China’s Pet Market: Cats and dogs are the new family

Walking down the trendy Anfu Road in central Shanghai, you would not be surprised to see an Adidas Originals product launch at a new flagship store, but you might be surprised to learn that you cannot wear any of the clothing yourself, because the entire China-exclusive line is for pets.

From designer clothing to luxury spas, China’s pet market has been booming in recent years, as economic turbulence, changing demographics and growing isolation among young people are all helping pets become a key part of the ‘family.’

“There are various reasons why people started to raise more pets after 2019 and during COVID-19,” says Sory Park, Project Manager at Daxue Consulting. “But unlike in the past where pets were seen as separate, there has been real growth in the desire for companionship, and we see people not having children and replacing them with pets.”

Pet proliferation

The US is still the world’s largest pet market, worth approximately $150 billion in 2024, according to the American Pet Products Association, but China’s recent pet frenzy has seen it rapidly catch up. The country’s pet market is predicted to be worth ¥811 billion ($112.5 billion) in 2025, according to an iiMedia Research pet industry report, having been growing at three times the rate of its international peers. China’s pet industry was worth just ¥221.2 billion in 2019.

More than two-thirds of pets are owned by those living in Tier-2 cities, while Tier-1, and Tier-3 and below, make up just under a third each. While statistics on the number of pets vary significantly, there does appear to be a consensus that more cats are now being kept as pets compared to dogs. According to a 2023 UBS report, this shift in preference, with the scale tipping in favor of cats around 2021, reflects the limited time, living space and financial requirements for keeping a cat in comparison to a dog.

According to industry data provider Petdata, young people aged between 23 and 33 made up almost half of China’s pet owners in 2023, and a recent Goldman Sachs report suggested that China’s urban pet population surpassed the number of children under four in 2024. That same report predicted that, by 2030, the urban pet population could hit more than 70 million, while the number of children under the age of four could drop to fewer than 40 million.

Why this growth?

The rapid growth of China’s pet industry is rooted in the cultural and demographic shifts taking place in the country. The fast pace and long hours of Chinese work culture, alongside growing financial pressures amid a moribund and uncertain economy, have played a role in the rising number of single young men and women in cities, and an increase in urban loneliness. China’s marriage rates were just 7.68 million in 2023, down from a peak of 13.46 million in 2013.

Pet owners are also getting younger. According to the iiMedia report, as of December 2024, around 41% of pet owners were born between 1990 and 1999, and the share of pet owners born after 2000 increased from 10.1% in 2023 to 25.6% in 2024.

“I think more people in China have pets because of urban loneliness and the need for emotional connection,” says Yang Tang, a 27-year-old data analyst in Shanghai, who has had his cat Milky since November. “As people get busier, pets become a source of comfort and the younger generation is more open to treating pets as family.”

According to Asia Pet Alliance (APA), nearly 90% of Chinese pet-owning households regarded pets as important family members, and while this treatment is not new, it is more prominent now given a declining birth rate.

“People are postponing marriage, and also replacing children with pets given the high cost of raising a child,” says Park. “Pet owners are spending more on pets given the general increase in living standards and income, but it is obviously comparatively a lot lower.”

The COVID-19 pandemic was a catalyst for growth in the pet industry. A UBS survey of more than 1,500 Chinese pet owners found that nearly 80% of respondents maintained or increased their pet-related consumption after the pandemic.

“It made people value emotional bonds more, especially when they were isolated,” says Tang. “Many started to see pets not just as animals but as companions. The idea of home became more important and the idea of pets became part of emotional security.”

Special treatment

As more young Chinese choose pets over parenthood, pet-related spending has surged. Urban Chinese pet owners spent over ¥300 billion ($41 billion) on their cats and dogs in 2024, a 7.5% annual increase and an average annual spend per owner of ¥6,000, larger than the entirety of China’s health supplement market in 2023, according to Petdata. The ¥6,000 figure is around the same as per pet spending in Japan.

A McKinsey report found that net spending intent—the percentage of consumers expecting to increase spending minus those that expect to reduce—for the pet market in 2025 is 12%, the same as for travel and higher than personal care products (10%).

An increasing demand for quality pet food accounts for the bulk of pet-related spending. A joint report by MobTech and KuRunData showed that in 2024, the dog food market grew by 4.6% year-on-year, while the feline market expanded more rapidly at 10.7%, and this has proven to be an opportunity for local players to jump in. All five of the top pet food brands during Tmall’s 2024 ‘Double 11’ shopping holiday were domestic.

