< img height="1" width="1" style="display:none" src="https://www.facebook.com/tr?id=1100159444078276&ev=PageView&noscript=1" /> 5 Reasons to Expand into the Pet Food Market in China
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5 Reasons to Expand into the Pet Food Market in China

According to the 2021 Mintel Pet Food Market Report, while there is a massive growth in pet ownership in China, overall spending on pets remains low, well behind the USA’s. 

The desire for a pet increased in 2020-2021 by around 25% due to the pandemic and other long-term trends. Yet, spending on pet food in China is only 3.1% of the same in America, meaning there is a massive opportunity for growth.

As the effects of the pandemic begin to tail off, it’s going to be more critical than ever to jump into the Chinese market for companies creating and distributing high-quality pet food and supplies. Domestic brands currently remain less desired than foreign brands that can boast higher levels of quality control and responsibly sourced material. Now, this means foreign producers can take advantage of a golden opportunity by entering the Chinese market and meeting demands while local competitors are still trying to catch up.  

 

5 reasons to expand your business in China

 

Reason 1- China’s Continued Growth

China has seen continued growth during the pandemic than most other countries, with the situation essentially now back to normal. A much faster recovery period than many other countries still dealing with rises in infections means China is ready to reopen and accept new businesses.

 

Reason 2- Expanded Demand

Despite tighter restrictions on dogs in Tier-1 cities which have led to a slower rise in the desire for dog ownership, general pet ownership in China is rising. What’s more, there’s a much higher demand for quality pet food. The humanization of pet food into “candies” or “snacks” and an overall increase in Chinese owners seeing pets as friends or children means Chinese consumers are now ready to spend more on their pets. 94% now see quality as the priority when searching for pet food, according to Mintel’s study.

 

Reason 3- Room for Growth in Key Food Areas

While dry foods remain the highest earner in terms of types of pet food bought, higher quality wet foods and snacks are on the rise. Currently, only 23% of Chinese consumers buy more domestic brands than foreign, suggesting a significant opportunity for foreign brands which can meet this increased demand.

 

Reason 4- The Importance of Food Safety to Chinese Consumers

China’s food safety standards typically fall behind or are seen to fall behind those in foreign countries. More and more Chinese consumers are looking for brands that offer higher quality assurance and responsibly sourced natural ingredients.   

 

Reason 5- Strong Local Business Resources

While entering China can seem daunting, it’s essential to recognize that there has never been a better time to make use of local PEOs and EORs. These partners can cut through administrative regulations that often dissuade companies from operating in China. To make the most of post-pandemic opportunities, either as companies of their own or through local business partners. 

 

How You Can Get Started in China

 

In recent years China has made efforts to make it easier for foreign investors to open businesses in China without local joint-venture partners. Called a WFOE (Wholly Foreign-Owned Enterprise), foreign investors can open a company without local investment. However, the continued limits on WFOEs and the still complex system of bureaucracy and regulations means that establishing a separate legal entity in China may not be the best option for many.

Instead, a popular option for foreign companies wishing to establish themselves in China while avoiding the pitfalls of company incorporation is to work with a PEO/EOR service provider.

 

What INS Global can do for You

 

INS Global is an HR outsourcing services provider with over 15 years of experience helping companies expand into the Chinese Market. We can provide every service needed to help you break into China and succeed, from PEO/EOR services, to payroll outsourcing, company incorporation, recruitment, or headhunting.

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