How Many Pets Are There in China?

There are over 100 million registered pets in China according to Zhongjinqixin. The most common pets are dogs and cats; combined they account for approximately 80% of the pet population. These numbers are expected to increase by at least 10% per year for several years. The leader of Zhongjinqixin, He Yinjin said that the pet population in the United States is 1.3 times the human population.

Tortoises are becoming increasing popular and account for 6% of the Chinese pet population. Li, a Chinese resident said, "Many residents are now raising tortoises as pets at home, as tortoises indicate longevity in the minds of Chinese. My family has treated the tortoises as our family members.”

In 2014, the average yearly wage was approximately 56,000 CNY. 11% of Chinese pet owners spend in excess of 10,000 CNY each year on pet care and 32% spend between 1,000 - 3,000 CNY per year. Demographically, the vast majority (92%) of people with pets are under 45 years of age.

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Packaged Facts Provides Trends for the Pet Supply Market

In 2014, the nonfood pet supply market had a value of $15 billion USD in the United States according to Packaged Facts (all statistics in this article are from “Pet Supplies in the US, 10th Edition”). From 2010 to 2014 the pet supply industry grew by 15%.

There are approximately 2,250 companies that participate in the American pet supply market and this number continues to increase. Competition is expected to increase as well and the pet supply market is expected to reach $17 billion USD by 2019.

Packaged Facts provided four macrotrends for 2015 and onwards:

1. Impact of economy: Spending on pet supplies will reflect the economy. With the economy not as strong as it once was many people will continue to keep their spending low. While many people struggle financially they are reporting feeling more affluent than in previous years.
2. Savings are a priority: Saving money is important to people. Approximately 50% of people are spending more on pet products. In the past four years, people have been becoming more comfortable with higher priced pet items. The percentage of people that felt that products were too expensive dropped from 74% to 64%. While people may be comfortable with higher prices they still want to see lower prices and sales; most are looking for a good deal.
3. Premiumization and natural pet products: For at least ten years premiumization has been a strong trend in the pet supply market. Many industry experts believe that premiumization is necessary to maintain profit margins on premium products when compared to normal brands. Premiumization is often closely tied with natural pet products. One driving trend to encourage people to spend more on premium and natural products are the potential health benefits to pets. People will spend more if a product could potentially benefit their pet.
4. Baby boomers are key to market growth: With approximately 77 million baby boomers in the U.S. they are a large force in keeping the pet supply market strong. Many boomers have high incomes and are able to spend large amounts of money. Boomers have also remained willing to share their wealth and lifestyle with their pets as they age. If boomers continue this trend as they become seniors then this promises a continued strong pet supply market.

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What Will Cause 90% of People to Leave Your Business? Insight From the Shopper Experience Study

Credit: 2015 Shopper Experience Study.

Consumers are willing to walk in order to pay less money on products. 93% of people are willing to purchase products from another retailer for a lower price according to the Shopper Experience Study. When price is not a factor though there are other reasons that consumers will choose one retailer over another. 48% of consumers will not choose the retailer with the lowest price in favor of convenience, loyalty programs, and return policies.

Cognizant's SVP of Products and Resources Practice Leader Business Consulting, Steven Skinner recommends three changes for retailers to make that will help tailor their business to suit customer desires. These changes may lead to greater customer satisfaction and loyalty.

1. Include store associates in digital technology rollouts: Testing of new applications should not occur once it reaches the customers’ hands. Include store associates from the beginning and allow for continuous feedback from associates.
2. Empower and train associates: store associates interact with customer and play a vital role in determining if a business receives repeat business. Train associates so they are able to exceed customer expectations. Make sure they understand what tools/tactics are available to them and when they should be used to make a sale.
3. Create a loyalty strategy that emphasizes personalization: Do not flood all of your customers with the same message. People want a loyalty program that feels unique and insightful.

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Will the Drug Classification for Ketamine Change?

Ketamine, a drug often used to sedate dogs and cats for surgical procedures is being reevaluated by the World Health Organization. China has requested that Ketamine is changed to a Schedule 1 drug.

