Pet Industry Giants Accelerate: How Can Other Players Survive?

As pet industry dividends fade, top giants grow faster than the average, integrating supply chains and acquiring assets to build barriers. SMEs can survive via niche differentiation, user-centric innovation and high-efficiency operations amid industry restructuring.

• Cooperate with a reliable OEM factory for production

• Develop a differentiated product to stand out

• Launch grassroots marketing notes on mainstream platforms

• Partner with top livestreamers to boost sales

This model easily built brands with tens of millions in annual sales, but it has become obsolete as industry dividends—including category, channel, traffic and consumer dividends—have completely dried up.

In 2025, the pet market still grows steadily, but the structure has shifted: top players outpace the industry average. Tmall pet food CR10 reached 44% during 2025 618, with Pedigree and Royal Canin leading online sales. Giants are accelerating M&A, while cross-border giants enter with capital and supply chain advantages, squeezing the whole industry chain.

• Brand Mind Occupancy: Shifting from traffic-focused operation to long-term user loyalty building, as traffic dividends peak and customer acquisition costs surge

• Supply Chain Efficiency: Establishing cost and margin moats, with greater flexibility to cope with trade frictions and cost fluctuations

• Strategic M&A Integration: Using capital to acquire mature R&D systems, sales channels and digital capabilities, saving time for rapid growth

The pet industry will not fall into absolute monopoly, and SMEs still have viable survival space for two key reasons:

• Diversified Market Demands: Pets of different breeds, ages, sizes and health statuses have highly customized needs, driving the trend of special-purpose products and leaving room for niche segmentation

• Innovation Advantages of SMEs: Most category and concept innovations originate from small brands, which have no resource burdens and can easily find breakthroughs in edge segments by solving real user pain points

For non-top pet SMEs, two core capabilities are essential to thrive amid giants’ acceleration and navigate industry cycles:

• Extreme Efficiency Awareness: Maintain strict ROI control for every investment, especially critical for resource-limited SMEs with no room for trial and error

• Deep User Insight: Focus on specific small-scale user groups, grasp their real needs and worries instead of pursuing broad markets, forming irreplaceable advantages

The industry is clearly stratifying: Top giants compete head-on in mainstream markets, building barriers with brand, channel and scale advantages; SMEs carve out their own bases in niche segments through differentiation, innovation and dedicated services, with the two tracks running in parallel.