Core Viewpoint - Zhejiang Province is soliciting public opinions on the draft "Opinions on Promoting the Development of the Pet Economy," aiming to foster the integration of the pet economy with various emerging industries [1] Group 1: Industry Integration - The initiative emphasizes the cross-industry integration of the pet economy with sectors such as the silver economy, cultural tourism, self-care economy, and exhibition economy to cultivate new consumption hotspots [1] - The plan includes the development of pet-friendly tourism pilot projects to meet the reasonable demand for "human-pet travel" [1] Group 2: Cross-Industry Innovation - The proposal encourages the pet economy to connect with traditional manufacturing and service industries, guiding willing companies in logistics, fast-moving consumer goods, home appliances, and textiles to engage in cross-industry innovation [1] - New fields are identified for expansion, including pet transportation, fashionable pet clothing, pet health food, and smart pet products [1]

记者 吴卫群 昨天，上海产业转型发展研究院发布了2025上海宠物消费分布指数报告。 据介绍，该报告涵盖上海16种常规的宠物消费线下经营业态，包括宠物店、宠物医院、宠物殡葬、 宠物用品专卖店、宠物主题乐园（公园）、宠物药房、宠物托运、宠物服饰、宠物摄影等。 报告显示，上海人口总量前三名的浦东新区、闵行区和宝山区，宠物消费线下经营业态的数量同样 居前三位。而宠物线下消费业态分布，呈现由中心城区向外逐步递减态势，中心城区宠物线下消费业态 数量占全市总量的32.4%。宝山区大场镇常住人口达40多万，是宠物消费线下经营业态数量最多的镇。 调查发现，宠物店"人均消费"的平均值为431元，宠物医院的平均值为384元，宠物摄影的平均值为 782元，宠物殡葬的平均值为816元。 ...

Summary of Conference Call on Pet Economy Industry Overview - The pet economy in China has reached nearly 1 trillion RMB, indicating a large market size but low market concentration, with leading companies like Guobao Pet generating only over 5 billion RMB in revenue, significantly lower than international giants like Mars and Nestlé, suggesting substantial growth potential in the Chinese market [1][2] - The global pet market is valued at approximately 200 billion USD, with pet food accounting for 130 billion USD, highlighting the lucrative nature of the industry [2] Key Trends and Characteristics - The pet economy exhibits long-term growth characteristics, with the compound annual growth rate (CAGR) in the US and Japan exceeding GDP growth over the past 20 years, indicating resilience during economic fluctuations [1][2] - The Chinese pet market is characterized by three major trends: - **Cat Economy**: The number of cats has surpassed dogs since 2021, with cats showing a higher demand for premium food due to their sensitive digestive systems [4] - **Online Sales**: Online sales account for 68% of pet food sales, benefiting from the rise of interest e-commerce platforms like Douyin [4] - **Premiumization**: The trend towards high-end products is evident, with leading companies like Guobao achieving a net profit margin of 12% and a return on equity (ROE) expected to rise further [4][5] Market Dynamics - The pet food market has seen a slowdown in growth, with a CAGR of 25% from 2016 to 2021, dropping to around 6% in recent years, but is projected to stabilize at 10% over the next five years [7] - The pet medical market is still in a high-growth phase, with a market size nearing 100 billion RMB, but profitability is still developing [7][15] - The penetration rate of professional pet food in China is about 30%, significantly lower than the 80%-90% seen in mature overseas markets, indicating a major growth driver as consumers shift from leftovers to specialized pet food [8][9] Competitive Landscape - The competitive landscape in China is less concentrated compared to the US, where the top five companies hold 65% of the market share, while in China, it is only 25% [5][10] - Domestic brands are rising due to improvements in product quality, channel strategies, and brand strength, with companies like Guobao leveraging e-commerce and brand upgrades to capture market share [11][14] Investment Opportunities - The current phase of the pet economy in China is described as a "golden era," characterized by resilient growth and market optimization, presenting significant investment opportunities for leading companies [5][16] - Investors are encouraged to focus on leading and emerging companies within the sector, taking advantage of cyclical opportunities in this thriving market [16] Additional Insights - The rise of domestic brands is attributed to their ability to cater to local needs and preferences, with successful examples in both the pet food and medical sectors [14][15] - The pet medical sector is evolving, with increasing demand for comprehensive care as pets age, necessitating improvements in veterinary training and supply chain management [15]

