Three Squirrels is a snack company starting from online shopping on Alibaba and JD.com in China. Founded in 2012 by Zhang Liaoyuan, and IPOed in 2019, Three Squirrels created a legend of selling $14 million nuts within in 20 mins. It currently has over 500 SKUs, includes nuts, baked snacks and meat snacks, with annual sales around 10 billion RMB ($ 1.6 billion dollars) in 2019.
Three Squirrels literally means the three squirrels: little cool, little beauty and little cheap. Using the cute and vivid image of squirrels, the company draw lots of attention from customers and made great marketing campaign to promote the brand.
80% of sales comes from online sales in 2018. To meet with the needs of having multiple snacks when quarantined at home, Three Squirrels decided to increase SKUs, such as ready to cook hotpot, bread, biscuits and multi nuts.
The success of Three Squirrels is highly related to the image of Three squirrels, which are easy to remember and fun to share. Three squirrels also create social feature when people buy products. Three Squirrels had the ambition of develping Three Squirrels towards Disney direction. During the Covid-19 spread period, it is a perfect time to create a digital platform for Three Squirrels funs. I must admit that it is hard to create interesting content. But with the marketing team, and reduced video making cost, this could come true in this digital time.
According to Alibaba data, sales of Three Squirrel snacks products in China hit CNY100mn (US$14.2mn) in just 19 minutes and 23 seconds, showcasing the immense popularity of these snacks locally. It currently produces over 500 product SKUs, particularly covering its three major categories of nuts, baked goods and meat products.
The company has also gone the extra mile in creating a backstory for the three squirrels by creating specific cartoon characters for these and developing other related merchandise, as well as a cartoon series available online.
Three Squirrels is an internet phenomenon, an emerging food brand, and a remarkable success in charming the millenial consumers of China. Despite its lighthearted name, Three Squirrels seems set to grow into a heavyweight. The two-year-old startup from Anhui Province has managed to turn a relatively mundane product, nuts, into a higher-valued snack for the young generation. It has become the largest retailer of snack food on Taobao and TMall, the two e-commerce platforms of Alibaba Group.
By the standards of China's vast market, Three Squirrels might still be considered a small-sized player. It sold to about 1.75 million customers so far, and its 2013 sales was about one-tenth of the sales of China's largest nuts brand, Shenzhen-listed Chacha Food Co Ltd. But Three Squirrels is growing exponentially. Compared to the 2013 annual sales of $52 million (RMB 326 million), Three Squirrels made $25 million (RMB 160 million) in January 2014 alone.
Getting to know the Three Squirrels brand is like entering a different world, a world created for millenials. The brand is based on three cartoon squirrels, each with its own teenager personality played out in animation clips. These squirrel characters interact with customers through their public WeChat accounts. The company differentiates itself on customer service, and even invented new lingo to fit its brand image. On the customer service hotline, customers are addressed as 'owners' (as in 'pet owners') and a purchase is called an 'adoption'. The product packaging shows attention to detail that is much loved by consumers -- each box of nuts come with a packet of wet tissue, a bag for placing shells, and a nut cracker, if applicable. Several competing nuts brands in China have now copied some of these marketing tactics and packaging features, perhaps a flattering sign that Three Squirrels is indeed a market disruptor.
The rags-to-riches story of 38-year-old founder Zhang Liaoyuan has also become a familiar tale for China's younger generation. Coming from a rural village in southern Anhui Province, Zhang had worked odd jobs for about nine years, ranging from factory work to selling VCDs and iced drinks in street stalls, before he landed a job at a foods company in Anhui that specialized in nuts. He rose through the ranks and became a senior director in sales. In 2011, Zhang launched the online store Coconut for his employer. Although a commercial success, hard lessons were learned when, from day one, the popular store received more orders than it can handle, resulting in huge backlogs in delivery. Zhang spent months to rebuild the brand's reputation. Exactly a year after launching Coconut, he left to start his own business. This was the prelude to Zhang's founding of Three Squirrels.
On the other hand, resolving the oversupply of an agricultural product involves a whole supply chain. This is the challenge for Three Squirrels. Nuts are imported from various countries including the US, Brazil and Australia, as well as sourced in China. They are then processed in China and other Asian countries, and sent to one of three logistics centers in Beijing, Wuhu or Guangzhou. To strengthen its nationwide delivery network, a new logistics facility is planned in Chengdu. How companies like Three Squirrels respond to surges in demand would be relevant to how local governments think about managing surges in supply.
The internet is a valuable starting point for Three Squirrels to distribute snacks due to the higher efficiency the internet offers in comparison to traditional offline channels. Three Squirrels seized e-commerce opportunities in 2012, securing the first-mover advantage. While the overall market in nuts, dried fruits and other snacks has grown slowly over the last few years, sales of nuts, dried fruits and other snacks on Tmall has expanded significantly, with CAGRs of 55%, 37% and 55% from 2014 to 2016. As of June 2017, the number of Three Squirrels purchasers exceeded 45 million and the products had an average repeating purchase rate of over 35%. In the snacks industry which has a low barrier for entry, Three Squirrels has the scale.
Three Squirrels have entered the IPO listing queue three times so far but unexpectedly suspended the process twice, likely due to its violation of food safety standards. According to company prospectus, 7 consumers sued Three Squirrels for discovering worms in its dried fruit products. The National Quality Inspection Department also found that several nuts products showed excessive fungus. Such incidents were likely caused by the large reliance on OEM production, a model allows Three Squirrels to meet surging production demands but raises concerns on food quality. In the event that Three Squirrels fail to inspect those issues or fail to maintain food quality during the manufacturing, storage and transportation process, the company may experience both headwinds on financials and a further delay in IPO.
According to Sealand Securities, the CR3 of the Chinese online snack sector was 23% in 2018. The three leaders were Three Squirrels, Be & Cherry and BESTORE, with respective market shares of 11%, 7% and 5%. While snack industry has a low barrier to enter, the sector leaders are benefited from scale advantages, which allow them to develop additional barriers (for instance, allocating more capital on marketing, developing more distribution channels, increasing warehouses and logistic centers, etc)
For people who are not familiar with Three Squirrels, the e-commerce company founded in 2012 and Three Squirrels is a brand selling nuts and eventually other snacks. Three Squirrels has already grown exponentially at the beginning of their business: compared to the 2013 annual sales of USD 52 million (RMB 326 million), Three Squirrels snacks genrated USD 25 million (RMB 160 million) in January 2014 alone. In 2015, the third year of its existence, Three Squirrels had sales of USD 370 million. How does a five-person startup company become a snack giant on the Chinese market
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Anhui Three Squirrels E-commerce Co., Ltd., established in 2012, is an enterprise specializing in the research and development, distribution, and online B2C brand marketing of forest food such as nuts, dried fruit, tea, and more.
2) Squirrels can jump vertically five feet, and can leap between objects that are over ten feet apart. Given that squirrels are less than 1/10th the size of people, if you could do this, you would be a superhero who could literally jump onto five story buildings and clear buses and trucks in a single bound.
I am currently researching caching behavior of red squirrels online.. and it is limited.. because I have become fascinated with my red squirrel family and their recent behavior of putting black walnuts BACK into the trees for winter. Funniest thing! I went to take some photos around a tree today and one of them saw me, as soon as I got back to the porch he/she ran to the tree and spent a few minutes examining their walnut ornamented red maple which I call mine.
I have had several little red squirrels in my yard since the spring. I have been feeding