Read More《1.2亿只猫狗，养得出多家上市公司，却养不出一家国民品牌》
Positive Reviews: The Pet Economy Booms, and Niche Segments and Innovative Models Revitalize the Industry
The rise of China’s pet economy is a typical example of the resonance among consumption upgrading, emotional needs, and industrial innovation. From 120 million “furry kids” to a market scale of 300.2 billion yuan, from small OEM factories to listed companies, and from single food products to smart supplies, the pet economy is expanding in a “boundless” manner, demonstrating strong industrial vitality and commercial potential.
First of all, the “emotional” and “refined” market demand has promoted the prosperity of multiple segments. As the news mentioned, against the backdrop of a society with over 150 million single – person households and 280 million elderly people, pets have transformed from the “utility type” (guarding the house) to the “family – member type.” This emotional projection has directly given rise to the consumption logic of “pets are like children.” Pet owners have replicated the “meticulous care” model from the maternal and infant segment to the pet field, leading to a simultaneous explosion in the four core segments of food, healthcare, supplies, and services: In 2024, the market scale of pet food reached 158.5 billion yuan (accounting for 52.8%), healthcare 84.1 billion yuan (28%), supplies 37.2 billion yuan (12.4%), and services 20.4 billion yuan (6.8%). This “full – scenario coverage” demand structure allows each niche segment to nurture listed companies. From Youpai Technology’s pet pee pads and Yiyi Co., Ltd.’s hygiene products to GuaiBao Pet’s main pet food and Puleike’s vaccines, and even Gree’s pet air purifiers and Taobao’s pet language translators, all verify the business logic that “even the most niche demand can turn into a big business.”
Secondly, domestic enterprises have achieved a breakthrough through the dual – wheel drive of “OEM accumulation + self – owned brand.” In the early days, most Chinese pet enterprises relied on overseas OEM (for example, Youpai Technology produced for Amazon, and Yiyi Co., Ltd. exported to Japan). However, with the rise of the domestic market, enterprises have shifted from “making wedding dresses for others” to “building self – owned brands.” Take Youpai Technology as an example. The proportion of its self – owned brand revenue increased from 54.4% in 2022 to 73.9% in 2024, and the gross profit margin rose from less than 20% in the OEM model (such as Yiyi Co., Ltd.) to 32.1%. GuaiBao Pet’s “Meatyway” double – blend pet food, with its cost – effective strategy of “formula comparable to foreign brands but priced at only one – third,” achieved a single – year GMV of over 2 billion yuan on Douyin. In 2024, its revenue reached 5.245 billion yuan, and the net profit increased by 45.7% year – on – year. This path of “first accumulating supply – chain capabilities through OEM and then seizing the domestic market with self – owned brands” provides a replicable model for Chinese enterprises in global competition.
Finally, cross – border and intelligent innovation have broadened the industrial boundaries. The “boundless” nature of the pet economy has attracted cross – border players such as pharmaceutical companies (Xiuzheng Pharmaceutical), real – estate developers (Sun Hung Kai Properties), and home – appliance giants (Gree, Xinbao Co., Ltd.). For example, Gree’s “Pet Love” pet air purifier integrates UV lamp bead disinfection, formaldehyde filters, and a cat – teasing design, combining home – appliance technology with pet needs. Relying on its advantage in small – home – appliance OEM, Xinbao Co., Ltd. will increase its investment in pet appliances in 2025. Technology companies such as Baidu and Xiaomi have turned the concept of “scientific pet – keeping” into a standard through products like smart pet feeders and health – monitoring collars. More notably, the users’ demand for “emotional connection” has given rise to “new species” such as pet language translators (with a 740% increase in transactions). This innovation based on users’ psychology further verifies the upgrading trend of the pet economy from “functional satisfaction” to “emotional satisfaction.”
Negative Reviews: The Pain Points of a “Large but Fragmented” Industry Are Prominent, and Brand Power and Localization Abilities Need to Be Improved
Although the pet economy has a large scale and strong growth momentum, its problems of being “large but not strong” and “fragmented rather than concentrated” are also prominent. From enterprise competition to the industrial ecosystem, multiple challenges are restricting the industry from developing towards higher quality.
Firstly, the reliance on exports and the OEM model have led to an obvious profit ceiling. As the news mentioned, the proportion of Youpai Technology’s overseas revenue increased from 46.69% to 62.51%, and Yiyi Co., Ltd.’s export proportion exceeded 90%. Although the overseas gross profit margins of the two enterprises (35.65% for Youpai and not clearly stated for Yiyi but only 19.63% in the OEM model) are higher than the domestic ones, over – reliance on the overseas market means that enterprises are vulnerable to international economic and trade environments (such as tariffs and supply – chain fluctuations). More importantly, enterprises have weak bargaining power in the OEM model, and their profits are squeezed. Due to its mainly OEM business, Yiyi Co., Ltd.’s gross profit margin has long been lower than the industry average. Although Youpai Technology has been developing its self – owned brand, its domestic gross profit margin (25.48%) is still significantly lower than the overseas one (35.65%), reflecting the lack of brand premium ability in the domestic market. This “hard – earned money” model can hardly support long – term technological R & D and brand building for enterprises.