Investment Rating - The report assigns an "Outperform" rating to multiple companies in the discretionary sector, including Nike, Midea Group, JD Group, Haier Smart Home, Anta Sports, Gree Electric, and others [1]. Core Insights - The report emphasizes the focus on consumer sub-sectors with favorable risk/reward ratios, highlighting bottom opportunities in the market [1][4]. - The performance of various consumer sectors is analyzed, with gold and jewelry, overseas cosmetics, and domestic cosmetics showing positive growth, while luxury goods and overseas sportswear sectors experienced declines [4][12]. Sector Performance Review - Weekly performance rankings indicate that the gold and jewelry sector led with a 4.0% increase, followed by overseas cosmetics at 1.7% and domestic cosmetics at 1.4%. In contrast, overseas sportswear saw a significant decline of 4.2% [4][12]. - Monthly performance shows overseas cosmetics leading with an 8.8% increase, while overseas sportswear experienced a decline of 2.9% [12]. - Year-to-date performance highlights gold and jewelry with a remarkable 175.3% increase, while overseas sportswear faced a decline of 12.0% [12][13]. Sector Valuation Analysis - Most sectors are valued below their average over the past five years, with the overseas sportswear sector expected PE at 34.3 times, which is 61% of its historical average. The domestic sportswear sector is expected to have a PE of 14.1 times, 80% of its historical average [9][18]. - The gold and jewelry sector's expected PE is 27.1 times, 48% of its historical average, while the luxury goods sector is expected at 24.3 times, 44% of its historical average [9][18]. - The report indicates that all sectors' expected PE for 2025 is lower than their historical averages, with only the household goods sector's EV/EBITDA exceeding its historical average [18].

Market Overview - The pet consumption market in China is projected to exceed 300 billion yuan by 2024, reaching 300.2 billion yuan with a year-on-year growth of 7.5% [1][14] - The dog consumption market is expected to reach 155.7 billion yuan, growing by 4.6%, while the cat consumption market is anticipated to reach 144.5 billion yuan, with a significant growth rate of 10.7% [1][15] Pet Population - The total number of pet dogs and cats in urban areas is expected to rise to 124.11 million by 2024, marking a 2.1% increase from 2023 [2][17] - The number of pet dogs is projected to be 52.58 million, growing by 1.6%, while pet cats will reach 71.53 million, increasing by 2.5% [2][17] - Pet cats now account for 57.63% of the total pet population, indicating a growing preference for cats among households [2][19] Market Penetration - The penetration rate of pet ownership in China is still low compared to developed countries, with an estimated dog ownership rate of 17.8% in 2023, expected to rise to 19.4% by 2026 [2][18] - This suggests significant potential for growth in the Chinese pet market as pet ownership becomes more widespread [2][18] Consumption Structure - The overall consumption structure in the pet market remains stable, with slight fluctuations in specific segments. Categories such as pet staple food, nutritional products, pet boarding, and pet insurance are seeing a small increase, while pet snacks, supplies, medical services, vaccines, and grooming are experiencing slight declines [2][23] - Pet staple food continues to dominate the market, reflecting the importance of core consumption categories [2][23] Consumer Demographics - Female pet owners constitute 60.5% of the pet-owning population, while males account for 39.5% [3] - The primary pet-owning demographic is the post-90s generation, making up over 60%, indicating a higher emotional investment in pets among younger consumers [3] - Pet owners generally have higher education levels, with 67.8% holding a bachelor's degree or higher, and they tend to have strong purchasing power [3] Regional Distribution - Pet ownership is most prevalent in third-tier cities, which account for over 30% of pet owners, while first and second-tier cities have similar ownership rates [4] - Major cities like Beijing, Hebei, and Shanghai are the top regions for pet ownership, driven by economic development and widespread pet care services [4] Consumer Preferences - The average monthly expenditure per pet has shifted towards more rational spending, with a decrease in high spenders (over 500 yuan) and an increase in mid-range spenders (100-500 yuan) [5] - Pet food remains the most significant expense, accounting for 44.7% of total spending, followed by pet medical care at 20.7% [5] Online and Offline Channels - Online shopping is preferred for pet food, snacks, and deworming products, with 83.9%, 73.6%, and 53.7% of pet owners purchasing these items online, respectively [5] - Conversely, offline channels dominate for services requiring personal interaction, such as pet medical care and grooming, where over 40% of purchases occur in physical stores [5] Trends in Pet Products - The preference for domestic pet food has surged, with 57.7% of pet owners choosing local brands in 2024, a significant increase from previous years [6] - Functional pet food and health products are gaining traction, with probiotics, vitamins, and calcium supplements being the most popular categories [6] Future Outlook - The pet consumption market is expected to evolve with a focus on functional, intelligent, and personalized products, driven by the increasing awareness of pet health and well-being [8] - The market for pet services is also anticipated to grow, with online consultations and niche services like pet photography gaining popularity [9]

