Competitive landscape

The rapid rise of domestic brands under the background of foreign brand dominance

Foreign brands dominate the pet food industry with their strong brand influence, while excellent domestic brands are the first to break through from e-commerce channels. According to the Chinese Pet White Paper, the market size of the Chinese pet industry reached 134 billion yuan in 2017, with an average annual compound growth rate of around 40% from 2008 to 2017.

The prevalence of the pet economy has also promoted the development of China's pet food industry. From 2010 to 2015, the market size of China's pet food industry increased from 9 billion yuan to about 35 billion yuan, and the market size of pet snacks increased from 1.4 billion yuan to about 6.3 billion yuan.

From the perspective of competitive landscape, the competition in China's pet staple food market is still dominated by brand competition, with foreign brands represented by Royal still occupying a dominant position. Many domestic brands are gradually seeking breakthroughs from e-commerce channels and shaping their brand influence by continuously improving the product quality of staple food; The Chinese pet snack market is in a period of rapid introduction, and the overall competitive landscape is relatively scattered. Excellent domestic brands have gradually emerged with innovative business concepts and good product cost-effectiveness.

Development trends

Under the background of consumer upgrading, the industry will maintain rapid development

Consumer upgrading represents the long-term development trend of the pet food industry, and the core reason for pet food consumption upgrading is the pursuit of health.

Firstly, from the perspective of the consumption upgrade path of "ordinary staple food - mid to high end staple food - customized staple food", pet staple food products are becoming increasingly diversified and personalized, and the pursuit of health is a key factor in upgrading staple food consumption.

At present, the market penetration rate of pet staple food in China is around 20%, while the penetration rate of pet staple food in developed countries such as Europe and America exceeds 95%. We believe that the vigorous development of e-commerce channels and the sinking of terminal demand channels will promote the rapid growth of the pet staple food market.

At the same time, the rise of the cat economy has also become a new engine for the growth of the pet industry. Cat owners pay more attention to health, consider product quality, and pursue personalization in their consumption, which is also expected to promote the rapid development of the pet food industry.

Secondly, the core reason for the rapid growth of the pet snack market is that pet owners hope their pets have a better quality of life, thereby further increasing emotional communication with them. Currently, the Chinese pet snack market is in a period of rapid introduction, and the rapid growth of the pet snack market size is in line with the consumption upgrade path of pet food. With the improvement of the consumption ability of pet owners and the change of consumption habits, the popularity rate of pet snacks will further increase, and the overall market development prospects are broad.