“Food used to be bought from foreign brands due to their reputation for quality, but there has been an increase in local brands that have their own factories and more control over production,” says Park. “Their perceived quality is improving and they will certainly catch up further.”

Digitalization and intelligent upgrading have also grown in popularity, and the presence of technology giants such as Xiaomi and Midea in the smart pet products sector is pushing new growth. Smart pet deodorizers, feeders and litter boxes are just a few examples of products that saw two- or three-fold increases in year-on-year sales on Tmall during the ‘618’ online shopping festival in 2024.

But China’s booming pet industry has also evolved far beyond the basics, with a wide array of specialty services catering to pampered pets. In urban centers like Shanghai, Beijing and Chengdu, pet owners can find everything from luxury pet hotels offering air-conditioned suites and personalized butler services, to yoga classes and high-end spas that provide aromatherapy, hydrotherapy and even acupuncture rooted in Traditional Chinese Medicine.

“From our interactions with customers we’ve noticed that they are more concerned about their pets’ health than ever before,” says Marco Wang, creative director of Shanghai-based pet grooming company LuLu House. “In the past, pet owners mostly focused on pet food, but now they care about their pets’ skin and coat, bodily organs and even mental health. This presents new challenges for professionals, requiring us to continuously learn specialized knowledge to assist customers.”

Pet fashion and custom apparel has also taken off, with boutique brands designing seasonal wardrobes and hosting pet fashion shows, while cafes and artisanal bakeries serve up treats for both pets and their owners. Luxury brands such as Prada, Tiffany and Louis Vuitton offer pet products ranging from collars to travel carriers.

Advanced veterinary services, including diagnostic imaging and dental care, are increasingly common, as are pet training programs and behavioral therapy tailored to modern urban life. The trend extends to end-of-life care as well, with cremation, burial and memorial services available for grieving pet owners.

“The Chinese pet market is fiercely competitive and has been rapidly maturing in recent years,” says Richard Wu, co-founder of Advanced Vet Care (AVC), a Shanghai-based animal health and veterinary center. “We previously tailored our offerings as a boutique premium service targeting the top of the pyramid, but we found that following the exodus of expats during the 2022 lockdowns that we had to adapt. Our services expanded to include things like oncology screenings and treatments, and our client base got bigger.”

Pet industry issues

The growth of China’s pet market has far outstripped many other consumer sectors over the past few years, but the industry is not immune to difficulties.

There are ethical concerns related to unregulated breeding and low levels of adoption compared to purchases, as well as dubious practices such as “pet blind boxes”—where sellers ship random animals, often non-pedigree or sick, under the guise of a low-cost lottery for desirable breeds. Reports of such offers have subsided in the past few years, after a string of government crackdowns on a number of different operations in 2021, but concerns are still voiced by animal rights activists.

Pet daycare services are relatively new, unregulated and often poorly managed, and in the pet healthcare sector, China lacks standardized diagnosis and treatment processes, sometimes resulting in excessive or unnecessary treatments. There is also a mismatch between the number of experienced veterinarians and the rapidly growing number of pets.

“While the government has taken some steps to improve regulation in the pet industry, gaps remain,” says Park.

Outside investment into the pet industry has also fallen dramatically in the last few years, dropping to ¥2.35 billion ($330 million) in mid-September 2024, down from a peak of ¥10.69 billion in 2021. Funding is shifting towards technology, rather than retail and that has left startups, including many that are currently profitable, struggling to secure funding.

Looking ahead

Despite the financial, regulatory and ethical hurdles facing China’s pet industry, there is clearly potential for future growth, particularly if current downward demographic trends continue. And given China’s pet owners’ clear penchant for flair and indulgence in styling and looking after their pets, there are opportunities beyond traditional pet products.

“Pets are redefining public spaces, often being brought along to social occasions,” says Park. “And this is going to lead to growth for traditionally non-pet industries such as beauty, fashion, furniture and entertainment.”

The market is still expanding but major players are now going to start consolidating more, and newer businesses are going to face more difficulties in entering the market.

“As more competition enters the industry, I expect further market fragmentation leading to overall lower profitability for industry participants,” says Wu. “So, the pie will get bigger but will be divided by a much more rapid expansion in supply.”