[Big read] China’s ‘fur kids’ fuel a billion-dollar pet boom

On a table adorned with fresh flowers, a small dog in a checked outfit lies quietly, covered by a thin blanket, surrounded by white roses as well as snacks and toys neatly arranged to one side. Guided gently by the mortician, the dog’s owner bids a final farewell to their beloved pet.

Inside an end-of-life pet care shop in Guangzhou, a small, airy farewell room holds a quiet, restrained warmth. Here, many Chinese pet owners bid goodbye to their “fur kids” through simple ceremonies that blend ritual with human care.

Li Nuo, 29, a pet mortician in Guangzhou, told Lianhe Zaobao that a few years ago, pet funerals were largely limited to basic cremation. But as more Chinese owners come to see pets as family, demand has grown for services that celebrate their lives, making dignified end-of-life care increasingly common.

A former pet owner, Li was unable to give his cat a proper farewell when it died suddenly during his university days — a regret he carried with him.

Two years ago, he entered the pet end-of-life industry and has since conducted hundreds of funerals. In helping owners find closure, he has handled not only cats and dogs, but also hamsters, rabbits, parrots, hedgehogs and even ducks.

Li Nian, manager of Zhongmu (终沐), a pet end-of-life services chain, told Lianhe Zaobao: “At its core, this is about tending to emotions, not just handling funerals.”

Beyond morticians, outlets are staffed with trained grief counsellors. Services begin by gently supporting owners through conversation, helping to ease grief and steady their emotions as they face their pet’s passing.

Consumers of pet funeral services are still mainly in their 20s and 30s, though older family members and children often join the ceremonies. Li noted that a formal farewell for a beloved pet also becomes a moment for parents to gently teach children about life and death.

Data from Chinese lifestyle platform Dianping showed that Guangzhou had at least 70 pet end-of-life outlets, offering customised services based on clients’ needs, including grooming, cremation, bespoke keepsakes, blessing rituals, ash storage and so on, with prices ranging from a few hundred to several thousand yuan RMB.

Industry insiders said that in first-tier cities like Guangzhou, a relatively complete pet end-of-life package cost on average between 3,000 and 4,000 RMB (US$434 to US$578) per customer.

As a niche business, pet funerals still face low acceptance among non-pet owners, some of whom view them as “inauspicious”, alongside other biases and practical hurdles. Despite this, Li remains optimistic about the sector’s future.

She felt that as social attitudes continue to shift, more pet owners will opt for professional farewell services and overall market demand in the industry will keep growing.

This optimism is also manifested in the brand’s own plans. Zhongmu’s first outlet opened five years ago, and after several years of growth, it now has eight outlets across China in cities including Qingdao, Guangzhou and Dongguan.

Li said that in the future, once they turn a profit, they plan to support employees who can operate independently to open more outlets and expand the business to more cities and regions.

The growing demand for pet end-of-life services is a microcosm of the Chinese pet economy’s shift towards more refined and emotionally-driven consumption.

As pets become an important emotional anchor for many people, the pet consumption market has expanded beyond basics such as food and medical care to include photography, grooming, fashion, insurance, home feeding services, full-cycle healthcare and psychological counselling among other services, forming a complete industrial chain covering the entire life cycle of pets, from birth to ageing to sickness and death.

According to the 2026 China Pet Industry White Paper, released by PaiDu Pet Industry Big Data Platform together with several industry associations, there were 126 million urban dogs and cats in China last year, and the market size reached 312.6 billion RMB — an average annual spend of about 2,480 RMB per animal. The report also projected that by 2028, total spending in the pet sector would reach 405 billion RMB.

Zhang Min, a 38-year-old freelancer who keeps two cats, told Lianhe Zaobao that when her pets are healthy, their average monthly expenses are between 800 and 1,000 RMB, mainly for premium cat food, canned food, pet insurance, supplements, toys and annual check-ups. To save money, she washes and grooms the cats herself, as professional grooming would add quite a bit to the bill.

The costs would spike in the event of a serious illness. A few years earlier, one of her cats developed feline infectious peritonitis (FIP) and was eventually treated with Chinese, locally-produced medication, costing nearly 30,000 RMB — imported drugs would have doubled the bill. It was after that episode that she started buying pet insurance.

