Dogs and cats have a 'pet economy' of their own

People's increasing consumption capacity is creating lucrative market segments in the pet industry

Keeping pets, especially dogs or cats, is now a part of modern life. But in recent years, keeping a pet has become a stylish and cash-burning lifestyle in urban areas, giving rise to what the media call the "pet economy".

People have been raising animals for centuries for food, as well as for home protection or as hunting guides. But today, animals also serve people's emotional needs.

In a way, the establishment of the China Small Animal Protection Association in 1992 signaled the evolution of animals as human companions. Today, many people are willing to spend a small fortune to keep a pet, which they treat more like a family member.

Since 2000, the number of pets has rapidly increased in China - so much so that it is almost impossible to ascertain the exact number.

Take the example of domestic pets, such as dogs and cats. According to the China Pet Industry 2018 White Paper, an unofficial document issued recently by the online pet community Goumin and Pet Fair Asia, more than 91.49 million dogs and cats are being kept as pets in China's urban areas.

To prepare the report, the two organizations conducted a survey that covered more than 52,870 people in 34 provincial regions across the country.

Whole industrial chain

The report says an estimated 73.55 million people in urban areas have pets, meaning about 9 percent of China's overall urban population of 813.47 million in 2017 had pets.

The high degree of urbanization and people's rising incomes are the main reasons that raising pets has become so popular. Beijing, Shanghai, Guangzhou, Tianjin and Chengdu are the top cities where keeping pets is most popular.

The fact that the residents of these first-and second-tier cities have comparatively high dispensable incomes has played a crucial role in the trend.

The increasing popularity of pets in urban areas has given rise to a whole industrial chain, which in turn has helped build a pet economy, comprising pet consumption including food, medical treatment and even funeral and interment expenses.

In fact, the scale of this "pet economy" is far bigger than one can imagine.

Data from the National Bureau of Statistics show the compound growth rate of China's pet industry was 49.1 percent from 2010 to 2016, the highest among all industries.

According to the pet industry white paper, the pet economy is worth 170.8 billion yuan ($24.6 billion; 21.5 billion euros; ￡18.9 billion), and has been growing at the brisk rate of 27 percent year-on-year.

The report also said that, on average, pet owners in 2017 spent 5,016 yuan on their cat or dog, 15 percent more than the previous year.

Food, daily necessities and medical treatments are the three major parts of the pet consumption market. Food and daily necessities account for the majority of the pet owners' expenditures.

The sales of high-quality and expensive pet products have grown rapidly, since people are willing to spend more money on pets, and more market segments for pet products are emerging to meet the increasing demands of pet owners.

Healthcare for pets is an unavoidable expense. The white paper estimates that pet services account for about 30 percent of a dog's "consumption" and 20 percent of a cat's "consumption", with the biggest pet service demand being healthcare.

On average, a dog owner spends 1,557 yuan a year on medical treatments for a dog, while for cat owners its 1,446 yuan.

But almost half of pet owners are unsatisfied with the existing medical care system for pets, citing factors such as unqualified veterinarians and unreasonable charges.

Catalyst for businesses

The rising popularity of pets has also promoted other forms of businesses. For years, pets, especially dogs and cats, have been used as intellectual property characters in many countries, fueling the growth of a new kind of "new media economy" in China.

A study on the "cat economy" by the Tencent Research Institute found that the image of a cute cat can draw increasingly high online attention and help cultivate new commercial models.

Sina Weibo, the Chinese social media platform, has become important for "cloud cat-raising", the phenomenon of netizens watching photographs or videos of cats for entertainment.

According to the study, as of January about 5.5 million Sina Weibo accounts used the tag "cat" to identify themselves.

In 2017, more than 330,000 cat-related articles went viral on WeChat public accounts, while the market value of the famous pet-related Sina Weibo account "Huiyi Zhuanyong Xiaomajia" is estimated at 235 million yuan.

In recent years, the number of pet owners has grown. According to the industry white paper, more than 85 percent of the dog and cat owners are women, and half of them have a bachelor's degree or higher.

The majority of pet owners were born in the 1980s or 1990s, which shows their strong consumption capacity.

Thanks to people's increasing consumption capacity, more market segments within the pet industry, especially pet-related services such as training and shipping, are expected to grow at a faster pace, further expanding the pet economy.

wangyiqing@chinadaily.com.cn

(China Daily European Weekly 10/12/2018 page28)