China Pet Food Q1 Online Sales Grew, but Momentum Weakened in March; China Pet Foods Clearly Outperformed

Overview

This report tracks China’s pet food sector in Q1 2026, focusing on online sales, brand share, exports, and raw material costs. Based on Meritco data, online pet food GMV on Tmall, Douyin, and JD was up 11% year-over-year in Q1, but the growth was concentrated in January-February and slowed in March, with total industry GMV down 3% year-over-year. The report suggests sector demand remains resilient, but divergence across platforms, categories, and companies has widened.

Core views

Core views include: first, Douyin and JD delivered year-over-year growth of 20% and 19% respectively in Q1, significantly outpacing Tmall’s 3%; second, in March only Douyin maintained positive growth, indicating that content e-commerce remains the strongest channel of incremental demand; third, cat dry food was the strongest performing segment and the most resilient category within pet food; fourth, China Pet Foods clearly outperformed peers with Wanpy and Toptrees growth, while Petpal’s core brand Meatyway remained under pressure; fifth, export recovery and weak U.S. demand coexist, and with rising corn and beef prices, cost pressure remains a key risk to monitor.

Analysis framework

The report primarily uses online-channel GMV tracking, brand share comparison, company brand-level performance decomposition, export data monitoring, and raw material cost tracking to assess sector momentum and relative company performance, and combines these with a DCF approach to value covered companies.

Methodology notes

• Sales TrackingMeritco online GMV tracking

  Assesses pet food sector demand, platform performance, and category resilience by tracking year-over-year changes in online GMV on Tmall, Douyin, and JD.

  This method is useful for observing short-term sales momentum and platform divergence, but it does not fully represent offline channels or total omnichannel sales.

• Competitive LandscapeBrand Market Share Analysis

  Compares online market share changes of the top 10 brands and key brands to assess brand concentration and share shifts.

  The report notes that the top-10 online share in March 2026 was 40.8%, with Royal Canin still ranking first and Wanpy and Toptrees under China Pet Foods contributing incremental share gains.

• Valuation methodsDCF Approach

  Values Gambol, China Pet Foods, and Petpal using the discounted cash flow method.

  The report clearly states that valuation of covered companies is based on DCF and aligns the investment horizon with UBS equity rating framework’s 12-month view.

• Demand and CostExport and Raw Material Cost Tracking

  Evaluates margin pressure by monitoring pet food export values, performance of exports to the U.S., and raw material price changes for corn, beef, and other inputs.

  Pet food exports rebounded year-over-year in February 2026, but U.S. exports remained weak; by March, dry-food raw material costs were up 9% year-over-year, indicating sustained cost pressure.

Asset mapping & comparison

Structured mapping from thesis to named assets (strengths, weaknesses, peers, risks).

• China Pet Foods

  Key covered company, rated Buy

  Strengths

  Online sales rose 51% year-over-year in Q1 and 14% in March; Wanpy and Toptrees gained share, producing clear outperformance versus peers.

  Weaknesses

  Zeal declined 7% year-over-year in March, partially offsetting share gains from Wanpy and Toptrees.

  Comparison

  Compared with Gambol and Petpal, China Pet Foods was the strongest performer in both Q1 and March.

  Risks

  Intense domestic competition, rising marketing spend, losses from RMB appreciation, and higher raw material costs.

• Gambol

  Covered company, rated Neutral

  Strengths

  Online sales grew 4% year-over-year in Q1, with Fregate and Myfoodie up 8% and 5%, respectively, in the quarter.

  Weaknesses

  Online sales declined 5% year-over-year in March, with Fregate and Myfoodie down 8% and 4%; market share edged lower.

  Comparison

  Weaker than China Pet Foods but stronger than Petpal’s core brand Meatyway.

  Risks

  Intensifying competition, near-term marketing spend hurting profitability, and domestic business potentially underperforming expectations.

• Petpal

  Covered company, rated Neutral

  Strengths

  No clear positive operating highlights were provided in the report.

  Weaknesses

  Core brand Meatyway sales were down 29% year-over-year in March and 20% in Q1; market share declined to 0.4%.

  Comparison

  Weakest performer among the main covered companies.