Dr. Patrick Hackett said, "For years, it's been a drug that some people on the streets would try to get a hold of. I think it goes by the street name of 'Special K,' or it used to." By moving Ketamine from Schedule 2 to Schedule 1 it would be in the same category as drugs such as cocaine and heroine. Hackett said, "It would take that drug out of our ability to use it on the pets in Knoxville or across the country. I've probably spayed and neutered 50,000 animals in Knox County using that drug. If it's no longer available, I'll have to use other alternatives that may not be as safe and certainly may be more expensive."

Ketamine is often used at Humane Societies and an increase in price is a large concern to financially concerned animal aid organizations. Executive Director of the Humane Society of the Tennessee Valley, Amy Buttry said (regarding surgery cost), "We try to keep it really low so that as many people as possible will bring their pets in to have them spayed or neutered." Hackett said, "This drug has good uses, and the fact that a few people abuse it shouldn't be taken away from the masses that do enjoy the benefits of this drug."

The American Food and Drug Administration will be presenting their comments at the 36th Expert Committee on Drug Dependence in Geneva on November 16-20th.

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The Premiumization Trend in Pet Products

In the pet market, “premium” products are becoming increasingly popular. This premiumization of products have been a trend for over 10 years according to a Packaged Facts’ report. While the pet market has not been experiencing large growth in terms of money spent the gains it has seen are primarily due to the availability of high priced, high quality products according to Packaged Facts Research Director, David Sprinkle.

Sprinkle said, “Absent any other galvanizing factors toward increased pet ownership, ongoing premiumization is crucial if pet market dollar sales are to continue to rise." So what makes a product “premium”? Premium products contain special nutraceutical ingredients, use “human-quality” ingredients, and follow human food trends such as the use of superfruits, ancestral grains, and exotic proteins.

Nutraceutical treats are becoming more popular and this trend has been linked to the “graying” of the pet population. Many treats contain supplements that claim to improve pet health and minimize discomfort.

Naturally, premium products cost more than standard brands. According to Packaged Facts, standard brands often have a 20% markup while premium brands average 30% markup, and super premium foods can reach 40% markup. Consumers are often willing to spend more money for premium products because they claim to offer multiple benefits (for example, treats that help health conditions).

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What Are Americans Feeding Their Pets and Why?

Pet Food Industry reported that according to GfK, sales of raw freeze-dried pet food increase 64% in the past year. Raw frozen pet food sales increased 32% in the same time period. These numbers clearly show that raw foods are becoming more popular with pet owners.

Allprovide (a pet food manufacturer) surveyed 1,826 pet owners in the United Sates asking about their pet food preferences, knowledge, and interests. Here are the summarized Allprovide study results:

• Thirty-three percent would be interested in feeding their 
  pets a fresh, raw food diet.
• 
  Forty-six percent said they hadn’t heard of the raw pet food diet prior to the survey.
• Thirteen percent of those surveyed already do feed their pets raw food.
• Pet health is the number one factor (94%) for consumers when choosing their pet’s food.
• Freshness and quality (89%) are the second motivating factors for purchase.
• Cost is the third consumer consideration (65%) in purchase.
• Eighty-nine percent of pet parents currently feed their pets processed foods and fillers.
• Twenty-three percent of those who feed their pets processed foods report their pets suffer from skin problems, arthritis, kidney problems or food allergies.
• The same number of respondents (23%) report that their veterinarians have suggested a change in diet to treat those illnesses.
• Thirty-three percent would prefer to have their pet food delivered on a regular schedule, as opposed to 
  buying it in-store.
• Fifty-five percent would prefer to give their pets fresh 
  food that can be served naturally or cooked.

While 33% of dog and cat owners are interested in feeding their pets a raw diet, several large organizations including the United States Food and Drug Administration and the American Veterinary Medical Association warn people about the potential dangers of raw food. In the end, only time will tell how the evolution of pet food develops and the long-term risks/benefits associated with different foods.    

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