Yu Wengang, president of the Guangzhou Nansha District Pet Industry Association, told Lianhe Zaobao that about a decade ago, China’s pet owners were mainly middle-class households, and services for pets were scarce and relatively expensive. Today, the main group among pet owners has shifted to the younger post-90s and post-00s generations, pet ownership is much more widespread, and market demand has grown correspondingly stronger.

Yu said the proportion of pet-owning households in China is currently about 22% to 23%, far below that of countries such as the US and Japan. Compared with developed countries, China’s pet market still has ample room to grow and significant potential for further expansion.

The expansion of market size and the generational shift in consumers had driven an upgrade in the industry’s underlying precepts.

Chen Chen, a senior analyst at Analysys, said that over the past three years, China’s urban pet market has continued to expand, with rising spending per pet and growing expectations for quality. Consumption has also broadened from basic care to full life-cycle services — including dignity-related needs — significantly extending the industry’s value chain.

Chen noted that “pets themselves are a deep emotional projection”. The rise of the pet economy is a direct reflection of today’s emotionally-driven and self-care-oriented consumption in China. For young people especially, their emotional bond with pets is directly driving an upgrade in their consumption patterns.

Driven by the twin drivers of consumption upgrading and industrial transformation, the pet economy had in recent years become a new track on which local governments across China were vying to position themselves. Many regions had rolled out intensive policies and planned industrial parks, opening a full-scale race among cities to capture opportunities along the entire pet industry chain.

Since 2025, more than a dozen provinces and cities in China have introduced special policies designating the pet economy as a key new growth point. According to incomplete statistics from Chong YeJia, by November, there were 27 pet-industry clusters in 25 city-level areas across 16 provinces.

Take Jiangsu province: local authorities have integrated the concept of “pet-friendly” development into urban planning and industrial layout, pushing the pet economy from a single business model to a full supply chain ecosystem. In cities such as Nanjing, Wuxi and Yancheng, more and more shopping complexes, cafes and urban parks have improved their pet-related facilities to make it easier for pets and owners to enter and use these spaces together.

Positioned as a comprehensive cooperation demonstration zone for Guangdong-Hong Kong-Macau Greater Bay Area cooperation, Guangzhou’s Nansha district is also intensifying efforts in the pet industry, aiming to establish a leading pet industry hub in the Greater Bay Area. In January, local authorities released for public consultation a draft policy comprising eight measures to support the pet industry. The proposed measures include talent subsidies, tax incentives, and loan support, with the aim of promoting high-quality development of the pet economy. The policy is expected to be formally introduced soon.

The Nansha International Pet Community, covering about 10,000 square metres, was unveiled earlier this year. Yu, who is also CEO of the community, said the site has already developed core segments including high-end medical care, boarding and grooming, laboratory quarantine and testing, as well as leisure and retail services. It is also rolling out supporting facilities such as pet stations and pet parks, with the aim of creating a model “pet-friendly” ecosystem.

Nansha is also advancing cross-border veterinary cooperation across Guangdong, Hong Kong and Macau. Yu noted that, as the pilot hub for the “Hong Kong medicines first” scheme, the community will ease access for Hong Kong-approved veterinary drugs in mainland China. It also seeks to attract Hong Kong veterinarians, enabling smoother prescriptions and continuity of care.

Alongside its rapid expansion, China’s pet industry faces several practical challenges, including inconsistent industry standards, underdeveloped service regulations and a regulatory system that remains to be strengthened. Also, most companies lack fundamental research capabilities, leading to intense competition driven by product homogeneity.

Yu believes China’s pet sector experienced unregulated expansion from 2010 to 2017, but has now entered a critical phase at the intersection of red and blue ocean markets. Going forward, companies will need deeper expertise and more specialised, refined operations to stand out.

Healthcare challenges are particularly pronounced in the pet industry. Yu pointed out that China’s pet hospitals currently lack specific standards for medical equipment, constraining the development of industry standards. Furthermore, there is a shortage of qualified, licensed veterinarians, a scarcity of professional talent and relatively slow development of veterinary-specific medicines — all weaknesses that the industry urgently needs to address.

