In Depth: China’s Pet Boom Bites Back

China’s pet economy is experiencing significant growth, driven by urban youth who increasingly view pets as emotional companions in their fast-paced lives. This thriving multibillion-dollar market has benefited from rising demand for domestic brands and the expansion of e-commerce platforms. However, the industry is grappling with challenges, including price wars reducing profits, closures of veterinary clinics, unethical breeding practices, and declining investment in the sector [para. 1][para. 2].

The pet market’s boom is evident in the spending patterns of Chinese urban pet owners, who spent over 300 billion yuan ($41 billion) in 2024, reflecting a 7.5% year-on-year increase. Younger demographics, comprising nearly 67% of pet owners, drive this market, which is also influenced by delayed marriage patterns and growing numbers of single, stressed individuals turning to pets for companionship. As of 2024, over 100 million households in China owned pets, and 45.4% of pet owners were single or unmarried [para. 5][para. 6]. Domestic brands are ascending, supported by consumers’ focus on local alternatives amid worsening China-U.S. trade tensions and the rise of e-commerce. Pet food, accounting for 52.8% of pet-related spending, is the primary expense. In 2024, all top five best-selling pet food brands on Tmall during the Double 11 shopping festival were Chinese, a shift from foreign dominance five years ago [para. 7][para. 10].

Despite the opportunities, the pet industry is shifting toward profitability and operational efficiency. Growth strategies are being replaced by the need for sustainable operations. Price wars among domestic brands in the mid-to-low-end market are prevalent, although premium segments remain dominated by U.S. brands, which accounted for 69% of China’s imported pet food in 2024. Meanwhile, domestic players are exploring emerging markets like Southeast Asia [para. 3][para. 11][para. 13]. Companies like Guangzhou-based Panda&Piggy are expanding into cross-border e-commerce in the region, leveraging platforms like Lazada and Shopee [para. 16][para. 18].

Veterinary care, while accounting for a significant 28% of pet-related spending, has faced profitability challenges, especially in smaller independent clinics which make up 75% of veterinary hospitals. Larger chains like New Ruipeng Pet Group, which has reported significant losses, are scaling down operations. Notably, there is a critical shortage of licensed veterinarians; many choose higher-paying roles in pet food research rather than veterinary practice. The lack of specialized pharmaceuticals remains a hurdle in providing adequate medical care for pets in China [para. 20][para. 23][para. 24].

Ethical concerns cloud the industry, with a significant number of pet owners purchasing pets rather than adopting, fueling unethical breeding practices in unauthorized facilities. Controversial practices like “pet blind boxes,” which sell random or sick animals, highlight the lack of regulatory oversight. Advocates are calling for stricter breeding standards to address these issues at their source [para. 27][para. 28].

Meanwhile, the pet industry has seen a sharp decline in investments — from 10.69 billion yuan in 2021 to 2.35 billion yuan in 2024. Companies are now focusing on profitability and differentiated services, such as pet funerals and niche services. However, regulatory challenges persist, especially in areas like pet funeral services, where no clear authority governs the sector [para. 30][para. 32].

Despite these challenges, the long-term prospects remain optimistic as the pet sector’s growth is expected to outpace the broader consumer market for years to come. Experts recognize it as a “blue-ocean opportunity” for sustained development [para. 33][para. 34].