Core Insights - The recent closure of all physical stores by Pet Fresh, a pet fresh food brand founded by former Hema founder Hou Yi, has raised questions about the viability of the pet fresh food market [1][2] - Pet Fresh aimed to create a new retail model similar to Hema but faced significant operational challenges leading to its decision to focus solely on online sales [1][3] Company Overview - Pet Fresh offered a variety of products including fresh pet food, refrigerated food, and over 300 types of snacks, utilizing an integrated online and offline retail model [2] - The company initially opened its first store in Shanghai in February and completed a $25 million angel round of financing in May, aiming to expand to 100 stores by the end of the year [1][2] Market Challenges - The closure of Pet Fresh's stores is attributed to high operational costs, including rent and labor, as well as the need for specialized kitchen equipment and cold chain logistics [2][3] - The pet fresh food market has a lower purchase frequency compared to traditional grocery shopping, making it difficult for physical stores to maintain consistent customer traffic [3][4] Competitive Landscape - Other players in the pet fresh food market, such as "Duke is Here," have also faced challenges but have managed to survive by building a loyal customer base and integrating online sales [4][5] - New entrants like "Pure Paw Pet Bakery" are attempting to navigate the market by focusing on high-quality ingredients and local customer bases [5][6] Cost Structure - The operational costs for pet fresh food businesses are high, with significant expenses related to rent, utilities, and quality ingredients, making profitability challenging [6][8] - The price sensitivity of consumers often leads them to choose cheaper options like traditional pet food, limiting the market for premium fresh food products [9][10] Regulatory Environment - There is currently no unified safety standard for pet fresh food in China, leading to consumer concerns about product quality and safety [11][12] - Existing regulations primarily cover pet feed but do not extend to fresh food, creating a regulatory gap that could impact market growth and consumer trust [12][13] Future Outlook - The pet economy in China is projected to reach a market size of 1.15 trillion yuan by 2028, indicating potential growth opportunities despite current challenges [14] - Experts suggest the need for a multi-tiered standard system to ensure product safety and quality in the pet fresh food sector [15][16]