At this year’s Two Sessions (the annual meetings of the National People’s Congress (NPC) and the Chinese People’s Political Consultative Conference), several delegates submitted proposals on the standardised development of the entire pet economy, covering areas such as industry regulation and consumer rights protection.

Zhao Wanping, an NPC delegate and vice head of the Anhui Academy of Agricultural Sciences, proposed strengthening industry leadership and establishing a standardised service system, including formulating an industry standard for pet medical services, improving regulatory and certification mechanisms, and enforcing strict oversight of pet food and products.

Meanwhile, Chen noted that the pet markets in the UK, the US and other countries are extremely mature not only because of their large consumer base, but also due to the establishment of robust regulatory systems covering pet food, medicine and animal welfare, alongside a strong social and cultural consensus.

She said for China’s pet industry to develop in a regulated manner, it must prioritise fundamental research; achieve technological breakthroughs in core areas such as pet nutrition formulae, specialised veterinary medicines and precision of smart hardware sensors; build brand trust; and accelerate the improvement of related legal responsibilities and standards systems.

On the consumer side, Chen believes it is necessary to incorporate “scientific and responsible pet ownership” into social governance mechanisms, fostering a social consensus on pet care to cultivate a mature consumer environment.

As pet ownership increasingly becomes a lifestyle for Chinese youths, their demand for convenience and precision in pet care is rising, and artificial intelligence (AI) is rapidly entering this multi-billion-RMB market.

Smart feeding, health monitoring and interactive entertainment are currently the most prominent subfields. From self-cleaning litter boxes and feeders with scheduled, portion-controlled and remote operation, to smart collars that track real-time activity and health data, interactive pet companion robots, AI-powered pet cameras with pet emotion detection and temperature-controlled smart pet beds, intelligence has become a widely recognised trend in the pet industry.

According to an iResearch report, China’s smart pet products market was worth around 10.2 billion RMB in 2024, accounting for one-fifth of the total pet products sector. Data from Market Monitor (贝哲斯咨询) indicates that the smart pet products market hit 13.538 billion RMB last year, showing substantial growth.

Technology is completely reshaping how the younger generation cares for pets. However, behind the industry boom, many smart pet products on the market are still flawed, with some suffering from exaggerated claims, immature technology for detecting pet behaviour and emotions, and significant inaccuracies in health monitoring data. Yu noted that while smart litter boxes have grown rapidly, many still suffer from design flaws— wide gaps let in pests, and waste sticks to walls — problems that persist despite multiple iterations.

He thinks that while intelligent technology is an inevitable trend in the pet industry, it must address users’ needs with precision. He said, “AI is better suited to areas such as pet companionship and smart products, rather than veterinary diagnosis and treatment.”

He cited, for example, AI companion toys that enable real-time interaction with pets, which meet the practical needs of young working professionals who are unable to keep their pets company during the day. Such products are now emerging in China, with considerable room for future growth.

By contrast, he called AI-powered pet consultations a “false proposition”, noting their low accuracy and high false-positive rates. They can detect only minor issues like colds or digestive discomfort, while more serious illnesses still require veterinary diagnosis through tests and lab analysis.

Chen believes AI integration in the pet sector is still in its early stages. “Most AI-enabled devices only provide basic connectivity and data monitoring,” she said, with notable gaps in intelligent sensing and decision-making support. She cited “real-time pet translators” as mostly “stuck as marketing concepts,” adding, “To truly achieve effective communication between humans and pets would require deep integration of ethology, biological data, computer vision and large language model comprehension. This is something current technological capabilities still cannot support.”

With AI support, apps like “cat translators” recently became popular on major social media platforms in China. They analyse the pitch, frequency and rhythm of pet vocalisations to infer emotions and convert human speech into pet sounds. However, some users point out that these apps are less translation tools and more playful interaction gadgets.

Chen predicts AI in the pet sector will evolve from passive sensing to a “closed-loop service” that combines analysis, decision-making and care. AI-powered pet doctors could shift care from “reactive treatment” to “proactive prevention”, while smart devices could autonomously handle pet care tasks, opening new opportunities for innovation.

This article was first published in Lianhe Zaobao as “毛孩子催生千亿元市场 悦己浪潮中它经济狂飙”.

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