‘Mentality’ change driving mainlanders to splash the cash on animal friends, and Hongkongers are among top spenders on pet care in Asia-Pacific
- China growth is being driven ‘by a combination of lifestyle and mentality changes’, with an increasing number of young mainlanders choosing to raise pets and treating them as family members: partner at Beijing-based Alto Vera says
- Hong Kong pet owners ‘highly value daily care, diet and their pets’ well-being and health’: OneDegree deputy CEO Emily Chow
The pets market in mainland China has seen steady growth in recent years, driven by a shift in “lifestyles and mentality” among pet owners, while Hongkongers too are more willing to increase their spending on the health and well-being of their animal friends, analysts said.
On the mainland, even as economic challenges weigh on discretionary consumption, “good growth” is expected in the pets sector, said Sam Sun, partner at Alto Vera Equity Partners, a Beijing-based buyout fund focused on the consumer and industrials sectors.
“The growth is driven by a combination of lifestyle and mentality changes, where an increasing number of young mainlanders, deterred by the high costs of forming families, are choosing to raise pets as companions and treating them as family members [instead],” he said.
And this shifting trend is leading to increased spending not just on pet food, but also pet health, apparel and accessories, Sun added.
China’s pets industry recorded total sales of US$13.6 billion last year, close to a 100 per cent increase since 2018, according to reports published separately by industry bodies such as the Chinese Veterinary Medical Association and Euromonitor.
This comes despite slowing growth momentum in the sector, which was due in part to the Covid-19 pandemic and its impact on discretionary spending. Last year, mainland pet owners spent an average of 2,875 yuan (US$400) per year on their dogs and 1,870 yuan on their cats, marking declines of 0.2 per cent and 0.75 per cent, respectively, compared to 2022 levels.
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“That the pet industry has continued booming despite persisting confidence weakness suggests that pet owners are invested in ensuring the life quality of their pets, and are willing to spend as necessary,” said Alfredo Montufar-Helu, head of the China Centre for Economics and Business at The Conference Board, a global non-profit think tank.
Pet food dominated owners’ spending with a 52.3 per cent share, while medical products and services, including medication, physical examinations and vaccines, accounts for 28.5 per cent, the Chinese Veterinary Medical Association’s report shows.
The mainland pet economy is expected to reach 81.1 billion yuan in sales next year, according to estimates by iiMedia Research.
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There has been a shift in mentality in Hong Kong as well.
OneDegree commissioned Ipsos, a market research firm, to survey 526 pet owners in Hong Kong and found that they spend an average of HK$680,000 raising their animal friends, according to a report published on Tuesday.
The top spending categories were pet food and snacks, accounting for 19.4 per cent of the total, followed by veterinary visits and medication, which accounted for 17.2 per cent, and health check-ups and dental care, which accounted for 9.8 per cent.
“Uninvolved or permissive [pet] parenting are no longer the norm for pet owners,” said Emily Chow, OneDegree’s deputy CEO. “They highly value daily care, diet and their pets’ well-being and health.”
Owning pets has become increasingly popular in Hong Kong over the past five years, with the number of cats, dogs, birds and other pets jumping by 50,000 to 1.19 million between 2018 and 2023, according to Statista. The industry has seen sales grow by 50 per cent over these five years to US$1.2 billion last year, according to Euromonitor data.
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An ageing population, Covid-19-related social isolation and the high costs of raising children are among key factors that have driven the growth of the city’s pet industry, according to separate reports by the German Chamber of Commerce in Hong Kong and OneDegree.
OneDegree’s Chow said that pet owners these days not only seek vet care when their pets fall ill, but they also schedule regular check-ups and enrol their pets in insurance plans. “They consider pets as family and provide their four-legged companions the same love and care,” she added.
However, despite the money and effort that Hongkongers are spending to take care of their pets, the city’s pet insurance industry is still in its nascency, with an estimated use rate of around 5 per cent.
The report shows that as many as 16 per cent of the 526 owners polled by OneDegree had never heard about pet insurance, and among those who had heard of pet insurance, less than half had enrolled their pets in an insurance plan.
“We believe [that] by continuing to educate pet owners, providing transparent product information, as well as a seamless and efficient online insurance purchase-and-claim experience, the market will grow and boom in Hong Kong,” she said.
