The pet economy (also called the pet industry or pet consumption market) is the collection of commercial activity built around companion animals, most often dogs and cats. It covers food and treats, veterinary care and medicines, supplies, grooming, boarding, insurance, and a growing set of digital and technology products. Economists and trade bodies use it as a lens on household consumption, because spending on pets tends to be resilient even when other discretionary purchases fall. Its size, however, depends heavily on how each source defines the sector, so figures from different countries and organizations are not directly comparable.
Scope and definitions
There is no single accepted boundary for the pet economy. Narrow definitions count only spending on animals and their direct needs, such as food and veterinary services. Broad definitions add pet-related manufacturing, retail, e-commerce, and services. In the United States, the trade association APPA tracks total pet expenditure across several categories. In China, research reports often measure the "urban dog and cat consumer market," which excludes rural areas and some other animals. The gap between these approaches explains much of the variation in published numbers discussed below.
Market size
United States
The American Pet Products Association (APPA) reported that pet industry expenditures reached $158 billion in 2025 (+3.7%) and are projected to reach $165 billion in 2026. Spending is divided into broad groups. Food and treats sales rose 3% year-over-year (YoY), reaching sales of $68.3 billion (€60B) in 2025. Veterinary care accounted for $41 billion, while supplies, medications and live animals, despite representing a smaller portion of total spending (21.8%), experienced faster growth: they hit $34.4 billion in 2025. Services such as grooming and insurance were $14.3 billion (€12B) in sales and the largest YoY growth at 8%.
Household ownership has also expanded. Ownership expanded from 51% of U.S. households in 2024 to 53% in 2025 (71 million U.S. households), translating to about 4 million additional dog-owning households year over year.
China
Chinese estimates are more varied. A 2026 white paper put the consumption market for urban dogs and cats at a specific level: the number of pet dogs and cats in China's urban areas reached 126 million in 2025, driving the pet consumption market to 312.6 billion yuan (about 45.4 billion U.S. dollars). The same source projects that the market is expected to expand further to 405 billion yuan by 2028. Other analyses use a higher base. One research report states that China's pet economy surpassed RMB 350 billion in 2025, ranking second globally. A broader measure is larger again: a KPMG report presented at the China International Import Expo projected that the market size of China's pet-related sector is expected to exceed 811.4 billion yuan ($114 billion) this year.
China's pet economy grew from a smaller base. One analysis notes that the urban dog and cat market reached RMB 300.2 billion in 2024 (first time breaking the RMB 300 billion threshold), which indicates how quickly the sector expanded in only a few years.
Structure and segments
Food
Pet food is the largest single segment in most markets. In China, pet food is the largest single category in the entire pet economy, reaching RMB 158.5 billion in market size in 2024, accounting for approximately 53% of the urban dog and cat consumer market. Premium product types have attracted particular attention, including freeze-dried meals, fresh food, and baked food. Domestic brands have also gained ground against imported products; one report says that domestic pet food brands overtook imported giants on e-commerce GMV for the first time.
Healthcare
Veterinary services, medicines, vaccines and nutritional supplements form the second major pillar in many markets. In China, pet healthcare (RMB 84.1 billion) was reported as one of the three main pillars alongside food and supplies, based on 2024 data. Functional products such as probiotics and prescription diets are growing faster than the market average in some analyses.
Supplies, services and insurance
Supplies include beds, toys, leashes, litter and accessories. Services include grooming, boarding, daycare, training, and pet hospitals. Pet insurance has grown as a product category, although its penetration varies widely between countries. These segments are typically more fragmented than food, with many small local providers alongside larger chains.
Digital and new technology products
E-commerce is now central to pet retail, and many firms sell through online platforms and social media. A growing range of "smart" pet products, including connected feeders, litter boxes and cameras, is also emerging, and cross-border export of pet products from Asian manufacturers is an expanding part of the sector.
Drivers
Several factors support growth in the pet economy:
- Ownership growth. Rising pet ownership, especially among younger adults, expands the base of consumers. In the US, one APPA summary notes that growth is led by Gen Z, Millennials, and Gen X, while spending is becoming more value-oriented.
