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Expanding Mainland Market Targeted by Overseas Pet-Product Suppliers

With the pet-products market now reaching saturation point in many of the more developed economies, its rapid growth across the mainland led to a surge in the number of overseas exhibitors at this year's China International Pet Show.

Photo: One of the family: Mainland pet owners are increasingly looking to cosset their canine chums.
One of the family: Mainland pet owners are increasingly looking to cosset their canine chums.
Photo: One of the family: Mainland pet owners are increasingly looking to cosset their canine chums.
One of the family: Mainland pet owners are increasingly looking to cosset their canine chums.

With the pet-product market all but saturated in many of the world's more developed countries, the potentially huge size of the China market, as well as its surge in pet-ownership levels, has proved to be an irresistible lure for many of the global businesses targeting the sector. Inevitably, then, this year's China International Pet Show (CIPS) had way more than its fair share of overseas exhibitors.

It has been fairly well documented that the Chinese pet market has undergone a huge expansion in recent years. Its current level of dog ownership, for instance, is about 27.4 million, a figure that puts it in third place globally, behind only the US and Brazil. On the feline front, China does better still. With the country's level of cat ownership now standing at 58.1 million, it is second only to the US.

Despite such impressive numbers, the sheer size of China's population – more than four times that of the US – means the current ratio of pets to households is still relatively low. In terms of other telling statistics, some 73.2% of all pet owners in China fall within the 20-35-year-old category and are, predominantly, female.

Not surprisingly, the largest product sector within the overall pet-care industry is food. In China, food accounts for 35% of all pet-related spending, with the overseas players – notably Mars Foods, Nestlé and Royal Canin – together holding a 70% share of the sector.

With pets increasingly seen as family members, however, demand for food that is guaranteed to be both healthy and safe has grown in recent years. One company looking to ride this particular wave was Genoa-based Agras Pet Foods, purveyors of the Schesir (super premium) and Stuzzy (premium) brands of cat and dog foods.

Keen to highlight the company's commitment to high-quality content, Export Manager Andrea Terrile said: "As we are now seeing pets regarded as family members, even in Africa and other early stage markets, we only use ingredients that are also cleared for human consumption.

"For us, it is the developing countries that are very much our key expansion markets, with China our priority. While we have been selling in Hong Kong for 10 years now, we only made our first inroads into the mainland market four years ago.

"In terms of this particular event, this is the fifth year we have exhibited here. Over that time, we have seen it undergo a massive expansion, while also attracting more and more buyers, both domestically and from overseas. In our first year, we only took a tiny stand, but next year it's going to be around 100 sq m."

Another company looking to capitalise on this demand for higher-quality pet foods was Allanasons. Founded in 1865, this Mumbai-based business is said to be India's largest producer of water-buffalo meat. It moved into the pet-food sector in 2007.

Outlining the company's current positioning, Sales Director Sanjay Dighe said: "At present, we account for 70% of all of India's exports in the pet-food sector. We supply 70 companies in 23 countries, all of which share our belief in the benefits of water-buffalo meat as a pet-food staple. It's low in fat and cholesterol, while being high in protein and vitamins.

"In terms of this particular show, it's been very good for us this year as there is a high level of attendees. We've already met with a wide variety of buyers, with Asia and Europe both very well represented."

Photo: The Schesir range of premium cat food.
The Schesir range of premium cat food.
Photo: The Schesir range of premium cat food.
The Schesir range of premium cat food.
Photo: Sealand’s feline-friendly fountain.
Sealand's feline-friendly fountain.
Photo: Sealand’s feline-friendly fountain.
Sealand's feline-friendly fountain.

As well as seeking out better-quality food, many pet owners are also said to be on the lookout for more efficient ways of keeping their four-legged friends hydrated. One company that has been swift to move into this particular niche is Kowloon-based Sealand Holdings. Originally a manufacturer of fish-tank pumps, the company has now diversified into producing dog- and cat-friendly drinking fountains.

Aware that many of the existing products on the market were cheap, but notoriously inclined to terminally malfunction after a comparatively short period of usage, Sealand set out to create something quite different. Repurposing its existing fish-tank pump systems, it developed a more robust drinking fountain, which came with the reassurance of a three-year warranty.

Explaining the appeal of its range, Stephen Lam, the company's Business Development Manager, said: "Pets prefer moving water and our water fountains stop them from drinking from taps or toilets."

The range also features a surface skimmer, designed to aerate the water and ensure it remains saliva and dirt free, while also having the facility to dissolve dental-care tablets. Explaining this latter innovation, Lam said: "The tablets contain glucose oxidase, an enzyme that helps keep teeth clean, while also acting to reduce incidences of bad breath. It's a far simpler solution than brushing your dog's teeth."

Within Asia, the company's two-litre Cat H2O system is the most popular of its products, with its compact size also appealing to dog-owners. By contrast, its considerably larger Dog H2O unit is its best-seller in the US and the EU.

In addition to doggy dental care, canine coiffuring and other forms of pet grooming are also growing in popularity. Indeed, this particular segment proved lucrative for many of the exhibitors at this year's event, including Kanistar Pet International.

Originally a supplier of more conventional veterinary products, its grooming range has provided the Shanghai-based company with a highly profitable second string. Its 10-year-old Kiss brand of dog-grooming products has proved particularly successful and has long been a mainstay of its EU and US exports.

Clearly more than happy with the way the business was developing, Sales Director Merry Lee said: "Every year, we come to this show and every year we get a substantial number of new orders. At present, we are particularly focused on our grooming products, which include a clipping, washing and a two-stage drying system designed to help you style your dog."

While Kanistar was focused on making dogs look good, Dalian-based Kind Pet's emphasis was more on stopping cats looking bad, with its range of cat-litter products designed to reduce instances of unwanted moggy droppings. Previously largely engaged in OEM business, last year it entered the cat sector in its own right with the launch of its proprietary Americalitter brand.

Expanding upon the company's current distribution priorities, Business Development Manager Summer Liu said: "At the moment, we sell through Amazon and we also have deals in place with a number of pet-store chains. Overall, though, our focus is very much on exports and we don't really target the domestic market.

"Our litter is manufactured solely from environmentally-friendly materials with no chemical additives. This makes it considerably more expensive than the lower-quality products that dominate the mainland market."

Another business that had formerly eschewed the domestic market was Shanghai-based Younsaint Industrial, the company behind the Ugoo range of cat houses, scratchers, litter trays and other pet accessories. Of late, however, it has begun to rethink its attitude to China.

Explaining this apparent change of heart, Sales Manager Sasha Peng said: "At present, our China sales are down solely to a few Taobao transactions. Next year, though, we are going to be targeting the domestic market far more actively.

"With the mainland market continuing to expand and the greater willingness to spend on the part of pet owners, we have had to reassess the opportunities. For us, there has never been a better time to boost our profile closer to home."

Photo: The 2017 China International Pet Show: A must for Dalian’s dog lovers and Chengdu-based cat fans.
The 2017 China International Pet Show: A must for Dalian's dog lovers and Chengdu-based cat fans.
Photo: The 2017 China International Pet Show: A must for Dalian’s dog lovers and Chengdu-based cat fans.
The 2017 China International Pet Show: A must for Dalian's dog lovers and Chengdu-based cat fans.

The 2017 China International Pet Show (CIPS) took place from 16-19 November at the Shanghai New International Expo Center.

Chen Rong, Special Correspondent, Shanghai

Content provided by Picture: HKTDC Research
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