Group 1 - The core viewpoint of the article highlights the financial performance of Yiyi Hygiene Products Co., Ltd. for the first three quarters of 2025, showing a slight decline in revenue but an increase in net profit [1] - Yiyi plans to acquire 100% equity of Hangzhou Gaoye Family Pet Food Co., Ltd. through a combination of issuing shares and cash payment, indicating a strategic move to expand its presence in the pet industry [1] - The company has a history of collaboration with Gaoye, having made a strategic investment in 2021, which lays a solid foundation for this acquisition [1] Group 2 - The pet industry in China is identified as the largest existing market globally, with significant growth potential, maintaining a high compound growth rate over the past three years [2] - The domestic pet food market is entering a new phase of upgrade and development, driven by functional and segmented upgrades, with many brands focusing on product innovation [2] - Companies are increasingly adopting creative marketing strategies to enhance consumer experiences, which aligns with industry trends and the need for differentiation in a competitive market [2] Group 3 - Yiyi is actively pursuing strategic upgrades in response to industry trends, having built a comprehensive product system for pet hygiene care over more than 20 years [2] - Recent policy changes, such as the adjustment of tax-free shopping policies for pet products, indicate growing governmental support for the pet industry [2] - The company is exploring various strategies to leverage the new policy, including partnerships with duty-free shops and enhancing market promotion efforts [3]

Market Overview - The pet industry in China is experiencing significant growth, with the market size projected to increase from 102.2 billion yuan in 2016 to 309.6 billion yuan by 2024, reflecting a compound annual growth rate (CAGR) of 21.6% from 2016 to 2020 and a projected CAGR of 7.6% from 2020 to 2025 [1][2] - The post-pandemic era has led to a stable growth trajectory for the pet market, with the number of pet cats and dogs returning to low single-digit growth rates [1][2] Segment Analysis - The pet cat market is growing faster than the dog market, with a projected market size of 300.2 billion yuan for both cats and dogs in 2024, and a CAGR of 9.9% from 2018 to 2024. The CAGR for pet cats is 14.3%, while for dogs it is 6.7% [2][3] - Pet food remains the core expenditure, accounting for 52.8% of overall spending on pets in 2024, with staple food having a penetration rate exceeding 95% [3][4] Consumer Trends - There is a noticeable shift in consumer preferences towards domestic brands, with an increase in acceptance of local pet food brands. The proportion of dog owners choosing domestic brands rose from 27.1% in 2023 to 32.9% in 2024, while cat owners' preference increased from 28.3% to 34.8% [6][7] - The demand for pet hygiene, care, and smart pet products is rapidly increasing, with the retail compound growth rate for pet grooming products projected at 10.9% from 2023 to 2025 [5][6] Export Market - The Southeast Asian pet market is experiencing explosive growth, with a pet ownership rate of 50%. Indonesia and Thailand are key markets, with pet industry sizes of approximately 3 billion and 2.29 billion USD, respectively [9] - China's pet food exports are on the rise, with export volumes expected to grow from 26.9 thousand tons in 2022 to 33.5 thousand tons in 2024, and export values increasing from 8.26 billion yuan to 10.53 billion yuan during the same period [9][10] Industry Players - Leading companies in the pet food sector include Guobao, Zhongchong, and others, with Guobao expected to surpass Mars in market share. The market is seeing a trend towards rational decision-making among consumers, favoring domestic brands [6][8] - Various companies are innovating in the pet care space, including those focusing on smart pet products and health care, such as Yiyuan, Yuanfei, and others [10][11]