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China Is Experiencing a Demographic Shift: More Pets Than Children. This Phenomenon Reflects Profound Changes in Chinese Society and Opens New Market Opportunities
China has been the world’s demographic powerhouse for many years, but now it has more pets than children. Amid a population decline, with two years of demographic “explosion” already and after seeing how India surpassed it as the most populous country on the planet, the Asian giant is facing a new social reality. One with more dogs and cats than children in its homes. This is clearly shown by Goldman Sachs in a recent report that predicts that by the end of this decade, the country will have more than 70 million urban pets compared to 40 million young children.
Some view these figures as a lucrative business opportunity. Cities with more pets than babies. This is the landscape China faces according to Goldman Sachs, which in its latest report reveals how the populations of urban pets in the country and young children are following diametrically opposed trends.
The first is growing while the second is decreasing. The data is eloquent: in 2017, when China had about 90 million children aged zero to four, the population of urban pets—dogs and cats—stood at around 40 million. The U.S. analytics firm estimates that this year both will converge at around 58 million and that by the end of this decade, in 2030, China will host fewer than 40 million children under four years old compared to more than 70 million pets in urban areas.
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A Major Emerging Business
Following Japan’s lead, China finds itself on the same trajectory as countries like Japan and the United States, where the imbalance between children and pets is even more pronounced. In a Japan facing a severe birth crisis, the population of pets is already four times larger than that of young children, according to the Financial Times. In the U.S., the world’s largest pet market, government data and the American Veterinary Medical Association indicate that in 2020 there were between 84 and 89 million dogs and 60-62 million cats compared to 73 million children, not accounting for their age.
More pets translates into better prospects for the industry responsible for their care. This is an idea underscored by the Goldman Sachs report. Its figures are compelling. As the population of pet dogs and cats grows and even surpasses that of newborns, the market centered on their food also grows, becoming a thriving business worth 12 billion dollars, which is the outlook the U.S. analyst projects for the end of this decade.
Its report predicts that the pet food industry will grow in China at a compound annual growth rate of 8%, increasing from 51 billion yuan (7.1 billion dollars) in the previous year to 63 billion (8.8 billion dollars) by 2030. In a more optimistic scenario, with a particularly pronounced increase in demand among cat owners, the market could even double and reach 15 billion dollars.
Almost 83.2 billion dollars. The Goldman Sachs forecasts are not the only ones the sector is working with. In the fall, the firm iiMedia Research published its own report on the lucrative economy developing around pets in China. Its conclusion: in 2023, after registering a compound growth rate of 20.2% between 2015 and 2020, it has already reached 592.8 billion yuan (83.19 billion dollars). And with high prospects. By 2025, it is expected to reach 811.4 billion yuan (113.6 billion dollars). The authors of the study point to other segments beyond food, such as supplements, veterinary care, or toys.
Changes in Chinese Society
Positive outlook. “We expect greater momentum in pet ownership in a context of relatively weak birthrate and greater penetration of pets in homes among younger generations,” points out analyst Valerie Zhou in the Goldman Sachs report.
After the Chinese pet “boom,” there is, however, a complex reality that goes beyond the birth crisis. During an interview with the Financial Times, Laura Luo, who works in education in Chengdu— in Sichuan province—highlights the atomization of society. “Maintaining a relationship with a pet is much cheaper and less difficult than maintaining them between people,” she adds.
A changing society. The popularization of companion animals is just one clue indicating the changes the Chinese society is undergoing. The South China Morning Post pointed out another this week: couples in the country are marrying less and less. So much so, that barring unforeseen circumstances, everything points to this year falling to its lowest level in decades. Between January and June, 3.43 million couples were registered to marry, nearly half a million fewer than during the first half of 2023. If the trend continues, 2024 will close with the lowest level since the late 1970s.
The other trend, even more relevant, is the clear decline in birth rates. In 2023, the Asian giant registered 6.39 births per thousand inhabitants, which places the birth rate at its lowest levels since the founding of communist China in 1949. With 9.02 million babies, half a million fewer than the previous year, the nation’s population dropped to 1.409 billion people.
Image: Mehmet Aslan / Comedy Pet Photography Awards
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