"This product has been sold for 70 yuan or 80 yuan once, and consumers will only accept this price later." On April 28, at the activity site of the 2026 Global Pet Industry Internet Conference in Hangzhou, a staff member of a pet listed company explained to reporters the price pressure of the domestic pet market. He said that platform promotions, influencer live streaming, and channel subsidies continue to lower transaction prices. Once the low prices are remembered by consumers, it will become difficult for brands to restore their daily sales prices.

The agenda of the conference on that day involved multiple hot tracks in the future of the pet industry. Participants believed that there was room for imagination in tiered feeding, scientific pet care, AI diagnosis, and intelligent hardware for pet scenarios. However, they were also facing real pressures such as increased traffic, price competition, cautious promotion of new products, and profit pressure.

The financial reports of pet listed companies that have been intensively disclosed in the past 15 days also confirm this point. By 2025, out of the 7 pet related listed companies in China, 3 have experienced an increase in revenue without increasing profits. By the first quarter of 2026, this number will increase to 6; If we add Yiyi Shares (001206. SZ), which has experienced a decline in both revenue and net profit, all seven listed companies saw a year-on-year decline in net profit in the first quarter.

A common situation mentioned by practitioners is that the previous methods of relying on traffic, explosive products, and cost-effectiveness to quickly achieve large-scale production are failing. What companies are thinking about now is how to do a good job in their own brand and put effort into category segmentation and channel operation.

Increasing income without increasing profits

Pet food is the largest segmented market in the pet industry. The "2026 Chinese Pet Industry White Paper" jointly guided and released by the National Companion Animal (Pet) Standardization Technical Committee, the Pet Industry Branch of the China Animal Husbandry Association, and other units shows that by 2025, the food market will account for 53.7% of the urban pet dog and cat consumption market in China; Next is the medical market, accounting for 27.6%; The market shares of supplies and services are 12.2% and 6.5% respectively

According to statistics from the Economic Observer, there are currently seven main listed companies in the domestic pet food and supplies industry. Among them, Guaibao Pet (301498. SZ), Zhongchong Shares (002891. SZ), Petty Shares (300673. SZ), and Lusi Shares (920419. BJ) focus on the pet food track; Yuanfei Pet (001222. SZ) covers pet supplies and pet food; Tianyuan Pet (301335. SZ) specializes in a full range of pet supplies including bedding, toys, and clothing; Yiyi Co., Ltd. (001206. SZ) specializes in pet hygiene and care products.

According to the latest disclosed financial report, the revenue of pet listed companies continues to grow. In the first quarter of 2026, Zhongchong Group achieved a revenue of 1.533 billion yuan, a year-on-year increase of 39.23%, setting a new high for single quarter revenue; Yuanfei Pet achieved a revenue of 450 million yuan, a year-on-year increase of 34.36%, continuing the trend of revenue growth exceeding 30% in 2025. In addition, Guaibao Pet, Lu Si Shares, and Tianyuan Pet have also continued their revenue growth trend in 2025.

But the increase in revenue did not drive profit growth. In the first quarter of this year, the net profits of the seven companies mentioned above all declined year-on-year. From the perspective of year-on-year growth in operating revenue and year-on-year decline in net profit attributable to shareholders, companies such as Zhongchong Co., Ltd., Luosi Co., Ltd., and Yuanfei Pet have already experienced an increase in revenue but no increase in profit by 2025; By the first quarter of 2026, the phenomenon of increasing revenue without increasing profits will expand to six companies, including Guaibao Pet, Petty Co., Ltd., and Tianyuan Pet. Yiyi Shares experienced a double decrease in revenue and net profit.

There are three common factors mentioned by several leading pet companies regarding the collective increase in revenue without profit growth: firstly, the investment in sales expenses. In order to maintain revenue growth and market share, companies continue to burn money on influencer advertising, platform promotion, and sales services, with sales expenses often growing faster than revenue growth; Secondly, several domestic pet listed companies are involved in overseas export business and are significantly affected by trade policies and exchange rate fluctuations; The third is the phased investment brought about by the adjustment of product structure. Top enterprises generally believe that the current period is a window for domestic pet brands to increase their market share, so they are willing to bear short-term profit fluctuations and increase investment in independent brands, high-end products, and production capacity construction.

