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As the pet market in China experiences unparalleled growth, Mongolia stands at an appealing crossroad.
According to the 2021 White Paper on China’s Pet Consumption Trends produced by consumer research firm iResearch (the “iResearch white paper”), China’s pet industry was worth RMB 298.8 billion (US$44.4 billion) in 2020 and reached a projected RMB 348.8 billion (US$51.5 billion) in 2021, a year-on-year growth rate of 16.7 percent. The iResearch white paper also projects the industry to reach RMB 445.6 billion (US$66.1 billion) by 2023.
China’s booming pet market implies huge opportunity to Mongolia’s pet food production and luxury pet fashion sectors.
Pet food production and export: An established pathway with proven potential
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As of 2020, Mongolia boasted an impressive livestock count of over 70 million animals, a testament to its vast agricultural prowess. With China’s burgeoning pet population seeking quality nutrition, Mongolia has huge potential and clear advantages in the pet food production area:
- Pasture-fed quality: The traditional Mongolian rearing of livestock, from its vast population of 30 million sheep to 4 million cows, guarantees meats high in omega-3 fatty acids, antioxidants, and essential vitamins. These benefits translate to improved health outcomes for pets, making Mongolian products an attractive proposition.
- Existing export experience: The success of Mongolian producers in affluent Asian markets like Japan exemplifies the nation’s potential. As the Chinese pet food market grows, set to exceed US$8 billion by 2025, Mongolia’s existing export experience positions it favorably to capture a significant share.
Upscale pet fashion products: Tapping into the luxury segment
The Chinese upper-middle-class consumer, armed with disposable income and a penchant for luxury, is increasingly turning to upscale pet products. Mongolia, with its agricultural resources, stands ready to cater to this demand in areas such as below:
- Cashmere and more: Mongolia, producing a significant 20 percent of the world’s cashmere, has the potential to redefine luxury wearables for pets. Be it sweaters, scarves, or hats, Mongolian cashmere can set a new standard in pet fashion.
- Leather bags for pet carrying: Beyond cashmere, Mongolia’s tradition in leatherwork, fueled by its livestock numbers, can contribute to the creation of luxury pet carry bags. As fashion integrates more with pet care, these items hold the promise of becoming indispensable accessories for the stylish pet owner.
While Mongolia’s resources are vast and unique, the task of scaling up to meet the demands of the Chinese market is challenging. Recognizing this, Mongolian producers are eager to forge collaborations, seeking both capital and expertise. This collaborative spirit paves the way for synergistic partnerships.
Conclusion
The synergy between Mongolia’s agricultural potential and China’s booming pet market represents a business opportunity of the decade. Be it in delivering quality nutrition through pet food or setting new luxury standards with cashmere and leather products, Mongolia is poised to create ripples in the industry. For discerning investors, the timing couldn’t be better.
About Us
China Briefing is written and produced by Dezan Shira & Associates. The practice assists foreign investors into China and has done so since 1992 through offices in Beijing, Tianjin, Dalian, Qingdao, Shanghai, Hangzhou, Ningbo, Suzhou, Guangzhou, Dongguan, Zhongshan, Shenzhen, and Hong Kong. Please contact the firm for assistance in China at china@dezshira.com.
Dezan Shira & Associates has offices in Vietnam, Indonesia, Singapore, United States, Germany, Italy, India, Dubai (UAE), and Russia, in addition to our trade research facilities along the Belt & Road Initiative. We also have partner firms assisting foreign investors in The Philippines, Malaysia, Thailand, Bangladesh.
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