Secondly, the absence of “national brands” and the low industry concentration are evident. Compared with the global market (where the CR5 of Mars and Nestle reaches 51.6%), the CR5 of China’s pet – food market was only 9% in 2024, and the market shares of leading enterprises (such as GuaiBao Pet and Zhongchong Co., Ltd.) have not exceeded 5%. This fragmented pattern is due to the late start of the industry (China’s pet economy has only truly boomed in the past decade) and enterprises still being in the “territory – grabbing” stage. However, the deeper reason is the lack of brand power. Foreign brands (such as Mars and Royal Canin) have occupied consumers’ minds through early market education (presenting high – end and professional images), while domestic brands mostly rely on “cost – effectiveness” competition and have not established a “professional and trustworthy” brand perception. For example, although GuaiBao Pet’s “Meatyway” has high sales, users’ perception of it remains at “cheap and useful” rather than “high – end quality.” Youpai Technology’s “Honeycare” is a leading brand on Amazon, but it has limited influence in the domestic market. This embarrassing situation of “being popular abroad but not at home” hinders domestic brands from becoming “national – level” brands.
Thirdly, there are “pseudo – demands” and heavy – asset risks in some segments. The pet – healthcare segment is known as a “money – making segment” (Puleike’s vaccine has a gross profit margin of 53.36%), but the heavy – asset model of pet hospitals (high rent and labor costs) leads to losses when expanding. The gross profit margin of New Ruipeng’s over 1,000 stores is only 5%, and it failed to go public in the US stock market in 2023. In addition, although some innovative products (such as pet language translators) meet emotional needs, their technological maturity is questionable (“it’s hard to say whether they are accurate”), and they may become “IQ tax” products due to poor user experience, damaging the industry’s credibility. The influx of cross – border players may also intensify homogeneous competition. For example, if home – appliance enterprises produce pet air purifiers and pharmaceutical companies produce deworming drugs by simply “applying” their existing technologies to pet needs without deeply understanding pet behavior and health pain points, they are likely to fall into the trap of “innovating for the sake of innovation.”
Advice for Entrepreneurs: Deeply Explore Demands, Strengthen Brands, and Balance Expansion and Risks
Facing the opportunities and challenges in the pet economy, entrepreneurs need to grasp the core contradictions and build competitiveness in three aspects: “demand insight – brand building – risk control”:
Precisely capture both “emotional” and “functional” demands and avoid pseudo – innovation. The essence of pet consumption is “paying for emotions,” but emotions need to be realized through functions. Entrepreneurs need to conduct in – depth research on pet behavior (such as the need for privacy in cat litter boxes and the need for comfort in pee pads for senior pets) and user pain points (such as the high cost of pet healthcare and the lack of transparency in diagnosis), rather than blindly following the “intelligent” or “emotional” concepts. For example, when developing smart products, entrepreneurs should prioritize solving urgent needs such as “feeding accuracy” and “cat – litter deodorization efficiency” rather than just pursuing entertainment functions like “language translation.” When entering the healthcare segment, they can explore the light – asset model of “community clinics + remote consultation” to reduce operating costs.
Shift from the “OEM mindset” to the “brand mindset” and build user awareness. Although the OEM model can quickly accumulate cash flow, in the long run, entrepreneurs need to transform into self – owned brands. It is recommended that entrepreneurs: ① Clearly define the brand positioning: whether it is “high cost – effectiveness” (such as Meatyway), “professional and high – end” (such as customized food for senior pets), or “emotional companionship” (such as a peripheral brand featuring “pet diaries”); ② Focus on a single category and go deep: avoid being “big and all – encompassing.” First, establish an “expert” image in a niche segment (such as pet pee pads or main pet food), and then expand to related categories; ③ Make good use of content marketing: convey brand value through short videos (such as showing pet usage scenarios on Douyin), KOLs (pet bloggers’ product reviews), and user – generated content (showing pet – using feedback), rather than relying solely on platform promotion (Youpai Technology’s sales expenses account for over 15%, and it needs to optimize the investment efficiency).
Balance the domestic and overseas markets and reduce the risk of over – reliance on exports. For enterprises relying on exports, they need to simultaneously develop the domestic market: ① Study domestic users’ habits: for example, since cats account for over 55% of pets in China, they can develop cat – litter and cat – climbing frames accordingly; ② Optimize the channel structure: in addition to e – commerce platforms, expand offline scenarios such as pet stores and pet hospitals to enhance user reach; ③ Pay attention to policy dividends: as many domestic regions are implementing “civilized pet – keeping” policies (such as regulating dog – walking and piloting pet insurance), they can develop compliant products (such as degradable pee pads and electronic dog tags) around these policies.
Be vigilant about heavy – asset expansion and focus on building core capabilities. Although segments such as healthcare and services have high profit margins, entrepreneurs need to be cautious when investing: ① Pet hospitals can adopt the model of “regional chains + technology sharing” (such as sharing testing equipment and training veterinarians) to reduce the cost of single stores; ② Cross – border enterprises need to leverage their original advantages: for example, home – appliance enterprises can rely on their supply chains to produce cost – effective smart supplies, and pharmaceutical companies can focus on high – technology – barrier categories such as vaccines and deworming drugs, avoiding “cross – border for the sake of cross – border.”
The “golden decade” of China’s pet economy has just begun. To move from “nurturing listed companies” to “nurturing national brands,” enterprises need to shift from “making quick money” to “making long – term efforts” and from “meeting demands” to “leading demands.” Only in this way can they truly build a Chinese – owned pet – industry ecosystem in the blue ocean of the emotional economy.
