Hong Kong Leads The Way In Asian Pet Care

FEATURED ARTICLE

Valued at $USD 27.1 billion in 2021, Asia Pacific is one of the most dynamic regions in pet care recording an 11.8% CAGR over the review period (2016-2021). This performance is primarily due to the significant growth in the region’s cat and dog population. Asia Pacific already stands out as the largest market for cats and dogs.

Cats in particular are gaining popularity due to rapid urbanisation and relatively smaller living spaces in places like China. Cats require less space and are also relatively independent, making them a great fit for a busy single- or dual-income household. This has also led to a rapid expansion in cat food demand, which grew from a 22% to a 32% share of total pet food sales over the review period.

It is also worth noting that in addition to developing countries, growth in developed countries is also on the rise. While slower than developing countries such as China and Indonesia, which posted high double-digit CAGRs over the review period, all developed countries in Asia Pacific, with the exception of Japan but including Hong Kong and South Korea, are recorded low double-digit or high single-digit average growth rates. This has contributed to the overall growth of the Asian pet care market.

Ultra-premium Hong Kong pet market driven by extremely sophisticated consumers

Hong Kong recorded the highest per capita spend. Markets in the region with similar dynamics and attitudes towards pets, such as Taiwan and Singapore trailed by comparison.

Currently, Hong Kong and Singapore have a similar number of pets per household of around 0.5, but Hong Kong is witnessing a significantly higher per capita spend, at almost six times that of Singapore. The share of premium cat and dog food is close to 75%, whereas only 55-60% for Singapore.

Neighbouring countries such as Japan and Taiwan, meanwhile, have a higher number of pets per household compared to Hong Kong at around one per household, yet their per capita spend is approximately half that of Hong Kong’s.

Analysing the types of pets owned by household, Hong Kong, Japan and Taiwan have similar cat and dog populations to household ratio, whereas Singapore is significantly lower. Singapore lags behind in terms of cat and dog ownership per household, with a higher share of other pet types which require lower maintenance, such as fish and small mammals, explaining the large gap in per capita spending compared to the top three markets.

With similar attitudes towards pets, pet ownership and types of pets owned between Hong Kong, Japan and Taiwan, the reason behind the difference in per capita spending is the gap in median household income. Japan and Taiwan have very similar median household incomes, while Hong Kong’s median household income is 50% higher, enabling local consumers to spend more on each pet compared to other markets.

Other than day-to-day pet care involving food and hygiene, consumers in Hong Kong are keen to improve the overall life experience of their pets. This is evident in the rising popularity of premium experiences and services such as luxury pet staycations at Mandarin Oriental, Ritz-Carlton and Rosewood in the city. Pet care in Hong Kong is now moving towards an ultra-premium positioning compared to other markets in Asia Pacific.

Furthermore, pet owners in Hong Kong are not willing to sacrifice the quality of pet food and healthcare products they purchase, even during tough economic times. They have more money to spend on their pets as travelling overseas has not been easy before and after the pandemic, explaining the resilience of the pet care market in Hong Kong in 2022, which showed double-digit growth. Enhanced awareness of health and wellness allows pet parents to project what they regard as beneficial to themselves onto their pets as well, resulting in strong growth for pet healthcare in 2022, especially in the supplements space.

Increased attention to preventive healthcare for pets post-pandemic in Hong Kong

Almost 80% of Hong Kong respondents give supplements to their pets at least once per month, according to Euromonitor International’s Voice of the Consumer: Lifestyle Survey in 2022. Pet owners started buying supplements for their pets as part of their diets to improve their health and wellbeing and to enhance their longevity and immunity. In response to the local appetite for pet supplements, an increasing number of supplement players are now entering the market, including PAW by Blackmores and Petural by Watson’s Petmacy.

This Featured Article has been produced by Euromonitor. Rize ETF Ltd make no representations or warranties of any kind, express or implied, about the completeness, accuracy, reliability or suitability of the information contained in this article.

Related ETF

PETZ: Rize Pet Care UCITS ETF

Reference

Nozomi Hariya and Prudence Lai., “Unmet Pet Care Potential In Asia: Hong Kong Shows The Way”, October 2022. Available at: https://www.euromonitor.com/article/unmet-pet-care-potential-in-asia-hong-kong-shows-the-way