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With the increasing prevalence of social phenomena such as aging population and young people living alone, pets have become an indispensable part of many people's lives. More and more home furnishing companies are embracing the pet economy, not only in pet furniture such as cat and dog beds and pet mats, but also making "pet space" an important component of home design. What business opportunities will this bring to the home furnishing industry, and how difficult is it to get a share of it?

The wind of 'pets' has swept into the home industry

According to the "2023 White Paper on Pet Market Consumption", a review of the new paradigm of home furnishings shows that by 2023, the size of pet owning households in China will exceed 100 million, and the number of pets will increase to 200 million, with a growth rate rebounding from -1.50% in 2022 to 2.70%. The "other economy" is fully emerging.

At the recent Shenyang Home Expo, a "Sweet Pet Hug Party" pet home exhibition was specially set up, which shows that the home industry has also begun to realize the business opportunities behind the "pet economy". However, in order to seize this incremental market, it is necessary to understand the needs of consumers.

Firstly, behind the flourishing development of the "it economy" is the driving force of consumer emotional needs.

Taking the growth of pet ownership in 2023 as an example, it has already exceeded the natural population growth rate of that year, which actually reflects the subtle psychological shift of residents in social change - influenced by the accelerated pace of work and life, changes in love and marriage concepts, the overall marriage and fertility rates in China are declining, the aging trend is gradually intensifying, and residents' sense of loneliness will increase. Pets can precisely meet some of the emotional needs of pet owners.

If the fertility rate and aging trend cannot be effectively alleviated, it can be inferred that the scale of the pet economy will continue to expand, and the market size is expected to reach 811.4 billion yuan by 2025.

Secondly, young people have become the mainstream of pet ownership. Data shows that over 50% of pet owners are born in the 85s and 90s, and their consumption habits can also affect the development of the pet economy. Pet owners, with Generation Z as the main group, have an annual consumption expenditure of around 30-10000 yuan for pet ownership. They are willing to spend money and have a higher demand for personalized pet supplies, which will continuously enrich the pet ownership scene and lead the pet home industry to continue developing in different segmented fields.

The new paradigm of home furnishings has discovered that under the joint influence of demand and supply, the pet home market is also becoming a "battleground" for home furnishing brands.

One is the reshaping of home space. With the increasing status of pets in households, they occupy more positions in the home space. This requires pet owners to consider how to customize a unified living space for pets from the design stage, design a flow line for humans and pets to live together, and create pet homes that can integrate with the home.

The second is the innovation and iteration of pet home furnishings. In recent years, pet furniture such as cat climbing frames and scratch resistant sofas have gradually entered the public eye. Efforts have been made in materials, functions, and exterior design to make pet owners willing to pay for them.

The third is the breakthrough in the field of smart pet home appliances. In recent years, fully automatic cat toilets, intelligent pet water dispensers, intelligent feeders and other smart home appliances have become new traffic entry points for smart homes, and have become an important part of the intelligent ecology of pet raising households.

What is the 'money market' for pet homes?

Under the guidance of market size and purchase intention, pet home is no longer a niche track, but has attracted many leading pan home brands to settle in, and many new brands have also risen from it.

In terms of customized pet home spaces, Gu Jia has launched the "Walden" series of customized solutions for people and pets to live together, allowing both humans and pets to have independent spaces; OPPEIN takes balcony space as the starting point and launches the "Cute Pet Paradise" series of products for balcony pet raising.

In terms of pet furniture, home furnishing leader Quanyou Home has launched cloud sofas, soft beds, etc. made of cat scratch velvet fabric, which is thick, durable, and not easy to snag; IKEA has launched more furniture items suitable for pets, such as sisal carpets, wicker seats, scratch resistant sofas, etc.

There are also some new generation brands, such as pet supplies brand Zeze, pet home brand FENDEAR under Zhiou Home Furnishings, pet home brand Hekai, etc., creating more "high-value" and "pet material" pet home products.

In the field of pet home appliances, market competition is even more intense. Big brands such as Xiaomi, Midea, and Haier have all established their presence in this field. In addition to directly launching pet home appliances, they are also developing pet related functions in their existing home appliance product lines. For example, Haier previously released a new invention patent for a method and device for predicting pet behavior and home appliance equipment.

