The line of tens of billions of revenue, three squirrels failed to break through.
On April 22, Three Squirrels released its 2021 annual financial report and 2022 first quarter financial report. According to the financial report, in the whole year of 2021, the three squirrels achieved revenue of 9.770 billion yuan, down 0.24% year-on-year. This is the third squirrel's two consecutive years of revenue decline; in 2021, its net profit attributable to shareholders of listed companies was 411 million yuan, an increase of 36.43% year-on-year.
Revenue and net profit of Three Squirrels in each quarter of 2021 (Source: Company's 2021 Annual Report)
In the last two quarters, the performance of the three squirrels has been even less than ideal. In the fourth quarter of 2021, the three squirrels recorded a loss of 31.1448 million yuan. In the first quarter of 2022, the revenue of the three squirrels fell by 15.85% year-on-year to 3.089 billion yuan; the net profit attributable to the shareholders of the listed company fell by 48.75% year-on-year to 161 million yuan.
In response to the latest quarterly loss, the three squirrels explained in the financial report that it was due to the higher base in the same period last year, the increase in raw material costs, and the higher advertising investment and share payment expenditure.
The first generation of influencers could not sell online
As a casual snack brand that originally focused on online, Three Squirrels could not sell online.
According to the financial report, in 2021, the operating income of the three squirrels from the third-party e-commerce platform was 6.479 billion yuan, down 10.06% from the previous year. Among them, the decline in revenue from the Tmall system is more obvious, with a decline of 22.32%.
However, the overall revenue structure of the three squirrels from channels has improved, and the proportion of sales in its online channels has fallen from 73.56% in 2020 to 66.31%, and the proportion of offline sales has risen to 33.69%.
The growth of offline channels is mainly dependent on new distribution channels and affiliate stores.
In 2021, The Three Squirrels vigorously develop new distribution channels, and through the establishment of cooperation with nearly 300 dealers, they will settle in chain supermarkets such as Yonghui, Wal-Mart, and RT-Mart, covering nearly 300 prefecture-level cities across the country. In 2021, the revenue of the three squirrels from the new distribution channel was 1.609 billion yuan, an increase of 38.16% year-on-year.
In terms of stores, in 2021, the three squirrels closed a large number of stores and opened a large number of stores, of which 288 alliance stores were closed, 43 self-operated feeding stores, 341 new alliance stores, and 12 newly opened feeding stores. As of the end of the period, the three squirrels operated a total of 925 alliance stores, and the revenue from the alliance stores increased by 63.3% year-on-year to 749 million yuan; the revenue from the self-operated food stores of 140 stores decreased by 6.39% year-on-year to 818 million yuan.
Since 2019, the three squirrels have begun to lay out offline stores, but the three squirrels now believe that the past store opening model is too large-scale and extensive, and next, the three squirrels will completely suspend store expansion, while vigorously shutting down stores that do not meet long-term positioning and poor performance.
The main brand "Three Squirrels" is still the most important source of income for the Three Squirrels, with revenue of 9.235 billion yuan in 2021, down 4.97% year-on-year; the new brand of baby snacks "Deer Blue Blue" has become a new driving force for its revenue growth, and in 2021, the revenue in this regard increased by 794.54% year-on-year to 492 million yuan.
The main products of the three squirrels include nuts, baking, meat products and others, thanks to the company's continuous initiative to reduce SKUs and optimize the category structure, in 2021, the gross profit margin of all its categories has been improved, and the overall gross profit margin has increased by 5.48% year-on-year to 29.38%.
However, the cost of sales from the three squirrels is still high, in 2021, its sales expenses reached 2.072 billion yuan, an increase of 21.01% year-on-year, accounting for 21.21% of revenue, which is mainly due to the increase in promotion and platform service fees.
Three squirrels are fully transformed to survive
Founded in 2012, the three squirrels grew rapidly by virtue of the Ali system's cultivation of the Tao brand, and participated in Tmall Double Eleven in the first year of its establishment, with daily sales reaching 7.66 million yuan. This record has since been constantly refreshed by itself.
In July 2019, three squirrels landed on the A-share listing. On the first day of listing, the stock price rose by 44.01%, the market value reached 8.48 billion yuan, and its operating income exceeded 10 billion yuan in this year.
Xinhua News Agency photo, Shenzhen (Guangdong), July 12, 2019 Three Squirrels Listed to Continue to Promote Digital Innovation and Development On July 12, Zhang Liaoyuan, founder of Three Squirrels, delivered a speech at the listing ceremony held by the Shenzhen Stock Exchange. On the same day, three squirrels of snack industry enterprises officially landed on the A-share market and were listed on the ChiNext board of the Shenzhen Stock Exchange. Photo by Xinhua News Agency reporter Mao Siqian
However, after the stock price stood at a high of 91.59 yuan on May 18, 2020, the stock price of the three squirrels fluctuated all the way down, and as of the close of April 22, it was reported at 29.27 yuan, and the market value shrank by 24 billion yuan to 11.7 billion yuan.
In the past, the three squirrels were often jokingly called "snack porters", and in addition to the joint processing of nuts and dried fruit products, leisure snacks were handed over to the foundry.
In the OEM mode, the food safety problems of the three squirrels occur frequently. In 2021 double 11, some consumers broke the news that the three squirrels they purchased to tear bread and daily nuts were moldy, and then the three squirrels said they would be responsible for the end; in May 2021, the peroxide value of a batch of open pine nuts products of three squirrels exceeded the standard by 3.4 times, and was notified by the State Administration of Market Regulation.
On the consumer complaint platform "Black Cat", as of April 21, there were 1553 complaints related to the three squirrels, the main problems were foreign bodies and mold in food.
In order to ensure the stability of the upstream supply chain, in 2019, the three squirrels proposed to build an alliance factory model, through the integration of suppliers to settle in, with the company's testing, logistics system for support, and in the form of equity joint venture, with suppliers to reach assets, capital, brand and channel "four alliances",
Originally, the alliance factory is expected to be put into use at the end of 2021, but on April 21, the three squirrels related staff told the Nanduwan Finance Agency reporter that the alliance factory is basically completed, but it has not yet been put into use.
Under the situation of declining revenue and criticized oem model, on April 23, three squirrels announced the launch of a comprehensive transformation.
According to the announcement, this transformation mainly involves development concepts, development paths and development models. It is mentioned that the three squirrels will lead nuts from leisure healthy snack consumption to daily nut dietary consumption, comprehensively enhance the radiation capacity and influence of the global nut industry; indirectly enter the secondary industry through the establishment of supply chain innovation models such as demonstration or alliance factories, so as to vigorously promote the improvement of industrialization level and the added value brought about by technological innovation; the three squirrels will transform from e-commerce to omni-channel, and this also marks the end of the entrepreneurial era of the three squirrels with e-commerce as the core. At the same time, the era of nut supply chain as the core and omni-channel and multi-brand layout has begun.
However, in the view of Lin Yue, chief analyst of Lingyan Consulting Management, the three squirrels have returned to mainstream offline channels and supermarket channels, although the momentum of growth in the short term is good, but it does not mean that it is a correct strategy.
Lin Yue told the Nanduwan Finance News Agency reporter that because online is still a channel that needs continuous investment, the three squirrels that are popular because of e-commerce originally carry the attributes of the Internet, and the marketing model is also familiar, which is an advantage in the post-epidemic era, but now the direction of the new transformation is a red sea, and it has too much homework to make up for in traditional channels.
Written by: Zhan Danqing, reporter of Nandu Wan Finance Agency