China pet food market Report Interpretation

Overview

This monthly tracker reviews China pet-food demand, channel and brand performance, Douyin operating indicators, overseas export demand and input costs. Goldman Sachs finds that July online demand accelerated, but views margin conditions as constrained by domestic competition and overseas tariff, foreign-exchange and raw-material pressures.

Core views

China pet-food online GMV accelerated to 12% year-on-year in July from 6% in 2Q26. The improvement was led by Douyin, up 42% year-on-year, and Tmall, up 12%, whereas JD declined 24%. Category data for Tmall/Taobao also showed a broad July recovery: cat treats grew 6.1%, dog treats 7.5%, cat staple food 13.3%, dog staple food 14.1%, and total pet food 11.9%. Goldman Sachs uses the monthly read to monitor underlying domestic demand, product and channel mix, average selling price direction, and competitive dynamics. Brand performance remained uneven. Other local brands grew 26% year-on-year online on a simple-average basis, compared with 9% for global brands. China Pet Foods grew 22%, driven by Wanpy at 31% and Zeal at 26%, while Toptrees grew 10%. Gambol grew 1%; Myfoodie was down 2% and Fregate down 25%, although Balance Nutrition grew 171%. Petpal's Meatyway fell 5%, with Tmall/Taobao up 19% but Douyin down 21%. The report nonetheless notes continued Douyin consolidation: the top 10 brands grew at a high-50s percentage rate in July versus around 30% for the top 300. It also identifies July share gains for Petpal and China Pet Foods versus 2Q26. Douyin indicators suggest changing promotional and traffic conditions. In-house and KOL GMV performed more strongly in July than in 2Q26, with a shift toward KOL activity. Rosy Fresh and Royal Canin led year-on-year flagship-account fan additions. However, sales per fan trended lower for most selected brands versus 2Q26, while Honest Bite had the strongest purchase frequency. Non-livestreaming sales mix increased for most brands, adding context on how brands are balancing livestreaming, video and e-shelf sales. Overseas demand improved but does not remove earnings risks. Total US dog- and cat-food imports grew 7% year-on-year in June, while imports via China grew 33%, compared with 4% and 50%, respectively, in May; this was consistent with Petpal management's reported recovery in orders. July raw-material costs declined 2-3% month-on-month for the covered names, helped by lower chicken and duck prices, but PET prices were still 23% above the 2025 average. The report also flags likely FX losses for pet OEMs from RMB appreciation, despite a stable FX trend into July. For China Pet Foods, Goldman Sachs acknowledges rising domestic momentum and a strong global supply chain that it expects to support wallet-share gains, but expects domestic profitability pressure from more intense competition and overseas pressure from tariff sharing, FX losses and raw-material headwinds. It remains Neutral, with a Rmb29 12-month target based on SOTP. Gambol retains a leading China position but is also Neutral, with a Rmb44.3 12-month SOTP target. Petpal remains Sell-rated, with a Rmb12.7 12-month SOTP target, reflecting domestic and overseas profitability pressure, weaker bargaining power, fierce competition in premium-priced cat food, and valuation concerns.

Analysis framework

Goldman Sachs combines monthly platform GMV and market-share tracking across Tmall, Taobao, Douyin and JD with brand-level channel data, Douyin fan and sales-efficiency indicators, US import data, and a proprietary raw-material cost index. It then links demand, mix, competition, export conditions, input costs and FX to company-level earnings and SOTP valuation views.

Methodology notes

• Industry AnalysisSupply-demand framework

  Monthly demand, channel, competitive and overseas-import tracker

  The report tracks platform GMV, brand growth, market share, import demand and input costs to assess demand momentum and competitive conditions across China pet food.

• Valuation methodsSOTP (Sum-of-the-Parts) Valuation

  Separate domestic and overseas business valuation

  Goldman Sachs values each covered company by applying separate P/E multiples to domestic and overseas earnings, discounting the domestic valuation back to 2026 using cost of equity where stated.

Asset mapping & comparison

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

• China Pet Foods (002891.SZ)

  Covered company; domestic momentum and global supply chain are expected to support wallet-share gains.

  Strengths

  Rising domestic momentum; Wanpy and Zeal delivered 31% and 26% year-on-year growth; strong global supply chain.

  Weaknesses

  The report expects domestic profit pressure from heightened competition and overseas pressure from tariff sharing, FX losses and raw-material headwinds.

  Comparison

  China Pet Foods grew 22% year-on-year online in July, ahead of global brands' 9% simple-average growth.

  Risks

  Faster or slower domestic revenue growth, food-safety issues, FX fluctuations, and freight and raw-material costs.

• Gambol Pet Group (301498.SZ)

  Covered company; maintains a leading position in China.

  Strengths

  Leading China position; Balance Nutrition grew 171% year-on-year in July.

  Weaknesses

  Overall online growth was only 1%, with Myfoodie down 2% and Fregate down 25%.

  Comparison

  Gambol lagged China Pet Foods' 22% July online growth.

  Risks

  Exchange rates, freight and input prices, online-channel competition, and execution of domestic brand building and channel expansion.

• Petpal Pet Nutrition Technology (300673.SZ)

  Covered company; Goldman Sachs remains Sell-rated.

  Strengths

  US import recovery echoed the order recovery reported by management; Petpal gained market share versus 2Q26.

  Weaknesses

  Meatyway declined 5% year-on-year and Douyin declined 21%; the report cites weaker bargaining power and domestic and overseas profitability pressure.

  Comparison

  Petpal's July brand performance trailed the accelerating other-local-brand cohort.

  Risks

  Competition in overseas business, order changes and receivables collection from large clients, domestic brand and channel execution, and US tariff changes.

Key data

• Online pet-food GMV growth12% yoy in Jul 2026Accelerated from 6% yoy in 2Q26.
• Platform growthDouyin 42% yoy; Tmall 12% yoy; JD -24% yoyJuly pet-food GMV performance by platform.
• China Pet Foods online growth22% yoyWanpy grew 31%, Zeal 26%, and Toptrees 10%.
• Gambol online growth1% yoyMyfoodie fell 2% and Fregate fell 25%, while Balance Nutrition grew 171%.
• Petpal Meatyway online growth-5% yoyTmall/Taobao rose 19% while Douyin declined 21%.
• US importsTotal imports +7% yoy; imports via China +33% yoy in JunCompared with +4% and +50%, respectively, in May.
• Raw-material cost index-2% to -3% MoM in JulPET prices remained 23% above the 2025 average.

Impact & implications

The report views July as evidence of improving online demand and continued concentration among leading Douyin brands. Yet stronger sales do not translate directly into a more positive sector stance because domestic competition, tariff sharing, RMB appreciation and elevated PET costs may continue to constrain margins, especially for export-oriented OEMs.

Risks

• China Pet Foods faces risks from domestic revenue growth outcomes, food-safety issues, FX fluctuations, and freight and raw-material costs.
• Gambol is exposed to changes in exchange rates, freight and input prices, online competition, and domestic brand and channel execution.
• Petpal faces risks around overseas competition, large-client orders and receivables collection, domestic brand-building execution, channel expansion, and US tariff changes.

What to watch

• Domestic online GMV growth and platform divergence across Douyin, Tmall/Taobao and JD.
• Brand-level market-share changes and whether Douyin consolidation continues.
• Douyin in-house versus KOL mix, fan additions, sales per fan and non-livestreaming sales mix.
• US import demand via China, raw-material costs, PET prices, RMB movements and tariff conditions.