Euromonitor International attended Pet Fair Asia 2016, organised by VNU Exhibitions Asia Co Ltd, which was held in Shanghai from 18-21 August 2016. Besides the tradeshow, Euromonitor International was invited to speak at the International Pet Industry Summit (IPIS) on 17 August 2016.
Optimism for China’s pet care
Euromonitor International opened the session by providing an overview of the pet care landscape and then focussing on the rising potential of emerging Asian markets, while Mrs Jia Tong from goumin.com discussed China’s pet market in detail. China stands in the midst of rapid development for pet care, while post-2020 will see a more matured growth up to 2030. Euromonitor International also expects a strong double-digit value CAGR for pet food in China until 2020, boosted by higher demand for quality among locals. Besides presentations on the industry, there were three central topics focused on by all speakers:
Mr David Ng, CEO of Pet Lovers Centre, the outlets of which account for 29% of total pet shops and superstores in Singapore in 2015, emphasised the importance of advanced automation in stock management, minimising human intervention and improving efficiency with an organised warehouse. During the panel discussion, Mr Kong Heng, Chairman of BC Group, highlighted that pet retailers should standardise sales of pets as pet ownership in China is likely to increase. Consequently, rising pet adoption among Chinese households fuels value sales of pet food, according to Euromonitor International.
Ms Helen Bennie, founder of Shopper Insight Ltd from the UK, discussed the importance of incorporating insights based on hard market data and translating them to actionable campaigns; firstly, to turn initial attraction to purchase; secondly, widen outreach in a sharing economy; and finally, achieve product indispensability. In pet care, emotional connection is essential, similar to the baby care industry, as furkids are increasingly considered by pet owners to be part of the family nucleus. The panel also agreed that the pet care industry should have a common vision of maintaining optimum quality of products. Strong brand reputation is necessary to reform the Chinese pet environment
Throughout the conference, all speakers mentioned that embracing online retailing is essential, but brick-and-mortar stores should also be sustained. Although crowdfunding is hugely popular, with Taobao being backed by Ali Baba to ensure products still exist and enter a new cycle post-crowdfunding, pet care still accounts for a small percentage of sales. Offline pet retail can be improved in several ways: upgrading pet owners’ experience in-store (specifically with regards to smell and noise), unification of service standards, efficiency, and connection with technology. Chained retailers acting as a one-stop service are also expected to become more prominent in China, moving from a fragmented retailing landscape in 2016. Moreover, all panellists acquiesced that adoption of internet retailing will boost China’s pet care retail.
Innovation takes centre stage at Pet Fair Asia 2016
Manufacturers of pet food, pet products including accessories, clothing, bedding, toys, grooming tools, etc., packaging companies, and even consumer appliance brand Dyson, were exhibitors at Pet Fair Asia 2016.
The jewel of the tradeshow was the InnovAction segment, where manufacturers exhibited their latest products. Well-known brands Purina Pro Plan (ranked third in China’s dog food) and Royal Canin (ranked first in China’s dog food) made an appearance with their latest formulae, medium puppy and French bulldog puppy, respectively. Other interesting products included salt- and dairy-free ice cream for dogs by Cyprus brand Max & Frida, and high-protein Parmesan Cheese Pizza by Qingdao Trixie International Trading Co Ltd. These offerings by both international and local players are indicative of a pet industry that is gradually adopting the global pet humanisation trend, as products copying human food are becoming more attractive to pet owners.
Among the innovations seen, technology was a central theme for many companies. GPS devices, auto-feeders, smart drinking fountains, behavioural training tools, and grooming tools like air washers and pet dryers, were some products that reflected Chinese pet owners’ growing interest in smart technology.
Monge & C SpA conducted a product launch on the first day of the tradeshow, dubbed “Monge Hour”; taking the opportunity to introduce itself as a manufacturer of premium pet nutrition from Italy. After sharing how the company leveraged on global trends, including pet owners’ need for natural food, premiumisation, etc., Monge unveiled its new line, BWild. BWild primarily promotes itself as a brand that is as close to a pet’s natural food as possible.
Overall, the conversations during IPIS surrounding the expected growth of the pet care industry (4% value CAGR over 2016-2020) were reflected in the tradeshow. International players are keen on cashing in not only on the Chinese market, but also the rest of Asia, while local players, seeing low barriers to entry, are entering the market thick and fast. This means competition is likely to heat up over the coming few years and larger players are expected to step up in leading the pack. The retail landscape for pet care is also anticipated to see major development, alongside the rapid growth in China’s retail environment.