Top dog: China's newfound passion for pets is big business

By Donny Kwok and Adam Jourdan HONG KONG/SHANGHAI (Reuters) - Shanghai bank employee Frances Chen spends about a fifth of her monthly salary on her poodle Cookie, one of the millions of pet owners turning China's pet care industry into one of the fastest growing in the world. Chen takes Cookie to a groomer for a weekly shower and feeds it imported food, costing her some 2,000 yuan ($320) a month. "I want to give him the best," said the single, 26-year-old who lives with her parents. "He's our kid. The only difference is that he can't speak human languages." Once banned by Communist leader Chairman Mao Zedong as a bourgeois pastime, having a pet has now become a symbol of financial success in China, where consultants Euromonitor forecast the pet care sector to grow by more than half to 15.8 billion yuan ($2.6 billion) by 2019, outpacing the world's biggest market the United States, which is expected to grow just over 4 percent this year to $60.6 billion. The prospects have multinationals such as Mars Inc, Nestle S.A. , Procter & Gamble Co and Colgate-Palmolive Co licking their lips, especially as growth in the overall retail market slows along with the world's second largest economy. Dogs are by far the most popular pets and dog food sales alone are expected to almost treble to over $760 million by 2019, Euromonitor data shows, as higher disposable incomes make keeping a pet an affordable luxury for more Chinese, particularly in more developed cities. The loneliness and stress endemic to city life are also driving the pet ownership boom: last year, some 30 million households, or nearly 7 percent of the nationwide total, owned a dog, Euromonitor said. Matthias Berninger, Mars global head of public affairs, said there was plenty of room for growth in China's pet food market, which was already expanding beyond most industry expectations. "Pet food penetration in China is very, very low," he told Reuters. "People didn't believe chocolate would ever be something Chinese consumers would like, let alone that Chinese consumers would become passionate pet owners." The U.S. firm renowned for its confectionery owns pet food brands including Pedigree and Whiskas. Mars was the market leader in China two years ago with a two-thirds share, according to the latest Euromonitor data. Nestle-owned brands were second with just over 16 percent followed by local firm Nory Pet (Shanghai) Co Ltd with an almost 7 percent share. "There is huge demand for pet food as owners give up feeding their dog rice and meat and switch to proper pet food," Chen Xiuqiang, sales manager at pet food importer and distributor Guangzhou Mudi Trading Co Ltd told Reuters. THE CAT'S MEOW In addition to branded food, more Chinese are paying top yuan for pedigree dog breeds such as Tibetan mastiffs, and the services and accessories they think these prized pets deserve. "In big cities like Shanghai, many people feel lonely and treat pets like family," said pet groomer Zhao Huanhuan. "People are now willing to spend on their pets as much as they are willing to spend on their parents." Beijing pet photographer Yipets offers clients packages - including pet costumes and styling - that range from 388 yuan to 8,888 yuan ($63-$1,430) while a one-month dog training course at JinJiaJun Kennel can cost 5,000 yuan. Luxury retailers are also benefiting. U.S. firm Chrome Bones, which opened its first China franchise in Shanghai in September, said sales have risen by up to 40 percent a month. The brand specialises in Swarovski-crystal encrusted pet collars that cost some $260, snakeskin carriers that start at $3,800 and patent leather beds and bowls. "The prospects are very good," said shop owner Chen Yinfeng. Pet pampering has also become big business. Cole Zhang, who owns Blue Bone near Shanghai's Bund, offers to chauffeur canine clients in a Ferarri or a Maserati, a service he said costs up to 500 yuan a kilometre and is often booked out. "On average, we have more than 100 clients a week. We usually work overtime on weekends," he added. "Most of my customers treat their dogs very well and they are willing to spend a lot on their dogs." (Additional reporting by Nicole Li and Viola Zhou in HONG KONG; Writing by Anne Marie Roantree; Editing by Miral Fahmy)