  Risks

  Declining brand sales, market-share loss, and domestic competition and cost pressure.

• Douyin Pet Food Channel

  Industry growth channel

  Strengths

  Q1 GMV grew 20% year-over-year and remained up 12% in March, making it the only platform with positive growth in March.

  Weaknesses

  Content-commerce growth can be volatile, and platform structural changes may affect brand media efficiency.

  Comparison

  Significantly outperformed Tmall and JD in March.

  Risks

  Rising traffic costs, platform policy changes, and intensified brand competition.

• Cat Dry Food Segment

  More resilient subcategory

  Strengths

  March GMV was up 1% year-over-year and Q1 was up 14% year-over-year.

  Weaknesses

  Momentum may have slowed compared with January-February.

  Comparison

  Outperformed dog dry food and cat snacks.

  Risks

  Higher costs, demand volatility, and brand-level pricing competition.

Key data

• Q1 Online Pet Food GMV on Top Three Platforms+11% YoYCovers Tmall, Douyin, and JD; strong in January-February, then eased in March.
• Total GMV of Top Three Platforms in March 2026-3% YoYShort-term sector momentum weakened.
• Douyin Q1 Online GMV+20% YoYBest-performing among the three platforms.
• JD Q1 Online GMV+19% YoYStrong Q1 growth, but March declined 7% year-over-year.
• Tmall Q1 Online GMV+3% YoYModerate growth, with March down 8% year-over-year.
• Q1 Cat Dry Food GMV+14% YoYMarch remained up 1% year-over-year, indicating stronger resilience.
• Top-10 Brand Online Share40.8%Data for March 2026; brand concentration remained stable.
• Royal Canin Online Share10.38%Ranked first in March 2026, up 3.6 percentage points year-over-year.
• Gambol Q1 Online Sales+4% YoYMarch declined 5% year-over-year, with both Fregate and Myfoodie weakening.
• China Pet Foods Q1 Online Sales+51% YoYStill up 14% in March year-over-year, significantly outperforming peers.
• Wanpy Q1 Online Sales+72% YoYMarch up 34% year-over-year, contributing to China Pet Foods’ share gains.
• Petpal Core Brand Meatyway Q1 Sales-20% YoYMarch declined 29% year-over-year, remaining weaker than peers.
• China Pet Food Exports in February 2026US$251mn, +18% YoYTotal exports rebounded, but exports to the U.S. were down 36% year-over-year.
• March 2026 Pet Food Dry Food Raw Material Costs+9% YoYDriven mainly by corn up 8% and beef up 14%.

Impact & implications

For investors, the report signals that while sector growth remains, short-term volatility has increased. At the channel level, Douyin remains the most important platform to monitor for incremental growth; at the category level, cat dry food is more resilient than dog dry food and cat snacks; at the company level, China Pet Foods has relative advantage from stronger online growth and share gains, while Gambol remains modest and Petpal is still under pressure. Uncertainty from cost and external demand may affect margins and profit realization.

Risks

• Demand recovery turns out weaker or stronger than expected, changing earnings and valuation assumptions.
• Raw material cost inflation or deflation impacts gross margin.
• Competition among pet food companies intensifies, and domestic growth may fall short of expectations.
• Share gains at the expense of higher spending could deepen domestic losses or limit short-term profitability contributions.
• Further RMB appreciation could increase foreign exchange losses, especially for companies with overseas exposure.
• Changes in industry competitive dynamics and shifts in policy support intensity.
• Persistently weak exports to the U.S. could weigh on export-related businesses.

What to watch

• Whether March weakness continues into Q2, especially whether Tmall and JD recover growth.
• Whether pet food GMV on Douyin can continue to post double-digit growth.
• Whether the resilience of cat dry food versus dog dry food and cat snacks persists.
• Sales and market-share changes for China Pet Foods’ Wanpy, Toptrees, and Zeal.
• Whether Gambol’s Fregate and Myfoodie can reverse their March declines.
• Whether Petpal’s core brand Meatyway can stop falling.
• Pet food exports, especially recovery in exports to the U.S.
• Price trends for corn, beef, and other pet food raw materials.