaofpetfood.Productswithbothpalatablenessandnutritionwouldbepreferred.

Additionally,themarketisgraduallywitnessingtheemergenceof‘bigsingleproducts’(‘大單品’inChinese)ineachfunction,indicatingthatproductsemphasizingspecificfunctionscangainsignificantmarket

share.

AzoyaInternationalLtd.Source:Guoji&Feigua,Insightsintosocialmediamarketingtrendsofthepeteconomyin20237

ImportedBrandsLeadCatFoodwithFunctionalitiesand

Formula

CatFoodBrandsSalesRank(July2023)

RankBrandMarketShareImported

1

RoyalCannie

9.1%

Y

2

Lifeease

3.9%

N

3

Myfoodie

3.2%

N

4

KERES

2.7%

N

5

Orijen

2.7%

Y

FrenchcatfoodbrandsRoyalCanindominatesthemarketwithover2timesmarketsharethanthesecondbrand.

RoyalCaninleveragesitsfunctionalityformulaassellingpoints,meanwhileadjustingthefunctionaltargetstocats’digestion,urinary,skinandpost-sterilizationrecovery.

KittenMilkCake

For1-4months

kittensatweaning

oImproveimmunity,protectsensitive

stomachsandeasiertochew&digest

AdultCatFood

For4-12monthskittens

Decreasehairballs,protecturinaryandbuildbodyshape

KittenFood

For4-12monthskittens

Improveimmunity,protectsensitive

stomachsandgrowskeletons

ProteinExigentCatFood

Forcatswith

SensitiveIntestinalTracts

Easytodigest

AzoyaInternationalLtd.Source:ZhiyiTech,2023AugustPetFoodMarketAnalysisReport8

UnstoppableDemandforAgingProducts

Agedistributionofcatsanddogsin2023(Unit:1K)SearchperformanceofAgingDogsfoodonTaobao

AgeGroup

CatsAge

DogsAge

2023ECats

2023EDogs

Distribution

Distribution

Number

Number

Infancy

7%

7%

5,030

3,690

Adolescence

49%

30%

35,230

15,820

Adulthood

39%

45%

28,040

23,730

MiddleAge

2%

12%

1,440

6,330

OldAge

3%

16%

2,160

3,160

IncreasingrateofOldDogssearchonJD

114%+MAT2023

BakeddogfoodForAgingdogs

Increase61timesin2023

oIn2023,itisestimatedthat13.09millionpetswillentermiddleandoldage.After

petsentermiddleage,theirfoodneedstobeadjustedappropriately.Consumers

graduallyrealizethatwhattheirpetsneedisnolongerhigh-proteinproducts,buttheonessuitablefortheirphysicalconditions.Wecanseefromthesearchresultsand

transactionperformanceofTaobaoandJD.comthatpetfoodformiddle-agedandelderlypeopleistrending.

oJD'sSeniorDogSearchIndexincreased114%.

Taobao’ssearchpopularityforelderlydogstripledinJunethisyear,andthepaymentconversionrateissteadilyincreasing.

AzoyaInternationalLtd.Source:CalculationbyJD.comPethadoop"2022WhitePaperofChina'sPetIndustry"9

NewGenerationDrivetheGrowthofJD’sPetIndustry

TypicalGroup’sSalesVolumeAndGrowthRateOnJD

GrowthRate

TypicalGroupWhoHavePets

60%

18%

10%

HappyFamily

NewGeneration:below25yearsold,unmarried

IndependentFemale:1st-2ndtier,26-35yearsold,unmarriedYoungGeneration:1st-2ndtier,26-35yearsold,unmarried

TrendyFamily:26-35yearsold,marriedHappyFamily:36-45yearsold,married

EmptyNester:46-50yearsold,married

LeisureMale:31-50yearsold,2nd-3rdtiercity

SingleGroup

New

Generation

IndependentFemale

GreyHairGroup

EmptyNester

TrendyFamily

FamilyGroup

GreyHairGroup

GreyHairGroup:over50yearsold

Young

Generation

Leisureman

6%

Sales

Proportion

12%22%

FromJD’stypicalpetconsumptionclassification:

Consumersundertheageof25aregrowingrapidlyastheyhavejustenteredthesocietyandhavetheirspace,rightandabilitytoraiseapet.Itcanbeseenthatthemainconsumersarethe26-35agegroup.