Group 1 - The pet industry in China is increasingly mirroring human healthcare systems, with advanced veterinary services resembling those found in human hospitals [3][30][48] - The China Agricultural University Animal Hospital is recognized for its high level of care, offering a range of services including CT scans, acupuncture, and specialized treatments for various animals [21][24][30] - The growing trend of pet ownership is leading to a significant expansion in the pet services market, with projections indicating that the market size will exceed 300 billion yuan by 2024 [44][45] Group 2 - The emergence of specialized pet services, such as pet fitness centers and pet funerals, reflects a shift towards treating pets with the same care and attention as humans [33][42][48] - The pet industry is experiencing rapid growth, with the number of pet cats and dogs in China expected to surpass 124 million by 2024, indicating a strong market potential [44][45] - The emotional value derived from pet ownership is becoming increasingly recognized, with pet owners finding fulfillment and companionship through their relationships with their pets [58][60]

Core Viewpoint - The pet industry in China is increasingly mirroring human services, with a focus on specialized veterinary care, fitness, education, and even funeral services for pets, reflecting a growing market driven by pet ownership and emotional connections between pets and their owners [4][56][78]. Group 1: Veterinary Services - The Chinese Agricultural University Animal Hospital has adopted a professional approach similar to human hospitals, featuring processes like registration, payment, and detailed medical examinations [10][12][28]. - The hospital offers advanced medical services, including CT scans and acupuncture, showcasing a high level of veterinary care that parallels human healthcare standards [32][41][52]. - The hospital's success has led to its recognition as a top-tier facility, with the Chinese Veterinary Association rating it as a five-star institution [53][55]. Group 2: Pet Fitness and Wellness - The emergence of pet gyms in cities like Shanghai indicates a trend where pet fitness services are designed to mirror high-end human fitness centers, offering facilities for exercise and rehabilitation [57][60][63]. - Pet owners are increasingly investing in their pets' health and fitness, recognizing the importance of maintaining a healthy lifestyle for their pets to reduce disease risks [65][66]. Group 3: Pet Education and Communication - The pet education sector is evolving, with structured programs that include various activities and even graduation certificates, reflecting a competitive environment similar to human education systems [71][72]. - Services that claim to facilitate communication between pets and owners have gained popularity, indicating a market for emotional connection and understanding [68][69]. Group 4: Pet Funeral Services - The pet funeral industry has developed comprehensive services, including cremation and memorial options, with pricing based on pet weight, showcasing a growing market for end-of-life care [73][76]. - The emotional investment in pets extends to their afterlife, with services that cater to owners' desires for respectful farewells [75][76]. Group 5: Market Growth and Potential - The pet population in China is projected to exceed 124 million by 2024, contributing to a market size that is expected to surpass 300 billion yuan (approximately 42.5 billion USD) by 2024 and 400 billion yuan (approximately 56.5 billion USD) by 2027 [78][82]. - The current pet market penetration in China is significantly lower than in mature markets, indicating substantial growth potential [84][86]. Group 6: Emotional Value and Human Connection - The relationship between pets and their owners is characterized by mutual emotional support, with pet ownership providing significant emotional value to individuals [99][101]. - Many young pet owners view caring for pets as a way to address personal emotional needs, reflecting a deeper psychological connection [112][114].

Core Viewpoint - The pet industry in China is increasingly mirroring human services, with a growing focus on professional veterinary care and specialized services for pets, reflecting a significant market opportunity and consumer demand [6][76]. Group 1: Veterinary Services - The China Agricultural University Animal Hospital has adopted a hospital-like process for pet treatment, including registration, payment, and detailed medical examinations [10][40]. - The hospital offers advanced medical services such as CT scans and acupuncture, showcasing a high level of professionalism in pet healthcare [28][36]. - The increasing complexity of pet medical care is evident, with detailed medical reports that require significant understanding to interpret [25][27]. Group 2: Pet Fitness and Wellness - The emergence of pet fitness centers in China reflects a trend where pet care services are designed to parallel human health and wellness facilities, including services like pet yoga and rehabilitation [53][56]. - Maintaining a healthy weight and fitness for pets is seen as essential for reducing health risks and extending their lifespan, similar to human health trends [59][60]. Group 3: Pet Education and Communication - The pet education sector is evolving, with structured programs that resemble human educational systems, including courses and certifications for pets [66][68]. - Innovative communication methods between pets and owners, such as "pet communication" techniques, have gained popularity, indicating a growing market for pet-related services [62][63]. Group 4: Pet Funeral Services - The pet funeral industry has developed comprehensive services, including cremation and memorial options, with prices reaching up to 2000 yuan for various packages [70][72]. - The emotional value associated with pet loss is being monetized, with services designed to cater to grieving pet owners [71][73]. Group 5: Market Growth and Potential - As of 2017, China ranked second globally in pet cat and dog population, with projections indicating that the number will exceed 124 million by 2024 [77]. - The market size for urban pet services is expected to surpass 300 billion yuan by 2024, with potential growth to over 400 billion yuan by 2027, highlighting a significant opportunity for investment [78][79]. - The current pet market penetration in China is approximately three times lower than that of mature markets like the U.S., suggesting substantial room for growth [79][80].

