As more makers join the line in hopes of profiting from booming overseas demand, competition continues to intensify. Many established makers are now relying heavily on R&D and up-market products — such as dog tuxedos — to attract buyers.
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-  Deep profiles of 14 qualified suppliers that offer details on manufacturing capabilities, quality controls, future development plans and more. Based on personal factory tours and interviews with senior managers, this information is available nowhere else.

Executive Summary:

The manufacture of pet products is a thriving industry in China that includes a wide range of items, including chews, leashes and collars, toys, beds and mats, clothing and kennels.

Although exact export figures are difficult to obtain, mainland China makers report that growing international demand — particularly from the EU and the US — has stimulated output. It is estimated that the country currently accounts for about 30 to 40 percent of the world’s pet products supply.

Export sales of pet products continue to increase in both value and volume at an approximate annual rate of between 15 and 20 percent. Some makers, particularly large, well-established ones, report even faster rates of growth as high as 60 percent.

Expectations for future success, however, are tempered by soaring raw material costs and intensifying competition. As prices of wood, leather, metals and fabric climb, makers across all product categories are adjusting bottom lines by streamlining supply chains, choosing alternative materials or reducing wastage.

Many companies will also expand capacity to achieve better economies of scale. Building additional workshops or relocating to larger factories are common strategies.

Nonetheless, the majority of companies still plan to raise prices through 2007, because they can no longer afford to operate on shrinking profit margins. The possibility of losing buyers to competitors offering lower quotes will prevent most makers from raising prices more than 10 percent.

The following are some of the key trends in China’s pet product manufacturing industry:
•  The number of suppliers joining the line will continue to increase, since the industry has yet to peak. Most newcomers will be manufacturers of non-pet products that have modified their existing equipment and added one or two pet product categories to their lineup.
•  Many factories will begin to move upscale, producing more midrange and high-end items with novelty features that imitate human-style products. Luxury pet products such as elevated beds equipped with heated blankets, and fashionable sunglasses and rain boots will be increasingly popular items.
•  Companies will invest more money in R&D as the availability of original designs gains importance in an increasingly competitive market. The use of protective patents will also rise. Most makers will focus on improving product appearance, function and safety.

Chews, toys, collars, leashes, beds, mats, clothing and kennels dominate China’s pet product exports, and are also the scope of this report.

Coverage of each category includes a Products & Prices section that describes the main materials used and other significant factors that determine price and quality, as well as a Manufacturing section that details the start-to-finish steps makers perform.

The Industry Overview analyzes the supplier base, differentiating companies and highlighting important market conditions and issues.

The majority of China’s pet product companies are privately owned operations that focus on exports. Reflecting this structure, 61 of the 78 suppliers included in this report are mainland-owned, while 50 have direct exporting capability.

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