Would you be tempted to adopt a cat for free without paying a single penny?
With summer vacation in full swing, free pet adoptions have quietly become a powerful tool for attracting customers in some shopping malls and department stores. Various breeds of cats, including popular breeds like Maine Coons, Ragdolls, and British Shorthairs, lie in their temperature-controlled pet carriers.
The seller claims to be a cattery and says that you can adopt a cat for free by signing a monthly food purchase agreement for six months to two years, and promises that the pet will be absolutely healthy.
These free pets available for adoption are tempting to countless potential pet owners, but where do these cats come from? How do these businesses, which don't make a profit, generate revenue? And why did this model emerge in the first place?
From "paying to buy a cat" to "giving away a cat for free"
In today's booming pet economy, the traditional pet store business model is quietly undergoing a transformation.
Previously, pet stores primarily sold pets, requiring customers to pay a hefty upfront fee to take their desired pet home. Subsequent pet supplies were then purchased by the customers themselves.
As the pet market becomes increasingly prosperous, new entrants flock in, making the "involution" phenomenon in the pet industry more and more prominent, and pet shop owners are having a tough time.
A cattery owner in Xi'an told reporters, "The competition in the pet market has reached a fever pitch. Whenever a pet-seeking post appears on social media, it instantly attracts hundreds or even thousands of businesses vying for a response. This oversupply situation has put unprecedented pressure on our pricing. The economic downturn has squeezed consumers' purchasing power, especially young people who have just entered the workforce and have low salaries. They have limited funds and cannot afford the high cost of buying a pet, which is one of the important reasons for our poor performance."
Pet stores are now facing a severe shortage of business and are going out of business. Faced with this situation, pet store owners are eager to adapt and find ways to increase their profits.
Pet food manufacturers are also facing difficulties, as more and more new competitors enter the market, and their market share is being gradually eroded. According to the "China's Beautiful Life Survey 2022-2023" report released by CCTV, the proportion of pet food consumption in pet spending has declined.
They urgently need to improve marketing efficiency, accurately reach users, and ideally, directly reach pet-owning families in one step.
In this context, the two industries hit it off immediately: you give away cats for free, I charge for pet food; you help me sell products, and I let you earn the price difference for long-term profits. The "free adoption + monthly pet food payment" business model was born.
Mr. Dong, born in the 1990s, is a pioneer of the "free adoption + monthly pet food payment" model in Chongqing. He told reporters, "Under this model, we have achieved diversified profits." Mr. Dong said, "We cooperate with local pet supply distributors and can get prices far lower than those of the brand's official online stores. We then sell them to people who adopt cats from us at a reasonable price. In fact, we earn the price difference in the supply chain, not the direct income from pet adoption."
To improve efficiency and reduce costs, Mr. Dong also revealed one of their key strategies: "We have adopted a no-inventory sales model. When customers place an order for pet supplies, the order information is directly transmitted to our suppliers, who then ship the goods directly to the customers, greatly reducing our inventory pressure."
The key to the profitability of pet supply stores lies in their close alliances with local pet supply distributors.
Mr. Dong further clarified that the core of the "monthly pet food payment" model is not the pet cats themselves, but the construction of the distribution channels. Most domestic cat sources are concentrated in Shenyang, so finding affordable pet sources is not a problem. The key to this model lies in acquiring traffic, which is the foundation for user accumulation and a core element for maintaining market competitiveness.
Mr. Dong bluntly stated, "Only by having substantial traffic and a stable user base can we have the confidence to negotiate prices with pet product distributors and secure more profits for ourselves."
Therefore, the business strategy is no longer to wait for customers to come to the store, but to take the initiative online.
Build a dissemination matrix through Douyin
By attracting attention with "free adoptions" and sparking the interest of pet lovers, the business successfully directed public attention to private traffic pools such as WeChat by widely disseminating adoption information on social media. Within this carefully crafted private environment, the business not only showcased itself as a professional and caring pet care expert but also regularly published rich and diverse information, including pet care knowledge, product recommendations, and genuine user feedback.
How long does it take to break even after giving away a cat?
The "free adoption + monthly pet food payment" model is essentially a highly efficient integration of resources. It breaks down the boundaries of traditional pet sales models, closely linking pet adoption, pet supply sales, and financial services to form a closed-loop ecosystem. Within this system, resources from all parties are fully utilized and optimally allocated, achieving a win-win situation.
Since it's a win-win situation for all parties, how much profit can the pet management center, which is the core of the chain, actually make?
A reporter learned from a pet factory that its "monthly payment for pet food" model has maintained a stable profit margin of 50% to 60% in the pet supplies sales sector. Even more surprisingly, the cost of even high-quality Ragdoll cats is kept extremely low, costing only a few hundred yuan.
Profit margin of pet products at a pet factory
Assuming a user chooses to pay 598 yuan per month and signs a 24-month purchase agreement, based on this profit margin, the pet store would earn far more than 300 yuan per month from the user's payment. If the cost of a Ragdoll cat is only 600 yuan, the cost can be recovered in just two months.
During the entire 24-month contract period, users will need to pay a total of 14,352 yuan. All of these funds will be used to purchase pet supplies at the pet store. Assuming a 60% profit margin and deducting the initial cost of the Ragdoll cat of 600 yuan, the net profit will far exceed 8,000 yuan.
