Gifts / Sports & Toys

Recently, the news that China's population has experienced historical negative growth has caused heated discussion from all walks of life. The demographic changes caused by the decline in the birth rate and the intensification of aging are issues that global gaming companies are facing. In addition to exploring "big boys" over the age of 12 and "silver haired people" over the age of 60, pets, a special group, have also begun to enter the perspective of toy manufacturers. Huacheng Import and Export Data Observation Report.

If there are business opportunities, there must be entrants, and even cross-border players outside the circle will be attracted. According to Huacheng Import and Export Data Observation, luxury brands such as CELINE and Gucci have entered the field of pet products overseas. Some traditional toy companies have sensed business opportunities and started to cross the border in the field of pet toys. As early as 2021, Jazwares Toy Company, which promoted itself to the top of the plush toy industry with Squishmallows, joined hands with outdoor toy company Wham O. After adjusting its original product lines such as Frisbee, Hula Hoop, and Elastic Ball, it launched toy lines for pet groups. In China, dating Pia has been making pet rubber toys from remote controlled racing tires since 2020. McDonald's and Kentucky Fried Chicken, which are mainly engaged in catering but have become popular on the internet, have also enjoyed the benefits of pet toys. In 2021, McDonald's exploded social networks with the news that 100000 hamburger boxes and paper cat nests were sold out in less than an hour; In 2022, KFC followed up with the launch of plush toys and pet nests for pets, which also quickly became popular and became a new traffic password.

As the spiritual sustenance of some contemporary people, pets have a huge market at home and abroad. According to Huacheng Import and Export Data Observation, the largest pet market in the world is in the United States, accounting for about 1/3 of the global market. The European market ranked second in demand. In addition, demand from countries such as Japan, Brazil, and Thailand is also rising. China is no exception. According to the "2021 China Pet Industry White Paper" guided by the China Animal Husbandry and Pet Industry Branch, the size of the national urban pet consumption market will reach 249 billion yuan in 2021, and it is expected to further increase to 445.6 billion yuan by 2023. From a long-term perspective, the field of pet toys in China is facing a strong opportunity for vigorous development. First, the spiritual demand for pet companionship among Chinese people is increasingly prominent, and the number of pets is increasing. Euromonitor International pointed out that the number of pets in China has increased from 130 million in 2016 to 200 million in 2021. The second is that the proportion of high-income pet owners continues to increase, showing a trend of high education and youth. According to Huacheng Import and Export Data Observation, in 2021, more than 30% of pet owners in China earned over 10000 yuan per month, with over 60% having a bachelor's degree or above, and nearly 50% having a post-90s education. The continuous popularization of the concept of "humanization" of pets has prompted the market to continuously increase its requirements for pet products and strengthen its willingness to consume. Fourth, there is still much room for improvement in the penetration rate of the domestic market, especially in the sinking market, which will generate huge consumer demand. Pet toys have thus become a potential business development point.

Pet toys belong to a category of pet products, which are different from traditional toy products in terms of audience. It is designed specifically for pets' daily play and behavior training, preventing problematic behaviors caused by boredom and excess energy, and helping to improve their overall health. Pet toys may seem inconspicuous, but they are very attractive. Taking the United States, the world's largest pet product market, as an example, data from the American Pet Products Association (APPA) shows that the average annual cost of pet toys (only for cats and dogs) in the United States has increased from $64 in 2013/2014 to $79 in 2019/2020, accounting for approximately 3% of all pet expenses (mainly medical and food). With the increase in pet owners' awareness of pet care, the demand for toys is also increasing. Overseas demand has also driven domestic pet products companies. Hongrongsheng Toys Co., Ltd., located in Suixian County, Hubei Province, is a pure export enterprise specializing in the production of pet toys. According to the relevant person in charge, the company develops more than 600 individual products every year, with an average of 3 million pet toys going abroad every month. In addition, the pet economy has also attracted the attention of domestic capital. In 2022 alone, there were four "pet stocks" listed, including Luc Shares, Yuanfei Biology, Tianyuan Pets, and Guaibao Pets. According to incomplete statistics, at least seven pet companies are closely preparing for IPOs. Most of the products of these enterprises are exported overseas. Taking Tianyuan Pets, which mainly sells cat racks and pet toys, as an example, the overseas sales revenue from 2019 to 2021 accounted for 90.94%, 74.08%, and 72.31% of the company's main business revenue, respectively, mainly sold to the United States, Australia, Germany, and so on. The total revenue in these three years has also increased rapidly from 1.049 billion yuan to 1.854 billion yuan. Among them, pet toys account for 20.19%. The above data indicate that the demand for pet toys is growing rapidly, and although it is still mainly overseas, the domestic market is also enjoying a strong growth momentum.

If traditional toy companies want to cross border into the field of pet toys, they can start from categories with high synergy in their main businesses. According to their functions, pet toys can be divided into tooth grinding and cleaning toys, food hiding and food leakage toys, and vocal toys; According to material classification, it can be divided into knot type, latex type, etc; According to the purpose, it can be divided into ball type, molar type, training toys, etc. The aforementioned dating Pia has the core technology to handle rubber materials, so she started with latex pet toys; There is also a collaboration between Jazwares and Wham-O, which spans from outdoor toys to pet training toys, with common core functions and material usage. In addition, there are also electronic and electric toy manufacturers that cross the border to pet vocal toys, and plush toy manufacturers that cross the border to knot (plush) toys are also possible paths to try. In terms of research and development, there are also similarities. According to the director of the R&D department of Hongrongsheng, which specializes in the export of pet toys, similar to ordinary toys, the main decision-maker in the consumption of pet toys is the female owner, who loves them as "children". Therefore, product research and development should focus on her preferences, focusing on the color, shape, and style of the product, making people feel "my pet must like it" at a glance, generating a desire to buy. The company has a research and development team of 26 people, which closely follows the changes of market trends. For many years, its products have been among the top ten pet toys sold by Wal Mart, and a "squeaking pig" has been the first supermarket in sales for three consecutive years. In terms of safety testing, if the materials used in the production category are similar before and after cross-border operations, the threshold for cross-border operations is not high for enterprises. As far as the author knows, there is no specific safety standard for pet toys at home and abroad, which is basically implemented by applying a set of standards for ordinary toys. There are also plush and knot types, which will refer to textile standards. Compared to manufacturing companies in other fields, this is also an advantage of cross-border pet toys for ordinary toy companies. In terms of channels, overseas markets are dominated by cross-border or international well-known pet retailers such as Petco, Petsmart and chain retailers such as Wal Mart and Target; In addition to offline pet stores in China, the proportion of online sales exceeds 55%, which is precisely the channel that toy companies have deeply explored in recent years, and there are similarities. In a word, the pet track with a scale of hundreds of millions of "shoveling feces officials" and hundreds of billions is worth the effort of brands and entrepreneurs. Huacheng Import and Export Data Observation Report.