1 Overseas experience shows that the pet industry has a strong ability to go through cycles
The global pet industry is mature, and the United States is the largest market. The pet industry covers many fields such as raising, eating, wearing, playing, and using. At the current stage, the global market has developed relatively maturely. Common Thread data shows that in 2022, the global pet industry will reach US$261 billion, a year-on-year increase of 12.5%. From 2022 to 2027, the CAGR of the global pet industry will be 6.1%, reaching a scale of US$350 billion. According to the "2022 Global Pet Market White Paper" data, in 2021, the US pet industry will account for more than 40% of the world, making it the largest pet market.

In 2021, the US pet industry will grow rapidly, and the industry has a strong ability to go through cycles. According to APPA data, in 2021, the market size of the US pet industry will be US$123.6 billion, a year-on-year increase of 19.31%. From 2011 to 2021, the CAGR will be 9.26%. Combined with the actual growth rate of US GDP, the pet industry is less affected by economic fluctuations. For pet owners, pet-related consumption is rigid demand, which makes the industry have a strong ability to go through cycles.

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2 With the rapid development of China's pet industry, supplies and diagnosis and treatment have become potential markets
China's pet industry is in a period of rapid development. Compared with the United States, China's pet industry started relatively late. Before the 1990s, China's pet policy was basically based on "prohibition of breeding". The establishment of the China Small Animal Protection Association in 1992 prompted the rise of the concept of "pet companion". With the gradual change of the "prohibition" policy, until 2003, Beijing issued the "Beijing Dog Raising Management Regulations", and then all over China successively issued relevant regulations on dog breeding, and the restrictions on the number of pets were gradually relaxed. Since 2011, China's pet industry has been in a period of rapid development.
The scale of China's pet industry will approach 270 billion yuan. As China's pet industry enters a period of rapid development, the market size of China's urban pets (dogs and cats) has grown from 22.1 billion yuan in 2011 to 249.6 billion yuan in 2021, with a CAGR of 27.43%. It is expected that the scale will reach 269.9 billion yuan in 2022 . Specifically, the domestic pet dog market is larger than pet cats, and will be 143 billion yuan in 2021, a year-on-year increase of 21.2%.
Pet dogs are the mainstream pet type in China, among which large dogs are more popular. Data from iResearch shows that in 2021, the average pet owner in China will have 1.8 types of pets, of which pet dogs account for up to 70%, followed by pet cats at 56%. In dog-raising households, large dogs are the most popular, accounting for 56%.
Pet staple food has a high penetration rate of just-needed products, and supplies and medical supplies have sufficient potential. As a rigid demand product, pet staple food has a penetration rate of 93.2% according to the "2021 White Paper on China's Pet Industry", followed by medicines with a penetration rate of 83.5%. The penetration rates of diagnosis and treatment and supplies are 75.8% and 75.2%. From the perspective of consumption structure, although the proportion of pet food (staple food + snacks + nutritional products) has declined in recent years, it will reach 51.5% in total in 2021, occupying a dominant position. The proportion of consumption in pet products and medical related fields increased by 1.1pct. and 10.2pct. respectively compared with 2019. From the perspective of superimposed penetration rate, we believe that pet supplies and diagnosis and treatment will become potential markets for the development of the industry in the future. In the following, we will focus on the discussion and analysis of the types of pet food that are just in demand, and the pet supplies of potential types.

3 Multiple drivers work together to promote the future development of the pet industry
With a pet penetration rate of 20% in China, there is a lot of room for development. According to Feishu Shennuo's report data, in 2021, the pet penetration rate in the United States will rank first in the world, and more than 70% of American households own dogs and cats. Of these, nearly 70 million U.S. households own dogs, and more than 40 million households own cats. In contrast to China, the penetration rate of pets in China will be about 20% in 2021. JD.com’s “White Paper on China’s Pet Industry Trend Insight in 2022” shows that the penetration rate of pet households will be 20% in 2022. On the whole, the penetration rate of pets in China is far behind that of overseas developed countries. Direct benchmarking shows that China's pet industry has a lot of room for development in the future.
In the post-epidemic era, the development of China's pet industry may welcome another good opportunity. Taking the United States as an example, the new crown epidemic has catalyzed the enthusiasm for raising pets. In May 2020, in the early stage of the new crown epidemic in the United States, the proportion of pet adoptions in the United States was only 6%-7%, and it will increase to 14% by November 2021. According to the data of Huajing Industrial Research Institute, it will remain at 14% by February 2022 adoption ratio. We believe that during the period of strict prevention and control of the new crown epidemic in China, residents spend significantly longer time at home. For people living alone, the absence of companionship and spiritual comfort may have become a new pain point exposed in their lives in recent years. In this context, the companionship and emotional value of pets are further highlighted. We are optimistic that under the sound economic foundation and expected income growth, online and offline (34.000, -2.19, -6.05%) scenarios will recover rapidly, superimposed on changes in population structure and consumption behavior, and will promote the expansion of pet owners and the increase in the amount of pet consumption. promote.

Got it here: Pethuhou.com 
4 The development of the pet industry already has a good consumer economic foundation
A good economic foundation will help the pet industry go further. According to the research results of the School of Veterinary Medicine of China Agricultural University, when a country's per capita GDP reaches US$3,000-8,000, the pet industry will develop rapidly. Based on the calculation of the average exchange rate of the RMB against the US dollar in the past 12 years, China's per capita GDP exceeded US$5,000 in 2011 and exceeded US$10,000 in 2019. During this period, China's pet industry has achieved considerable development, with an average growth rate of 32.67%. Although affected by the epidemic in the past three years, the growth of the pet industry has fluctuated, but the overall growth has always been better than the growth of GDP per capita, and the industry has strong anti-risk resilience. On the other hand, China's per capita disposable income exceeded US$3,000 in 2014 and exceeded US$5,500 in 2022. We believe that the ability of the pet industry to go through the economic cycle is relatively strong, and China has a good foundation in terms of economy and consumption at the current stage, which will jointly support the further growth of the pet industry in the future.