The rapid growth of the pet economy has given rise to numerous specialized pet product manufacturers. Yuanfei Pet, a company that started with pet leashes, has drawn industry attention with its first quarterly report since going public. How has this company established itself in a competitive market, and how will it leverage capital markets for further growth?
Financial Performance: Revenue Pressure but Improved Profitability
Yuanfei Pet's recent financial report shows that in the first three quarters of this year, the company achieved revenue of 784 million yuan (approximately $110 million), representing a 6.10% year-on-year decrease. However, net profit attributable to shareholders reached 138 million yuan ($19.4 million), marking a 21.11% increase. Notably, cash flow from operations surged 390.07% to 81.78 million yuan ($11.5 million).
In Q1 2023, the company maintained strong growth with revenue reaching 350 million yuan ($49.2 million), up 40.36% year-on-year, and net profit growing 69.13% to 58.17 million yuan ($8.2 million). However, growth momentum slowed significantly in subsequent quarters.
Market Analysis: Global Pet Products Show Strong Potential
Despite revenue challenges, the global pet products market remains promising. The market size grew from $26.4 billion in 2010 to $40.2 billion in 2020, with a compound annual growth rate of 4.29%.
The United States dominates as the largest market, with 68% household pet penetration and an average of 1.46 pets per household. In 2020, the U.S. pet product market reached $20.5 billion, accounting for 50.95% of global sales. European markets followed with $9.5 billion in sales (23.58% global share), projected to grow steadily at 5% annually.
Changing pet ownership demographics and attitudes, particularly among younger owners who increasingly view pets as family members, are driving demand for premium products like harnesses, clothing, and holiday gifts—trends that mirror human fashion consumption patterns.
Competitive Landscape: Fragmented Market with Emerging Chinese Players
The global pet products market remains fragmented, dominated by international brands like Central Garden & Pet (3.8% market share) and Germany's Bayer (3.5% in pet care). While Chinese manufacturers traditionally focused on OEM/ODM production, the maturation of cross-border e-commerce channels and capital investment are enabling more Chinese companies to build competitive advantages in international markets.
Yuanfei Pet: Specialization as Competitive Advantage
Founded in 2004 and headquartered in Pingyang County, Zhejiang Province, Yuanfei Pet operates six wholly-owned subsidiaries, one controlling subsidiary, and two branch offices. The company specializes in pet leashes, snacks, and injection-molded toys.
Pet leashes—including leads, harnesses, collars, and accessories made from nylon, leather, and PU materials—represent the company's core business, accounting for 60% of total revenue (613 million yuan/$86.2 million in 2021). The company sold 3.87 million leash products last year alone.
Yuanfei has invested significantly in product and enterprise certifications to build competitive barriers. Its distinctive pet snacks and eco-friendly, durable toys complement the product portfolio.
Market Strategy: Export Focus with Brand Development
Yuanfei primarily serves export markets, supplying major retailers including Petco, PetSmart, Pets at Home, Walmart, Target, and B&M. Through subsidiary BA in the U.S., the company is developing direct-to-consumer e-commerce sales via Amazon and Shopify, though this remains a small portion of business.
Over the past three years, PetSmart, PetCo, and Walmart have consistently ranked among Yuanfei's top five customers.
Global Operations: Integrated R&D, Manufacturing, and Sales
The company maintains research teams in the U.S. and Shanghai, with marketing operations handled by subsidiaries in America, Shanghai, and Hong Kong. Production bases in Pingyang County (China's "Pet Product Export Base" known for leather processing) and Cambodia (through subsidiary Cambodia Aito) leverage regional advantages in materials and labor costs.
Notably, listed pet company Zhong Pet holds shares in Cambodia Aito, with both parties avoiding competition by having their respective overseas subsidiaries serve as exclusive distributors.
Future Outlook: Public Listing Fuels Growth
Yuanfei's revenue grew at a 44.09% CAGR over three years, reaching 1.07 billion yuan ($150 million) in 2022. Its Shenzhen Stock Exchange listing raised 409 million yuan ($57.5 million) to expand production capacity—including 3,000 tons of chew toys and 25 million leashes annually—potentially strengthening product and supply chain competitiveness.
The company's trajectory demonstrates how specialization in high-demand pet product categories can create substantial business value. For cross-border e-commerce operators, continuous product development and vertical market expertise may establish formidable competitive advantages, even without public listing.