Source: CHEAA-run China Appliance magazine
With Xiaomi rolling out its pet water dispenser on March 18 2020, an unleashed market centering on pets surfaced. Will the growing pet economy inject fresh vitality to home appliance industry? And how will the industry take it?
A 300bn RMB market
Pet economy has long been regarded as a blue ocean market. In recent years, more and more families start to keep pets. Statistics from White Paper on China’s Pet Industry 2019 show that, the number of people keeping pets (cat or dog) came to 61.2 million in urban areas in 2019, up by 4.72 million year-on-year, and families with pets accounted for 23% in urban areas in 2019, up by 4% year-on-year.
Compared to the traditional way of pet keeping, young people regard pets as family members and are willing to spend big for them. Statistics show that, the average expense on one pet rose by 10.9% year-on-year in 2019. Apart from food, pet articles for daily use, pet medical devices and pet grooming products are also gaining popularity. It is learned that, sales value of pet supplies have surged by three times in only 30 minutes after the June 18 shopping festival of 2019 kicked in.
This potential market also catches the eyes of investors. It is learned that there were 50 pet-related financing events from June 2018-June 2019.
Plus, as online pet stores, cat-themed coffee shops, cat-themed streets, pet-themed park, pet-themed cultural products and pet-themed restaurants spring up, a further rise of pet economy is expected.
The growing number of pets generates a large demand for pet-related business from cleaning, medical care to daily use, fueling the pet economy to further flourish. The number of pets in urban areas came to 99.15 million at a penetration rate of 21.32% according to White Paper on China’s Pet Industry 2019, indicating large untapped market.
China’s pet owners are willing to spend big. It is learned that the annual expense on one pet came to 5,561RMB by average in 2019, up by 545RMB year-on-year.
Reflecting the growing demand, pet appliances come into the sight of the masses. From 2018-2019, smart pet appliances accounted for 10% of pet supplies by sales, of which 40% were smart monitoring devices, according to CBN Data.
I searched “pet appliance” on leading online platforms, finding pet hair dryers and food dehydrators were the most sold. These products are nothing short of expensive. Most pet hair dryers on Tmall are charged at around 1,000RMB. In fact, even those priced at a whopping 6,000-7,000RMB also posted good sales record.
It’s worth noting that more pet appliances are rolling out, including pet beds with temperature control function, smart pet training devices, full automatic pet toilets, pet rooms with air conditioner, pet hair shavers, electric scratchers, etc.
Accommodating to this trend, home appliance players start to make deployment in this niche. Apart from Xiaomi, more players including Lexy, Bear, Yadu and Yixiang have dipped their toes into it.
Speaking of considerations behind Yixiang’s deployment in pet appliances, Zhang Liang, CEO of Yixiang, points out that, currently air purifier for ammonia removing is in its infancy with small demand, but more demand will come when the number of households with pets grows. And that’s why the company decides to cultivate the market.
Market regulation in need
To make the pie bigger, product quality is important. But equally important, is market regulation.
Zhang Liang believes that, slow but steady development is actually good for the emerging industry as it allows consumers to be more exposed to pet appliances, such as air purifiers for pet smell, while allows the market time to be well-regulated. “If the industry grows too fast, fake and substandard products would flood in. This would hurt consumers’ experience, putting the industry into a hard situation.”
Another interviewee who refused to be named points out that, the industry needs to make efforts in brand-building, R&D, industry chain establishment and channel building to make the pie bigger. Plus, it has to further dig into consumer needs, develop products for niche markets and well operate channels to expand market and advance the industry development.