China enters dog-eat-dog pet industry

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China Business

 

China enters dog-eat-dog pet industry

Asia Times

Jul 19, 2006

By Candy Zeng

 

SHENZHEN - With China's fast economic development, more affluent urban

residents now have the money and leisure time for pets. As a result, a

thriving pet market has emerged and is growing fast, attracting investors at

home and abroad.

 

Some researchers say the pet market will grow quickly where per capita gross

domestic product exceeds US$3,000.

 

Major Chinese cities, such as Beijing, Shanghai, Guangzhou and Shenzhen,

have reached this point. Now, the typical Western scene of owners walking

their dogs on streets and in parks can be more frequently seen in such

communities.

 

Accordingly, pet products - from food and shampoo to toys - are now on

shelves in more and more supermarkets, which sometimes perplexes those who

do not own pets.

 

It's estimated that the Chinese are breeding at least 100 million pets,

including dogs, cats, fish and other animals, with the market potential

reaching 15 billion yuan ($1.9 billion). The pet boom, however, is just the

the beginning of an emerging " pet economic sector " in China. Some experts

predict the industry could hit 40 billion yuan in sales by 2010, with the

number of pets increasing to 150 million. The pet boom has also boosted

China's media as specialized publications and Internet websites have

mushroomed.

 

In Beijing, the number of pet dogs could reach more than 1 million, with

some 530,000 registered with the local authority by end of June.

 

" Generally speaking, about 30% of dog owners would register their dogs with

government authorities, so conservatively the total pet dogs shall exceed 1

million, " Wang Decheng, chairman of a Beijing pet services center, was

reported saying on the popular Chinese pet website www.wwpet.com.

 

If an average owner spends 200 yuan a month on a pet in Beijing, the market

is worth as much as 24 million yuan annually. Statistics from Shanghai show

that the average monthly spending on pets amounts to 300 yuan per family.

 

Other major, prosperous Chinese cities also are experiencing the same " pet

craze " . Beijing, Shanghai, Guangzhou, Chongqing and Wuhan are listed as the

top five cities for pet-raising in terms of the number of animals and

spending on pets.

 

In Shenyang, the capital of Liaoning province in northeast China, many are

making a fortune by raising thoroughbred dogs such as chow chows and Tibetan

mastiffs, said Li Zhensheng, vice president of the city's pet businesses

association.

 

The return on sale of such well-bred dogs could be more than 50%, Li

estimated. A thoroughbred chow chow pup is priced at 20,000-50,000 yuan, the

larger Tibetan mastiff will go for 300,000-500,000 yuan in Shenyang.

 

The spinoff revenue generated from pet ownership is also growing steadily.

 

Beijing imported pet food worth 200 million yuan in 2001, an increase of

130% over 2000, according to market research commissioned by an organizer of

the Tianjin International Pet Economy Exhibition held in April. Royal Canin,

a French pet-food supplier, entered the Beijing market in 1995 and has

achieved annual growth of 30% in recent years. Aifen Food (Beijing) raked in

20 million yuan by selling Pedigree and Whiskas brand pet food last year.

 

Some pet shops in major cities boast more than 200 accessories. A dog vest

can cost about 200 yuan, while a bed with temperature adjustment priced at

600 yuan was very popular during the winter in Beijing.

 

Some beauty saloons charge 400-500 yuan for a package that includes bathing,

fur-trimming, hairdressing and nail-cutting for well-bred dogs. It could be

more expensive for those animals entered in pet competitions.

 

Hospitals, schools, online shops, boarding facilities and photography

studios for pets are mushrooming while some traditional pet shops may offer

one-stop services, including food, accessories, consulting, boarding and

matchmaking.

 

The booming pet industry in China is attributed to improved living

standards, the one-child family planning policy, more lonely aged people and

housewives, and the stressed working class.

 

The growing number of pet owners has driven local governments in China to

reconsider the previous tight controls on raising dogs. Beijing revised its

dog regulation in 2003, lowering the dog registration fee to 1,000 yuan and

the annual inspection fee to 500 yuan.

 

In Shenzhen, China's first special economic zone in Guangdong province, the

dog management fee was slashed to 300 yuan from 2,000 yuan annually, and dog

owners were exempted from the initial registration fee of 5,000 yuan from

July 1.

 

While the city's online puppy website hailed the lower fees as " a success of

and spring to dog keepers " , those not as fond of pets felt differently.

 

" It is okay for them to raise dogs in their own house and garden, but I

would really feel scared standing besides a large dog in the lift owned by

any of my neighbors, " one netizen wrote.

 

The official charge on dog breeding may be the highest in Guangzhou, where

the initial registration costs 10,000 yuan and the annual charge is 6,000.

As a result, only 800 dogs are registered in Guangzhou and a few hundred of

some 60,000 dogs living in the city have rabies shots.

 

Shenzhen's new policy is not aimed at encouraging pet ownership, but

offering sufficient services to residents, a spokesman of Shenzhen urban

management office said. It is impossible for the government to forbid dog

ownership, but it wants to manage pet dogs more efficiently through better

services to the owners, he added.

 

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