- Humanization of pets. Owners increasingly treat pets as family members, which supports spending on premium food, healthcare and services. This trend is often described as pet humanization, and it is cited in most market analyses of premium products.
- Smaller households. Pets can serve as companions in single-person and childless households, which are increasingly common in urban areas. Demographic change therefore links the pet economy to urbanization and to broader household patterns.
- E-commerce and logistics. Online retail makes it easier to buy specialized products and subscriptions.
- Income growth. Discretionary income supports trading up to higher-priced products, although the effect is cyclical. Spending decisions also respond to inflation and unemployment.
Economic and labor effects
The pet economy generates employment in manufacturing, retail, veterinary medicine, grooming, and logistics. Because pet food and healthcare demand is relatively stable, the sector has been treated as less cyclical than many consumer categories. Even so, it is not immune to macroeconomic pressure. In the US, in 2025, 22% of owners said they reduced spending on their pets, a 10% increase from 2024. Industry analysts describe this as a shift toward value-seeking rather than an exit from pet ownership. Many owners continue to buy pet food and basic care while cutting discretionary items.
Pet economies also interact with international-trade-style supply chains, since much of the world's pet product manufacturing is concentrated in a few exporting countries. Export growth from China is a particular focus of recent industry reports.
Regulation and standards
Governments regulate the pet economy through food safety, drug approval, veterinary licensing, animal welfare, and consumer protection rules. In China, new regulations for prescription pet food and freeze-dried pet food took effect on May 1, 2026, and they are intended to improve labeling practices and stricter raw material standards. Similar issues, such as misleading labeling and product safety, arise in most national markets.
Limitations and debates
Inconsistent statistics. The main difficulty for anyone studying the pet economy is comparability. The US trade body reports a count of 95 million pet-owning U.S. households, which is well above the figure in the American Veterinary Medical Association's own sourcebook. Differences in household counts, survey methods, product scope and currency conversion all affect headline totals. Chinese figures vary across white papers, consultancy reports and government-linked publications, and many are forecasts rather than measured outcomes.
Animal welfare. Critics argue that rapid market growth can encourage impulse purchases, commercial breeding, and abandonment. Shelter intake is one measure of these pressures. In the US, 5.8M dogs and cats entered shelters, according to a 2026 compilation of pet statistics. Whether spending growth improves or undermines welfare is a contested question.
Affordability and access. Veterinary costs have risen in many countries and can be a barrier to care. Debates over pet insurance, public subsidies for spay and neuter programs, and access to low-cost clinics reflect these concerns.
Environmental impact. Pet food production, especially of meat-based products, has an environmental footprint. Researchers have examined the carbon and land use associated with feeding dogs and cats, and some analysts argue this should be part of the sector's policy discussion alongside climate-change and sustainable-development.
Definitional debate. Some researchers question whether the term "economy" is appropriate for a sector that mixes consumer goods with health and welfare services. Others argue that the framing is useful because it captures the scale of a relatively new consumer market.
References
- APPA Report: US Pet Industry Reaches $158B in 2025, Poised for Continued Growth in 2026 - Pet Agepetage.com
- $158B: US pet industry maintains steady growth through 2025 - GlobalPETSglobalpetindustry.com
- By the Numbers: U.S. Pet Industry Reaches $158 Billion, Growth Expected to Continue in 2026vet-advantage.com
- China's pet economy opens up new consumption scenariosenglish.scio.gov.cn
- 2026 China Pet Food & Products Deep Research Report: Domestic Brands Surging, Fresh Food Upgrading, and Cross-Border Expansion — Tianxia Gongchang Researchfaxiangongchang.com
- Food key as pet sector sees robust growth - Chinadaily.com.cnchinadaily.com.cn
- US pet food industry returned to ‘real growth’ in 2025petfoodindustry.com
- China Pet Nutraceuticals Market Size, Share & 2031 Growth Trends Reportmordorintelligence.com
- Pet Statistics 2026: Ownership, Spending, Sheltersmarketintelligencetools.com