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Economic Watch: China's pet economy 3.0 -- Pampering paws and claws

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E-mail Xinhua, February 15, 2025

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BEIJING, Feb. 15 (Xinhua) -- A Goldman Sachs report said that for the first time in 2024, the number of pets in China had surpassed the number of children under the age of four. It further projects that by 2030, the former will nearly double the latter in number.

As a reference, China was home to 73.4 million infants and toddlers under four years old in 2021; a number that has dwindled in recent years due to birth rate declines.

When compared with the 2025 China Pet Industry White Paper, however, Goldman Sachs' calculation was quite conservative.

The white paper noted that the pet population in China's urban area alone had reached 120 million in 2024, with the urban pet (dog and cat) consumption market exceeding 300 billion yuan (about 41.8 billion U.S. dollars).

Latest data released by China's Ministry of Housing and Urban-Rural Development showed that China had an urban population of around 930 million in 2023, which means, on average, one out of every eight urban residents, regardless of age or gender, owns a pet.

Along with that, is an explosive pet consumption market in China, the world's second-largest economy and most populous country.

FROM "FRIENDS" TO "CHILDREN"

Previously, people would call their pets "friends" -- it was all about companionship. But today, the new generation of pet owners treat their pets like their own flesh and blood. It is not just a name change, but a whole new level of love and care.

Shen Jing pampers her fur baby in every aspect of life. From meticulously choosing high-quality dog food brands, ordering custom-made treats and toys, scheduling regular trips to the grooming parlour, to occasionally splurging on creative styling, the 23-year-old treats her Golden Retriever as if it were her own child.

"I spend around 1,500 yuan per month on my dog, mostly on food, snacks and toys, with some going toward healthcare expenses," she shares.

Pet owners are generous parents, with some willing to pay a jaw-dropping 5,867 yuan just for a pet toilet, far exceeding average prices for a human version.

"My dog is way too chubby!" said Gao Boxin, 26, who purchased a pet treadmill for his Corgi Taotao. He even splurged on a heart rate monitor and cooling foot patches to sooth his dog's paws after a workout. Despite feeling a pang in his heart when he thinks about buying a sports watch for himself, when it comes to his pet, he throws money at it without a second thought.

FROM PET ECONOMY 1.0 TO 3.0

China is embracing the era of pet economy 3.0.

In the 20th century, during the pet economy 1.0 era, pets were primarily kept for practical purposes -- dogs for guarding homes, cats for catching mice, and chickens for producing eggs. By the 2000s, the pet economy 2.0 era emerged, which was marked by a shift toward companionship, as people began to value pets for emotional interaction. Since 2015, the pet economy has evolved into the 3.0 era, where pets have achieved an elevated status, accompanied by a niche market serving diversified, pet-oriented consumption needs.

Around four years ago, Three Squirrels, a prominent Chinese snack brand, launched a subsidiary focused exclusively on dog food.

This move into pet food production is far from a downgrade. In fact, some pet food standards surpass even those for human food as the animals' digestive systems, metabolic processes, and physiological structure are individually different.

Hu Zimeng, general manager of Jiangsu Weihong Pet Products Co., Ltd. in Jiangsu Province, east China, told Xinhua that their sales of pet snacks maintained an annual growth rate of over 10 percent in recent years.

This trend highlights the increasing demand for premium pet products and underscores the evolving view of pets as beloved members, especially pampered babies of the family.

Currently, the pet industry chain can be broadly categorized into three segments. The upstream segment primarily covers breeding and trading, while the midstream segment includes products such as pet food, supplies, toys, and apparel. The downstream segment is service-driven, encompassing pet grooming, boarding, photography, medical care, insurance, and funeral services, etc. The downstream services, in particular, are witnessing remarkable growth trends.

PETS' CONSUMPTION UPGRADE

As pet owners' emotional bonds with their pets deepen, the standards for pet care are steadily mounting, giving rise to a growing trend of refined and meticulous pet parenting.

Two years ago, Xu Ling, from the city of Nanjing, started paying attention to her dog's long-term health. In addition to an annual health check-up package and pet insurance, she also took online courses to learn how to keep her pet healthy, like how to feed it the right food and control its weight.

Services like single-furnace cremation, ashes storage, grooming after passing, custom memorabilia, and farewell ceremonies are now widely available. In the past six months alone, over 1,100 new pet funeral businesses have popped up, according to Tianyancha, a corporate information provider.

The 2024 edition of trademark categories has added a new one for pet jewelry, which reflects the market's positive response to the growing demand for pet-related products.

Data from iiMedia Research shows that China's pet industry market size is expected to reach 811.4 billion yuan by 2025, indicating a broad development prospect.

In this regard, industry insiders believe that the development of the pet economy can be supported through measures such as promoting legislation, strengthening supervision and improving services, and expanding pet-themed projects. Enditem