However, Mr. Dong, the person in charge of several pet rental shops in Chongqing, gave a different account.
He pointed out that for businesses that pursue high-quality services, the cycle from introducing a cat to achieving profitability often takes six months to a year or even longer. "If it's a Devon or a cat with good breed characteristics, it takes at least seven months to break even, but the subsequent income is very stable."
He emphasized that although the cost of a Ragdoll cat may seem low, the process of bringing a cat into the store and ultimately making a profit involves more than just buying and selling cats; it requires a series of complex investments and meticulous services. Before a cat is delivered to a customer, the store must conduct rigorous health screenings, administer vaccinations, and provide necessary daily care.
The team invested significant human and material resources, including building a professional product selection team (5-6 people), a large after-sales customer service team (over 20 people), and sales personnel (up to 37 people). These human resource costs increased the company's expenses, but Mr. Dong firmly believes that this is the foundation for winning customer trust and support and building long-term brand value.
Mr. Dong stated that since 2019, his multiple stores have sent out more than 6,000 pets. These contracts adopt flexible monthly payment methods, with monthly payments ranging from 198 yuan to 598 yuan. The contract term is flexibly set according to the specific needs of customers, with a minimum of one year and a maximum of two years. Currently, there are more than 1,700 pet contracts being executed.
How else can a business grow by giving away cats for free?
While many industries are still struggling through price wars, the pet industry is still able to buck the trend and thrive.
According to the "Blue Book on the Pet Industry: 2023 China Pet Industry Development Report" released by Euromonitor International in conjunction with the Asia Pet Research Institute and other institutions, the number of dogs and cats in my country reached 190 million last year, and it is estimated that the number of dogs and cats in my country will increase to 210 million by 2028, of which the number of cats is expected to exceed 110 million due to changes in pet ownership preferences.
At the same time, the surge in the number of pets has also stimulated demand for pet supplies, especially pet food. In 2023, China's pet food industry market size jumped to third place globally.
The "free adoption + monthly pet food payment" model has indeed cleverly capitalized on a lucrative opportunity.
As one of the pioneers of the "free adoption + monthly pet food payment" model in China, Yaoshe Cat Shop offers a wide variety of pet supplies in its online store. The store provides 13 types of cat food products, 4 of which are self-created and operated brands, while the cat litter category is entirely comprised of Yaoshe Cat Shop's own self-created and operated brands.
In 2020, Yaoshe Cat Shop proposed the concept of "free cat ownership," initially implemented through collaborations with other pet supply brands. With accumulated market experience and enhanced brand strength, Yaoshe Cat Shop officially launched its self-developed products in early 2022. Within just one year of its launch, its total transaction volume exceeded 20 million yuan, signifying the establishment of an independent and complete pet supply chain system and enabling more profits and value to remain within the brand.
Meanwhile, Mr. Dong, a leading figure in Chongqing's pet retail industry, also demonstrated a similar strategic vision. Despite having fewer stores than Yaoshe Cat Store, Mr. Dong was not content with being just a middleman and decisively launched his own brand of cat food. Mr. Dong frankly stated that the initial intention behind launching his own brand was to increase profit margins. Facing the market's major cat food brands like Royal Canin, the high cost of sourcing from regional distributors limited profit margins.
This year, Yaoshe Cat House has also embedded partner pet hospitals into its mini-program and provides users with services such as grooming and bathing, which shows that it is expanding the boundaries of resource integration.
By examining the development trajectory of Yaoshe Cat House, we can foresee the future development direction of "Monthly Pet Food Payment": to actively explore independent brands through deeper and broader resource integration in order to maximize profits and retain customers.
In the future, after you adopt a cat from a pet store, that pet store may become a "one-stop" service provider for your cat's all-round life. From the cat's daily "eating, drinking, and toileting" supplies to its need for veterinary care, bathing, grooming, and even occasional boarding needs, the pet store will take care of everything for you.
However, as the "monthly payment for pet food" model has become more widespread and developed, its underlying negative issues have gradually surfaced. Issues such as delivering sick cats, requiring installment payments even after a cat's death, and inconsistent quality of pet supplies have made this model highly controversial and criticized online.
In response to criticism from netizens, pet adoption agencies are actively implementing self-regulation and improvements. For example, Yaoshe Cat Adoption Agency has taken several measures to protect the rights of adopters, including ensuring that cats are quarantined for seven days after receiving two vaccinations before being displayed at the store, promising a refund of the account balance if the pet dies of illness within two years, and providing one-on-one after-sales service through multiple groups staffed with veterinarians to answer adopters' questions and provide professional guidance. These measures undoubtedly enhance consumer confidence in the "free adoption" model and contribute to the healthy development of the industry.
Faced with the stigma surrounding the industry, Mr. Dong expressed his helplessness and感慨 (feelings of deep regret/reflection). He emphasized that while the pet market has low barriers to entry, truly succeeding requires tremendous effort and investment. He hopes to gain user recognition and trust through high-quality service and after-sales support.
Mr. Dong said, "We can't condemn the entire industry because of the actions of a few unscrupulous businesses. As long as the industry works together and strengthens supervision, pet stores will definitely usher in a healthier and more sustainable development."
