Pet foods and related supplies represent a solid export potential for U.S. suppliers.
U.S. brands are the market leaders in both the economy and premium pet foods and supplies sectors. U.S. pet foods enjoy a reputation for having good nutritional value, and functional packaging. In 2009, in spite of the contraction of the economy and domestic consumption, demand for pet foods and supplies from the U.S. will continue to increase at double-digit growth rates as end-users are willing to spend on quality and nutritious pet foods.
The Hong Kong pet foods and supplies market was worth US$40 million in 2008. Imports of pet foods and pet supplies amounted to US$51 million, of which about 22% were re-exported, mostly to Macau and China. The U.S. was Hong Kong’s largest source of imported pet foods and pet supplies (43% or US$22.2 million) in 2008, followed by France (16% or US$8.1 million,) Thailand (9% or US$4.9million,) China (9% or US$4.5 million,) and Japan (9% or US$4.2 million.)
Dogs are the most popular pets in Hong Kong, followed by ornamental fish, cats, birds, and small animals. Industry sources expect pet ownership to increase in Hong Kong with cat-ownership growing at a faster rate than that of the other types of pets. Sales prospects for snack foods, nutritional supplements, and premium-type pet foods for dogs and cats, and pet supplies such as toys, clothing, footwear and personal hygiene products remain bright. The best way to enter this market is to appoint a local distributor.
Only one fifth of the Hong Kong population, or 1.4million people, own pets. The number of pet owners in Hong Kong is low compared with nearby Taiwan, where 35% own at least one pet. The lower share in Hong Kong is attributable to the limited living space and the hectic lifestyle of the population. Dogs are the most popular pets followed by ornamental fish, cats and turtles. Traditionally, Chinese families who have pets keep gold fish, birds or tortoise. Gold fish were kept for “fung shui” (Chinese geomancy) purposes. Local firms often have an aquarium in their offices or retail shops. When Marks and Spencer, the British retailer, opened their shops in Hong Kong, a local “fung shui” master recommended the inclusion of aquariums in their store decorations and all their retail stores still contain this feature. Tortoise, considered a longevity symbol, and birds are popular pets among the older generation.
Hong Kong pet owners are now mostly households comprising young dual-income earners with no children. Owning pets has also become a status symbol in Hong Kong and many young couples that postpone having children keep pets. There are now an estimated 200,000 in Hong Kong with dogs; 64,000 with cats; 12,000 with birds, and about 260,000 households with ornamental fish. Keeping small animals (reptiles, chinchillas, guinea pigs, hamsters, terrapins, etc.) as pets is still relatively unpopular. About 20% of the pet owners keep two pets and about 10% keep more than two pets. Also more than 90% of pet owners in Hong Kong buy commercially produced pet foods for their pets.
Dogs and cats
Owing to the lower maintenance cost of cats, in the last few years they have become increasing popular and have grown at a faster rate than dog ownership. Keeping cats is more also more suited to the busy lifestyles of Hong Kong residents.
The return of dogs’ ownership, post-SARS: Following the SARS outbreak in Hong Kong in March 2003, the government implemented a “points” scheme for hygiene-related misdeeds in Public Housing Estates (PHEs.) Offenses classified as “misdeeds” included “allowing animal and livestock under charge to foul public places with faeces.” A PHE tenant who accumulates 16 demerit points will be liable to have his tenancy terminated. At the same time, the Housing Authority also stepped up enforcement of the restriction of keeping animals in PHEs. PHE tenants were given a two-month grace period to dispose of their pets and other animals. The “no-pets” ruling in PHEs has been in effect since 1996 but the Housing Authority did not enforce the rule strictly, and many PHE tenants continued to keep pets at home. The implementation of the “points” system together with the strict enforcement of the “no-pets” rule following the SARS outbreak in Hong Kong deterred many would-be dog owners. There was a decrease in the number of dogs being bought in the few months after the SARS outbreak. Some households also had to abandon their dogs. The Housing Authority opened its first dog park in April 2007 built in the new PHEs, to allow tenants to walk their dogs. There are now 6 dog parks in Hong Kong. Private residential building owners are also providing amenities to facilitate tenants keeping dogs. These measures have helped reverse the declining growth rate of households keeping dogs.
In Hong Kong, 65% of the dogs kept as pets are classified as small dogs (not over 20kg in weight) while the remaining 35% are classified as large dogs (over 20kg in weight.)
Trade sources estimate that about 260,000 households in Hong Kong keep fish as pets and there are about 200 ornamental fish shops supplying fish, feed and accessories. Unlike households in the U.S. or Europe that keep one fish per aquarium, Hong Kong households usually keep on average, 4-6 fishes in one aquarium. The ornamental fish population in Hong Kong is estimated at 1.5 million, comprising mostly gold fish and koi, imported from Japan, Taiwan and China. The next most popular are tropical fish. Industry sources estimate that ornamental fish food accounts for about 15% of the total market value of pet foods and supplies in Hong Kong. Owing to the ease of care, low maintenance cost, and low space requirements, fish are extremely popular as pets in Hong Kong. In addition, fish are perceived to represent good fortune and an aquarium is often used to ward off “bad” fung shui in an office, home, or place of business. The ornamental fish market in Hong Kong is, however, fairly saturated.
Aquarium shops are the major suppliers of ornamental fish and accessories though specialty pet shops also retail ornamental fish food and accessories.
Birds and other small animals
Birds are popular as pets in Hong Kong owing to their low maintenance costs and low space requirements. Bringing one’s pet bird to a Chinese teahouse in the morning is a common sight in Hong Kong. It is a tradition among older Chinese men. Parrots are the most common among households that keep birds. Owing to space constraints in many Hong Kong households, other popular birds are the smaller canaries and finches. The outbreaks of avian flu in the past and the subsequent bans on bird imports have had a negative effect on the pet bird food and supplies market. Birds are imported from China, Australia, South America, and Southeast Asia.
Hamsters, rabbits, turtles and tortoises are the most popular among the small animals that Hong Kong households keep.
By Swee-keng Cheong