ThelargestsectorisHappyFamily,whichstillhasarelativelyhighgrowthrate.Thefirst-andsecond-tiercitiesarestillthemainconsumptionforce.

Singlegrouphashigherpotentialinthemarket,asthepetindustrywasreferredtothelonelyeconomyorsingleeconomyinChina.

AzoyaInternationalLtd.Source:CalculationbyJD.comPethadoop"2022WhitePaperofChina'sPetIndustry"10

YoungPeople’sModerateMonthlyPetSpendingisBetween

$28.2-$70.5

48%peoplespend200-500yuanonpetspermonth,while25%spend500-1000yuan($28.2-$70.5)withthegroupbornafter2000stakingthelead.Only8%peoplespendover1000onpetspermonth,mainlycomposedofthoseborninthe1985sand1995s

TheMonthlySpendingonPetofYoungPeople(born

between1980sto2000s,unit:yuan）

ComparisonofMonthlySpendingonPetofYoung

People(Unit:yuan)

Under100

100-200

200-300

300-500

500-800

800-1000

1000-1500

1500-5000

6.62%

12.58%

21.19%

15.23%

9.93%

4.64%

3.31%

26.49%

0%10%20%30%40%50%60%70%80%90%100%

1980s1985s1990s1995s2000s

12%

42%

17%

over1000500-1000200-500under200

AzoyaInternationalLtd.Source:TOPKLOUT.COM,YoungPeopleLifeSpendingObservation

11

Weibo,Douyin,Kuai,BilibiliandLittleRedBookareMajorPet

ContentPlatforms

HotContent

Dailysharingand

publicbene?tvoice

Notlimitedtopet

products.‘Seeded’of

dailyproductsrelevant

topetscenario

Interactivedailylife

betweenpetsandowners

EmergingChinesepet

foodandtechnology

products

Funnypetcontent

andtalent

Petcleaning

products,toysand

snack

Innovativecontent

Technological

productsimproving

petfamily

environment

HotCategory

WeiboDouyinKuaishouBilibiliLittleRedBook

Petlifestylefromtheowner’sview

Dewormerand

healthsupplement

forpets

AzoyaInternationalLtd.Source:TOPKLOUT.COM,YoungPeopleLifeSpendingObservation12

Instinct:U.S.PetFoodBrandLeveragingKOLsAcrossMultiple

SocialPlatforms

TheU.S.petfoodbrandInstinctsecuredtheseventhpositiononthe2023Single’sDaypetbrandsaleslistonTmall.Italsoclaimed

thesecondmostpopularimportedpetfoodbrands,rankedbehindtheFrenchbrandRoyalCanin.

@麻薯小卷

LittleRedBook

@煤球麻麻Douyin

@貓咪福福說Bilibili

@辛巴那家伙Weibo

InstincttendstochoosemiddleorsmallKeyOpinionLeadersthatshowpets’livesfromtheowners’

perspectivestofindtargetedaudienceandleveragecustomers’Bandwagoneffect.

Thebrandstrategicallycombinesproductpromotionsintorenownpets’dailylives.Thisformofsoftadvertisement

tendstoresonatewithaudiencebetter.

AzoyaInternationalLtd.Source:Ebrun13

ChinaPetFoodBrandMyFoodie:CombiningOnlineandOffline

PromotionChannels

TheCAGRofMyFoodiewas43.5%from2019to2022,generating204.6millionyuan($28.7million).Additionally,itssaleswasthe

highestonTmallamongallpetbrandsinChinaduring2023Single’sDay.

SigningChineseactor

‘NicholasTse’asspokesman

SponsoringvariousTVshowsorplays

MultipleOfflineChannels

Realityshow‘BacktoField’

51Distributorsacrossthecountry

Cover27provinces

Cooperationwithover20,000pet

stores,animalhospitalsandretailers.

TVDrama‘TwentyYourLifeOn’

AzoyaInternationalLtd.Source:M14

AttractingYouthfulCustomers:ThePowerof'Brand+Pet’

Brandswhicharenotinpetindustrycouldalsoleveragepetingredientsorlaunchpetproductstoattractyoungcustomers,driving

salesandbuildbrandpresence.

PetProducts

HermesDoghouse

McDonaldcatteriesBurgerKing×Midumidu

Petchoker

Pet-relevantdesign

HEYTEA×PIDANCatPawCup

Pet-friendly

marketingstrategy

Star