Taffee is the first milk tea made for pets to be sold in China. Lanxi Huang, an authentic “post-95s girl” born in Xi’an, founded the brand in 2018 after graduating from college in Australia.

Huang said that, while studying overseas, she grew accustomed to ordering milk tea after coming home from work late at night since the high sugar content cheered her up. However, her dog, named Taifei, having kept her company through the years, could only watch her enjoy the tea but could not consume a beverage made for humans. Then it struck her that pets could have their own kind of milk tea.

“I had a strong sense of mission pushing me to make a special type of pet drink to bring happiness to my dog,” said Lanxi Huang.

In China, no drinks for household pets were on the market, so Huang was a pioneer in creating her brand. She combined the trendy concept of milk tea with pet food in an innovative way. At first, curiosity drew pet owners to Taffee.

Compared with such brands of milk tea as Miocha and Wocha—designed for humans—the ingredients in Taffee are similar, with nutrition in the form of goat milk powder mixed with water.

There were already some products on the market designed to render pets’ dry food more palatable and entice finicky pets—mainly cats—to drink more water or ordinary milk. However, Taffee is intended, not to meet pets’ physiological needs, but to be a fun bonding experience for pets and their owners.

In Huang’s words, “What we hope to achieve is to create a sense of happiness and cater to the emotional needs of pets.”

The popularity of Taffee proves that Huang has her finger on the pulse of contemporary social trends in China. Herself a member of Generation Z (born between 1995 and 2015), she knows that young people today are no longer satisfied with ordinary products but are attracted to those with clever packaging and distinctive characteristics. Generation Z pet owners, she realized, buy pet snacks not only as treats for their animal companions but also as objects endowed with a social meaning that can be disseminated through social media.

Although the members of Generation Z are gradually exerting ever more purchasing power in the pet food products market, they currently make up only a small proportion of China’s pet owners (5.6% according to a recent study). Members of the Post-80s generation remain the largest bloc of consumers of pet food products and are also more inclined to consider cost over packaging when making purchases.

According to Huang, the pet food market is becoming increasingly diversified and differentiated in China. These circumstances, as she saw it, were creating opportunities for domestic brands to market innovative products designed to capitalize on the latest social trends and respond to the attitudes of Chinese young people.

In 2019, pet food accounted for 61.4% of the overall consumption structure in the Chinese pet industry, far more than other categories of pet products, including medicines and beauty care. Among the various food subcategories, pet snacks and drinks accounted for 31.1% of consumption, while staple food accounted for 67.7%, suggesting that most of the economic potential for domestic pet products is in this segment of the market.

Joyzone is an example of a domestic brand offering high-quality pet staple food. Tara Zhang, the company’s founder and CEO, started her business only two months ago, after resigning from a position with Zhen Fund.

Zhang spoke of the difficulties involved with producing innovative and distinctive products in the pet staple food market. Unlike niche areas of the market such as pet drinks, pet staple food is already a mature and stable product with well-established manufacturing processes and international standards. Therefore, instead of following social trends, which are usually ephemeral, she preferred to put her efforts into guaranteeing the high quality of every single batch of Joyzone’s pet food.

However, when it comes to this segment of the market, pet owners in China tend to place their trust in imported products.

Huilin Zhou is a fourth-year student at Hong Kong Baptist University who unexpectedly adopted a cat in Wuhan Province last year.

“Nowadays, the products for cats are much more advanced and expensive than they used to be,” she observed.

When choosing what her cat ate and drank, she said, she paid close attention to the nutrition and ingredients contained in various products. After listening to suggestions from people with considerable feline experience and comparing several brands herself, she decided to buy the most expensive imported pet staple food available in China, priced at around 520RMB per bag.

In fact, during the “Double 11” e-commerce event in 2019, the most popular imported product was cat staple food. Among the five most popular imported brands, PETCUREAN GO! and Orijaen, both Canadian companies, ranked third and fourth, respectively. As statistics from Huaon suggest, pet owners in China’s first- and second-tier cities in particular prefer imported cat food over domestic brands.

From the beginning of 2015 to April 2020, 1,031 SKUs (stock-keeping units) of imported pet foods were newly registered or renewed by China’s Ministry of Agriculture. In the first quarter of 2020, the number of foreign pet companies registered with the minister reached a monthly high of 315 SKUs. These statistics reflect the increasingly fierce competition between imported and domestic brands in this market sector.

Most domestic Chinese pet food brands have positioned themselves to cater to the middle- and low-end consumer market so that their profits are dependent on minimizing production costs, which means using inferior ingredients and loosening quality control standards. As a consequence, consumers have come to distrust the safety of domestic pet food, and imported brands have dominated the Chinese market.

Zhang of Joyzone also asserted that misleading marketing strategies were duping consumers into accepting unscientific notions about pet care. In order to cater to some consumers’ demands for products that enhance the appearance of their pets, for instance, some domestic companies even claimed that their food could make pets have more flesh on cheeks, though products with this function may harm the health of pets.

Despite Chinese consumers’ faith in imported pet food, these products may show unevenness in quality from batch to batch. Zhang mentioned that a friend whose pet developed a kidney ailment after being fed one imported pet food brand during the pandemic had inspired her to start her own staple food brand.

“I understand that the supply chain in China is already mature enough,” she said. “However, domestic consumers need to be educated in order to be more receptive to domestic brands.”

To enhance the regulation of China’s fast-growing pet food market, the Ministry of Agriculture announced in September 2019 a new policy, the Pet Feed Management Measure. Previously, there had been no specific rules governing the manufacture and distribution of pet food, a lack that was in part responsible for the quality issues with domestic brands.

“I believe that, with the introduction of more regulations and rules, the industry will gradually trend towards production specialization and market standardization,” Zhang concluded, “I also expect domestic pet food products to surpass imported ones in the future.”