Core Viewpoint - The podcast "基会来了" discusses the future of new consumption in China, questioning whether it is a fleeting trend or a sustainable growth opportunity [4]. Group 1: New Consumption Trends - New consumption companies often start with high valuations due to uncertainty about their growth potential, but they may face significant price declines if they fail to establish a solid market presence [5]. - A systematic understanding of the industry’s business model is crucial, particularly the presence of scale effects, as industries without them tend to become increasingly fragmented [5]. - The long-term success of consumer goods relies heavily on brand strength, with high gross margins indicating strong pricing power [5]. Group 2: Understanding Consumer Behavior - The 80s generation fund managers can still effectively study the consumption patterns of younger generations by recognizing industry trends and conducting thorough research [7]. - Observing new trends and being open to understanding them is essential for investment research, even if the researcher is not part of the target consumer group [7]. - Engaging with industry leaders and analyzing market data can provide valuable insights into consumer preferences and market dynamics [9]. Group 3: Consumption Dynamics - Current consumer behavior reflects a generational shift, with younger consumers displaying confidence in their purchasing decisions, prioritizing product quality and value over brand prestige [10]. - Economic growth in consumption is fundamentally linked to rising household incomes, making income growth a prerequisite for sustained consumption growth [10]. Group 4: Competitive Advantage in Global Markets - Chinese consumer brands have shown significant competitive advantages in international markets, particularly in gaming, where they have adapted products to local cultures and achieved substantial success [13]. - The success of Chinese products abroad challenges the notion that cultural differences would hinder market acceptance, as many products have thrived in Western markets [16]. Group 5: Promising Consumption Segments - Key areas for future investment include international expansion of companies, modern consumer categories like self-care products, gaming, and the pet economy, as well as the technology and AI sectors [18].

Core Viewpoint - The pet industry in China is increasingly mirroring human services, with a growing emphasis on professional veterinary care and various pet-related services that reflect human lifestyles and needs [5][50]. Group 1: Veterinary Services - The Chinese Agricultural University Animal Hospital has adopted a hospital-like process for pet treatment, including registration, payment, and detailed medical examinations, similar to human hospitals [7][8][25]. - Advanced medical services for pets, such as CT scans and acupuncture, are now available, showcasing a high level of professionalism in veterinary care [28][36][39]. - The hospital's success has led to its recognition as the "Peking Union Medical College Hospital" of the animal world, indicating a high standard of care [45]. Group 2: Pet Fitness and Wellness - The emergence of pet fitness centers in China reflects a trend where pet care services are designed to parallel human health and fitness facilities, including services like pet yoga and rehabilitation [51][53]. - Pet owners are increasingly investing in their pets' health to reduce disease risks and extend their lifespans, mirroring human health concerns [55]. Group 3: Pet Education and Communication - The pet education sector is evolving, with structured programs that include training and care, similar to human educational systems, complete with graduation certificates [60][61]. - Innovative communication methods between pets and owners, such as "pet communication" techniques, have gained popularity, indicating a growing market for pet-related services [58][59]. Group 4: Pet Funeral Services - The pet funeral industry has developed comprehensive services, including cremation and memorial options, with prices reaching up to 2000 yuan for various packages based on pet weight [66][67]. - This sector reflects the emotional investment pet owners have in their pets, further indicating the industry's growth potential [63]. Group 5: Market Growth and Potential - As of 2017, China ranked second globally in pet cat and dog population, with projections indicating that by 2024, the number will exceed 124 million [71]. - The market size for urban pet services is expected to surpass 300 billion yuan by 2024, with further growth anticipated, highlighting the industry's vast potential [72][73]. - The current pet service penetration in China is significantly lower than in mature markets, suggesting substantial room for growth [73][74].