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People are replacing children with pets. Why are pets so popular

Compared with Europe and the US, the Chinese market is still far from mature. According to Guosheng Securities research report, in 2021, the US pet market reached 123.6 billion US dollars, ranking first in the world with a 40.2% share, and far ahead of other countries. Although the growth rate of the Chinese market is much higher than that of mature markets represented by the United States from the compound growth rate, the absolute size of the pet market is still far lower than that of the United States.

In the field of pet food, which has the highest market segment, under the new marketing model such as e-commerce promotion and network red belt goods, young people no longer only understand international brands, and some small domestic brands also have opportunities. Lin Degui said that at present, there are many brands of various pet food, but after a stage of noise, how far can go depends on the core competitiveness of pet nutrition research and development and quality of products.

In the field of pet economy, the phenomenon of OEM is widespread. As the "processing workshop" of international brands, OEM enterprises do not master product research and development design and sales channels, and their profit margins are low. For example, the recently listed cat climbing rack, pet litter mat manufacturer Tianyuan Pets, its main revenue from overseas customers OEM production, customers in the Americas, Europe, Australia and Japan and other countries large chain. The main pet leash Yuanfei pet was listed on August 18 this year, and its overseas sales revenue accounted for more than 95%. China Pet, one of the leading domestic pet snacks enterprises, accounted for 75.88% of the export revenue in the first half of 2022, with sales mainly coming from branded products and smaller sales of independent brands.

Guosheng Securities pointed out in an industry report released on November 9 this year that the penetration rate of pet raising families in China is currently expected to be no more than 20%, and there is still broad room for improvement compared with mature markets. On the other hand, the competitive pattern of China's pet industry is relatively dispersed, overseas giants have the first-mover advantage, domestic brands have developed rapidly in recent years, and important market segments such as food and animal protection have risen, and the future domestic alternative space is broad.