China's pet market has indicated strong growth momentum, driven by a growing number of younger, highly educated pet owners who prioritize both cost-effectiveness and product functionality, a new report said.

The report released by KPMG at the just-concluded eighth China International Import Expo in Shanghai shows that the market size of China's pet-related sector is expected to exceed 811.4 billion yuan ($114 billion) this year. As a rigid-demand category, pet food holds the largest market share in the sector and acts as the core driving force behind the pet economy.

At this year's CIIE, a pet-themed exhibition area was established on-site for the first time, reflecting Chinese consumers' pursuit of high-quality and diversified lifestyles.

The evolving role of pets — from "functional companions "to "family members" — has fueled the robust growth of segmented sectors including food, medical care, services and technology.

Chinese pet owners born in the 1990s or later account for more than 60 percent of the total. Young consumers are more inclined to purchase pet products via e-commerce platforms, particularly through livestreaming sessions, and their spending decisions have become increasingly sophisticated and rational, the report found.

"The development of the pet economy is closely tied to residents' consumption levels. As consumers' material needs are satisfied, their spiritual demands grow correspondingly," said Jiang Liqin, head of clients and markets for KPMG China.

"Meanwhile, shifts in consumer demand and scenarios will drive deeper adjustments on the supply side," Jiang added.

For instance, as hotels continue to adapt to emerging consumption demands, more pet-friendly hotels and public transportation options have emerged in the market, the report said.

Luxury hotels stand out in pet-friendly services, providing high-end amenities such as pet spas, grooming services, and private pet concierge services to deliver a comprehensive pet-friendly travel experience.

Among the hotels featured in the 2024 "must-stay" lists of two popular e-commerce platforms, Meituan and Dazhongdianping, the number of pet-friendly hotels jumped nearly 20 percent year-on-year, reflecting the strong growth momentum of this niche market.

Early last year, a Hilton hotel in Shanghai's Fengxian district launched pet-friendly rooms. The hotel equips guest rooms with dedicated pet supplies and food, and also organizes pet birthday events to deliver a unique experience for travelers accompanied by their pets.

During holidays, the occupancy rate of these pet-friendly rooms exceeds 80 percent, making them highly popular among pet owners. The Hilton hotel also launched services like outdoor dining for pets and pet-photo sessions, which cater to the emotional needs of pet owners, according to the hotel.

Domestic hotel chain Atour launched pet-friendly services in Shanghai in 2023 and quickly expanded them nationwide.

These rooms are equipped with multi-functional pet cabinets — integrating water bowls, cozy nests and climbing frames — as well as automatic feeders and other amenities. As of last year, Atour operated 19 pet-friendly hotels nationwide and plans to further extend the service scope this year.