There are also many new favorites in the capital market in this track, such as the small pet brand "Buka Xing" that focuses on research and development, production, and sales of supplies and food for small pets such as hamsters, parrots, rabbits, and turtles. It has just received a billion yuan Series A financing; Pet intelligent product brand Xiaopei Pet also completed a $50 million Series D financing in 2021.

The new paradigm of home furnishings has discovered that so many "players" have entered the pet home market, witnessing the outbreak of the pet home market and making industry competition even more intense. However, whether players' lives are "nourished" seems to vary from person to person.

In the domestic market, according to Tianyancha data, there are nearly 100000 companies that have been established for less than one year when searching with the keyword "pet", but their current registration status has been displayed as "cancelled" or "revoked", and many companies cannot even persist for a year. Although the pet racing track is hot, the current penetration rate is insufficient.

The industry expects the market size of pet smart products to grow to 9.81 billion yuan by 2026, but currently the penetration rate of pet home appliances in the domestic market is about 22%, while the penetration rates in the United States and Europe are as high as 70% and 46% respectively, which will further intensify competition in the industry. This has led to serious homogenization, uneven quality, and low content of intelligent technology in the industry.

Therefore, although the overall growth rate of the pet home industry is fast, for example, during the "618" period, the sales amount of pet smart products in JD Supermarket increased by over 169% year-on-year, but it is not easy for enterprises to break through the encirclement. In the foreign market, pet home appliances are expected to tap into a larger incremental market.

At present, most pet appliances in overseas markets are still in the early stage of intelligence, and domestic enterprises are accelerating their layout. Some manufacturers have stated that after expanding into overseas markets, their sales growth in the following month will reach 30%.

Four major trends lead the development of the industry

The pet home market is booming, and home furnishing companies need to explore differentiated development paths. Through "innovation", not only can companies shape their brands, but they can also avoid continuous low price competition, which is also one of the survival rules for small and medium-sized enterprises.

The new paradigm of home furnishings believes that as pet owners become increasingly "refined," "anthropomorphic," and "personalized," the future pet home market will develop towards four major trends: intelligence, high-end, environmental protection, and socialization. Firstly, intelligent pet supplies will become the mainstream trend in the industry.

During this year's 618 shopping festival, according to data from Taotian, the fastest growing category in the series of pet supplies was the pet intelligent deodorizer/air purifier (+330%), followed by the pet intelligent feeder (+230%).

But according to industry insiders, the development cycle of basic pet home appliances is not long. For example, it takes 3-4 months for smart drinking water products to be defined and mass-produced, and the competition in this field is also very fierce. So, some companies are trying to start from segmenting their needs and adding features such as smart cameras and health monitoring to their smart products, taking a differentiated approach; Some companies also take the route of not making money from products and making money from consumables, such as selling smart cat litter trays that can drive continuous sales of cat litter. These ideas are worth considering for companies.

Secondly, there is the demand for environmental protection, which is also one of the directions for enterprises to explore differentiation. Pet furniture is aimed at pets who are difficult to maintain and may have odors, which also requires continuous innovation in pet home materials towards durability, odor absorption, and environmental protection. Furthermore, the high-end pet home customization market is worth cultivating and working on.

At present, although OPPEIN, Sofia, Gujia and others have customized pet space layouts, this demand has not yet become mainstream, and more customization is combined with balcony and bathroom spaces. But just like customized homes for aging, as the number of pet owners continues to increase, this demand will also gradually grow. Although there is not much meat at present, it is still worth companies to take the lead in layout. Finally, there is a demand for socialization, as pet homes are mainly targeted at young consumers, which also requires companies to differentiate their sales models from traditional home furnishings.

By directly engaging with consumers through social media, live streaming channels, etc., brand influence can be enhanced, and feedback and evaluations from consumers can be obtained faster and more directly, facilitating product improvement and optimization.

Epilogue

Based on the trend of the times, the "loneliness economy" will inevitably promote the sustainable development of the "pet economy", and pet homes, as an important part of it, will also have considerable market growth space. Currently, although the pet home market has not yet become a "unicorn", both new and old players attach great importance to this market and are trying to take the lead. However, the development of the pet home market will be a "long run" towards deeper and more vertical full scene customization solutions. Home manufacturers want to hold onto the old cake and also learn to embrace new players.