Developing Asia-Pacific markets drive regional pet care market

Author: Lee Linthicum

Date published: 19 Sep 2007

Asia-Pacific is a region containing many emerging markets – such as China, India, Thailand and Vietnam - characterised by relatively low levels of disposable income and a still developing distribution infrastructure. As a result, the highly developed Japanese market dominates regional sales. However, the region's developing markets are slowly catching up.

Japanese dominance waning

Despite the continued dominance of the Japanese market, its share of pet food and pet care value sales has been in steady decline in recent years. In 2006, Japan accounted for nearly 70% of regional pet food and pet care sales by retail value. However, in 2002 the country accounted for a more significant 75% of regional value sales. Likewise, 2006 retail value sales for pet food and pet care products in Japan increased by only 2.6% from 2005, compared to regional sales growth of a more robust 4.3% over the same period.

Important developing markets like China, India, Thailand and Vietnam all saw retail value sales of pet food and pet care products increase in excess of 10% in 2006 according to the latest Euromonitor International findings. Of these, Thailand and India both counted among the 10 fastest growing markets globally between 2005 and 2006.

Dynamic Chinese pet care market expanding

At more than EUR500 million in 2006, China remained the region's second largest market mainly because of the size of its population. However, the market has also shown strong growth – increasing at an average rate of nearly 13% since 2002 - as urbanisation has increased consumer purchasing power, transformed lifestyles and boosted the development of distribution infrastructures. Consequently, China saw an increasing consumer shift from feeding pets table scraps to purchasing prepared pet food. Similar developments have also driven strong growth in markets like India, Vietnam, and Thailand.

Nevertheless, it must be stressed that sales of items such as prepared dog and cat food remain very uneven across these markets with the highest concentration in major cities. In these urban areas, which also have more developed retail networks than other areas, consumers have higher levels of purchasing power, and are exposed to more intense manufacturer marketing activity. However, this too is slowly changing.

In China, for example, pet superstores like Cool Baby are expanding from Shanghai and Beijing to second-tier cities like Nanjing and Yantai according to Euromonitor International's research. This will offer pet owners in such cities better access to a wider variety of branded pet food and pet care products. In turn, factors such as this should support continued retail sales growth for both the developing markets of Asia and, by extension, the region as a whole.

Pet Food and Petcare