Business adjustments are normal
We plan to close all ‘Pet Fresh’ stores by mid December this year, but we will retain the online portion
In the future, starting a business again will definitely be in the retail industry that I understand, and the fresh food industry may be my strongest. The future will also be centered around product brands, and it doesn’t matter which channel to sell through
When it was revealed that multiple stores had suspended operations and would close completely, Hou Yi, founder and former CEO of Hema, responded calmly and candidly to multiple media outlets and the outside world regarding his pet fresh food new retail project, Pet Fresh.
At the beginning of this year, Pai Te Xian Sheng made a high-profile announcement to open hundreds of stores, but in less than a year, it entered a period of adjustment. The Pet Fresh project once set a record for angel round financing in the pet industry.
Tiger Sniff learned that currently Pat Fresh is indeed making business adjustments. In the Pat Xiansheng stores that the author visited on the spot, most of the products were sold at 50% discount, and the “Cat and Dog Spicy Hot Pot” area of the stores was empty.
On the evening of November 17th, Hou Yi publicly responded in a live interview with a media outlet, stating that all “Pet Fresh” stores would be closed.
In the live broadcast, Hou Yi admitted the reason for closing the store: Today, the pet fresh food market is not a good market, and the market size is too small, which is unsolvable. Countless large factories have come in, setting a precedent, including Pat Fresh. At that time, I went to the United States and Japan for inspection and quickly opened a store. When I first opened the store, it was very popular. However, when consumers actually choose pet food, they rarely go for large-scale selection and rarely replace it.
The unit price of fresh food from Pet Fresh has been made very low, but the fresh food products are frozen and need to be thawed, which makes it inconvenient for consumers to use. After the overall production, the offline discount stores cannot have effective competitiveness. Finally, it was decided to withdraw from physical stores and retain the online part in the future.
When asked about starting a new business, this retail veteran remained full of fighting spirit and stated in a live broadcast that he would continue to do so
In the future, starting a business again will definitely be in the retail industry that I understand, and the fresh food industry may be my strongest. The future will also be centered around product brands, with a strong product system. As for which channel to sell, it doesn’t matter. Mastering the products well, all channels are willing to cooperate with you
The promotion of pet fresh food is destined to be long and difficult. It seems that Pet Fresh has also opened up an expensive market education for domestic pet fresh food.
High profile Opening: The Grand Narrative of “Cats, Dogs, Box Horses”
Since its inception, Pai Te Xian Sheng has had a high-profile start.
Tianyancha shows that Shanghai Paite Xiansheng Network Technology Co., Ltd. was established on November 15, 2024. The founder of Pai Te Xian Sheng is Hou Yi, the founder and former CEO of Hema. It is reported that in the early stages of its establishment, the company received capital from Huang Hualong, the founder of pet supplies manufacturer Nike. The equity structure is that Hou Yi holds 51% of the shares and Huang Hualong holds 49%. The two of them collaborated to open a pet restaurant in 2021.
In February 2025, Pate Xiansheng began to describe the grand narrative about “cats, dogs and horses” in Shanghai and opened its first store in Haisu Culture Plaza, Changning District. Because of its “pet Spicy Hot Pot” and other models of “self selecting fresh ingredients, on-site production and processing”, it attracted much attention. In the past, the domestic pet food market supply was mostly single dry food and industrial nutritional additives.
Hou Yi described the blueprint of Pet Fresh as follows: processing pet food with fresh ingredients as the main ingredient, no additional additives, scientific formula, clean ingredient list, pet owners can purchase it online, deliver it to their homes within 30 minutes within 3 kilometers, or bring their pets to the store for purchase. It is made and sold on the spot.
Pet Fresh’s channel strategy is to engage in discount based new retail in the pet industry, with quality food as the main focus. Its own brand (PB) accounts for more than 50% of the market, and through low-cost and efficient store operations, it wins price competitive advantages and competes with existing e-commerce platforms.
Pat Fresh’s innovation in pet food categories lies in the word “fresh”, launching freshly made and sold, refrigerated fresh food, noodle staple food, baked goods, and over 300 bulk snacks. At the same time, traditional products such as pet dry food, wet food, cat strips, canned food, etc. will be retained.
Hou Yi once said, “Daily low prices and explosive products are the main long-term competitive strategies. We do not do any promotions and provide consumers with cost-effective pet food
Among them, there are 9.9 yuan/10 dog exclusive delicious meat packs, 9.9 yuan/2.5kg mixed tofu cat litter, and 24.9 yuan/500g freshly made and sold pure meat (beef, chicken, shrimp, fish, salmon, vegetables, etc., consumers can choose) as the main fresh cat food and dog food, and this price will be maintained for a long time.