The employee of the aforementioned pet listed company said that in the early days, pet listed companies mostly started from export and foreign trade business, and overseas business has long been based on order logic. "Customers place as many orders as they want, they produce as many goods as they want. With the development of the domestic market, factories need to shift their business focus to their own brands, rebuild domestic consumer awareness, and increase corresponding investment.

Hu Weibo, founder of Chenrui Capital, stated in an interview with the Economic Observer that when capital looks at the development of pet brands in the domestic market, it not only looks at GMV (Gross Merchandise Volume), but also at "quality GMV", including repurchase, spontaneous search, user retention, channel capability, etc. In the past, some pet brands did not have strong product strength, but hoped to use capital to quickly drive traffic, buy users, and buy growth, which led to lagging product, supply chain, and omnichannel operation capabilities.

Faced with the situation of lower than expected profit growth, Guibao Pet, the largest revenue player in the pet industry, admitted in a letter to shareholders on April 23 that while profit is an important indicator of enterprise development, short-term profits need to be compromised by the industry's development stage and the long-term value creation of the enterprise.

Where to find growth

Although net profit is under pressure, companies still have a positive outlook on the future of the pet industry.

Multiple financial reports have mentioned that the Chinese pet market is still in its early stages, and there is still room for top brands to increase their market share. Compared to overseas markets, Guaibao Pet found that the top five pet food companies in the United States have a market share of 66%, while in China it is only 25%. This means that there is still room for industry integration and concentration of top brands. Guibao Pet mentioned that the trend towards high-end products and the concentration of top brands is an irreversible industry trend, and this strategic opportunity window is unique and cannot be replicated.

Building their own brand is a frequently mentioned growth direction for various enterprises. Guibao Pet regards "prioritizing the market share of its own brand" as its core strategy. The company's revenue from its own brand reached nearly 5 billion yuan last year, accounting for 73.35% of the company's revenue by 2025, up from about 63.4% when it went public in 2023. Guibao Pet is known as the "core engine of the company's development". Zhongchong Group also clearly regards "independent brand building" as the core of its strategic planning. Petty Corporation, which focuses on overseas business, is also promoting the development and promotion of its own brand in the domestic market.

Another clear growth path is to increase the proportion of high repurchase staple food categories. Compared to pet snacks, staple foods have more daily necessities, higher repurchase frequency, and are easier to form stable user relationships. Zhongchong Group's main food revenue in 2025 is 1.553 billion yuan, a year-on-year increase of 40.39%, higher than the 7.94% growth rate of pet snacks; Guaibao Pet's main food revenue in 2025 increased by 53.79% year-on-year, accounting for 61.13% of the total revenue; Lu Si Stock also mentioned in its annual report that the sales growth in the domestic market is mainly due to the good growth of 25.31% in its main grain products.

Category refinement is also a way for pet companies to find incremental growth. It is difficult for pet food to rely solely on rough categories such as "cat food" and "dog food" for competition. The segmented categories have expanded to include young pet food, elderly pet food, gastrointestinal sensitive food, urinary health food, freeze-dried food, wet food, prescription related nutritional products, etc.

Zhao Kun, Chief Analyst of iResearch Consulting, believes that over 70% of pet owners have begun to recognize and accept the 6-stage cat and dog life stage classification standards (different physiological stages such as weaning, infancy, maturity, and advanced age), and the proportion of strict implementation of staged feeding is 45.1%. Some pet food companies have developed products targeting specific needs such as gastrointestinal sensitivity, oral care, joint health, and weight management. For example, the small molecule anti allergy prescription food developed by Guaibao and the immune enhancement products researched by Petty.

Another growth direction is the linkage of online and offline channels. In the past few years, methods such as live streaming, influencer seeding, platform promotions, and popular products have been able to quickly scale up sales. But now, relying solely on online investment is no longer sufficient to support long-term growth. Hu Weibo told reporters that it is difficult to continue the explosive growth of individual products. Nowadays, brand investment should focus on products, marketing, and channels. "In the past, many brands only bought traffic online, but now they need to be able to do both online and offline. New retail channels, private domains, etc. have become the homework that enterprises need to make up for.

Multiple financial reports have mentioned that offline channels such as pet stores, supermarkets, membership stores, pet hospitals, and instant retail may become new entry points for brands to reach users. For pet food brands, offline not only serves the sales function, but also the functions of experience, recommendation, and trust building.