In terms of supplier cooperation, Pet Fresh has proposed “naked price procurement” and “sunshine procurement” to establish a long-term strategic supplier cooperation mechanism.
At the beginning of the year, Pai Te Xian Sheng proposed a plan to deepen its presence in the Shanghai market by 2025, opening 100 stores and achieving coverage in major urban areas of Shanghai. By the end of March to early April 2025, Pet Fresh will rapidly expand and attack core areas such as Changning, Xuhui, Pudong, and Qingpu in Shanghai with the trend of “ten stores opening together”, and launch three differentiated store types: pet friendly stores, mall MALL stores, and community stores.
In May 2025, Pet Fresh announced the completion of a $25 million angel round of financing, which will be used for big data customized product innovation, the construction of an efficient supply chain system, and the refinement and expansion of store operations.
But in November, Pat Xiansheng entered a period of self adjustment.
The reporter searched for “Pet Fresh” in the Shanghai area of the Dianping app and currently found 17 stores, many of which have displayed “closed for business”.
On November 16th, the author walked into a live Paite Fresh store in Minhang, Shanghai. Most of the stores were offering discounts, and the store prompted a 50% discount on all items except for main food, frozen food, and cat litter. There were still many consumers in the store on weekends. At present, Meituan JD can also provide online delivery.
A collision between ideals and reality
What exactly did Pat Xiansheng encounter from soaring to sudden braking?
In fact, the pet fresh food market that Hou Yi has set his sights on has huge growth potential. The global penetration rate of pet fresh food is at a low level. In the more mature pet food market in the United States, Freshpet, the first stock of pet fresh food in the United States, has a market share of only 3.6%, but fresh food products can occupy 95% of offline channels.
According to the White Paper on China’s Pet Industry in 2025, the urban pet consumption market will exceed 300 billion yuan in 2024, with pet food accounting for over 52.8%. Compared to Europe and America, the domestic pet fresh food market is in its early stages with a penetration rate of less than 5%, and there are few strong domestic pet fresh food brands and factories.
Pat Xiansheng’s concept of “cat and dog Spicy Hot Pot” is very attractive to pet raisers. But becoming the next ‘cat dog box horse’ still poses great challenges.
The Chinese pet fresh food market requires time to cultivate. This includes whether cats and dogs love to eat or not, whether they are adapted to new freshly made foods, and the concept of pet owners shifting from dry food feeding to fresh food feeding.
The stability of the fresh food supply chain has raised higher requirements for food safety. However, the domestic pet fresh food industry currently lacks unified processing standards and regulatory gaps.
On the social platform, pet raisers complained about Pete Fresh’s roast. First, they did not trust the rationality of “self-made fresh food using frozen meat”. The second is to question whether the store’s products do not display professional explanations such as nutritional ratios and combinations.
After all, pet owners who are willing to buy Pet Fresh products have high requirements for the quality of their pets’ food, and usually feed them with imported food and snacks. But most of the fresh food displayed by Pet Fresh is frozen meat, which has low consumer trust and a certain dimensional deviation between the target customer group and product positioning.
Another group of users expressed on social media that their cats and dogs had diarrhea after eating fresh meat products from Pet Fresh.
A pet industry investor told HuXiang, “The founder’s endorsement of Hema has brought capital, distribution, and supply chain advantages to Pet Fresh. However, the price system of non self owned brands cannot compete with online ones. The safety of self owned brand food is serious, and there are too many cases of pet diarrhea
The most crucial aspect is the balance between cost and profit. The cost of ingredients, equipment, and labor for freshly prepared food is not low, and the promise of “low prices every day” means extremely low gross profit margins.
The financial logic of a single store model may be difficult to implement. The cost of choosing a good location is high rent, and if the income cannot cover the cost, the long-term challenge is significant
Looking back at the entire pet racing track, a “knockout race” has already begun. Since 2025, the capital market has firmly bet on the pet economy, and at least 15 pet companies have received financing.
But the capital direction of the pet track has changed, and an obvious detail is that capital is shifting its focus from front-end brands to back-end supply chains, with pet services, technological depth, and supply chain thickness becoming core barriers.
The angel round financing of $25 million, approximately RMB 181 million, obtained by Pet Fresh at the beginning of the year is already the largest financing scale among domestic pet industry front-end brands this year.
The process of spreading and expanding the new concept of pet fresh food retail is bound to not be achieved overnight. The adjustment of Pet Fresh will not be the end of pet fresh food.
For Hou Yi, the expensive entrepreneurship of Pet Fresh may also make him more convinced that no matter how channels change, mastering products is the eternal truth of retail.
However, the current “cat dog box horse” story is more like a collision of ideals and reality. After all, it’s too early to say.
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