On the evening of April 22, three squirrels disclosed their 2021 annual reports, once again setting off a storm in the market.
According to the 2021 annual report of the three squirrels, last year's brand operating income was 9.770 billion yuan, which was two consecutive fiscal years of decline, the net profit in the first quarter was close to the waist, the marketing cost remained high, the expansion of offline stores was less than expected, and the Wandian plan was also suspended.
Matching the 2021 earnings report is the stock price and market value of the three squirrels that have fallen all the way. Since the listing, the stock price of the three squirrels has reached 91.59 yuan at the highest, and the total market value at the peak has exceeded 36 billion yuan.
But as of the close of the 24th, the three squirrels have been quoted as low as 24 yuan, and the total market value has fallen to 9.6 billion, shrinking by nearly 27 billion. What exactly is it that brought the three squirrels to where they are today?
01
Traffic dilemma
As the first batch of Internet celebrity snack brands on the Internet, three squirrels once made a fortune by "traffic".
Three squirrels, rising in 2012. At that time, most traditional enterprises had not yet fully touched the net at that time, and the traditional enterprises that had already touched the net had not yet correctly understood the real role of brands on e-commerce companies.
In contrast, although Zhang Liaoyuan is doing a traditional industry, he has discovered the potential of the Internet early.
"I understand both traditional corporate marketing and supply chain management, and the Internet. Most traditional entrepreneurs do not understand the Internet, especially other businesses that sell nuts on the Internet, and do not understand brand management, so at this point, the three squirrels have found their own advantages, rise in a short period of time, and complete their own "counterattack war". ”
In 2012, Zhang Liaoyuan bid farewell to Zhan's Food, which had been staying for ten years, and created the Three Squirrel Brands with $1.5 million invested by IDG Capital.
In June of the same year, three squirrels were officially launched on Tmall, focusing on nuts, and soon won the first place in the sales of Tmall double 11 snack specialties with a daily sales volume of 7.66 million yuan per store.
In the following 7 years, with the blessing of e-commerce platform traffic, Zhang Liaoyuan led his team to develop three squirrels from a food brand that "lives in the third-tier cities of Anhui" into a super Internet celebrity snack brand with an annual revenue of more than 10 billion yuan, which has become synonymous with Internet thinking like Xiaomi and Tesla.
In July 2019, as the "first stock of e-commerce snacks", three squirrels were listed on the ChiNext board of the Shenzhen Stock Exchange, and the stock price soared, with more than a dozen consecutive ups and downs, and the scenery was unlimited.
However, the drawbacks of the three squirrels relying purely on traffic sales soon appeared.
With the rise of new outlets such as douyin live e-commerce, traffic differentiation, dividends peaked, and competition became more and more intense, and the three squirrels soon found that the traffic business was not good.
"The entrepreneurial era of three squirrels with e-commerce as the core is over." Three Squirrels' 2021 annual report reads.
From 2019, the three squirrels began to show signs of performance decline, in 2020, the total operating income of the three squirrels fell by 3.72% year-on-year for the first time, and in 2021, it fell by 0.24%, and the total revenue of the three squirrels was in a downward trend for two consecutive years.
The downward trend in online revenue is even more pronounced. According to the financial report, at the end of 2021, the sales of the three squirrels on Tmall were 2.956 billion yuan, and the sales in Jingdong were 2.408 billion yuan. Among them, JD.com's sales fell by more than 10% year-on-year, and Tmall's sales fell by more than 20% year-on-year.
And although the three squirrels have been trying to get rid of the single channel dilemma, according to the latest financial report in 2021, the e-commerce sales of the three squirrels still account for more than 50% of the total revenue.
Obviously, compared with the newly expanded offline channels, online e-commerce is still the most important sales channel for the three squirrels. As a brand that grew under the traffic dividend, it is not easy for the three squirrels to truly get rid of traffic dependence.
02
Wandian "brake"
Since realizing that the brand relies too much on online channels, the three squirrels have opened a "multi-channel" strategy, focusing on offline channels and opening up offline expansion roads such as alliance stores, direct stores and new distribution based on regional distributors.
During the 2019 New Year Festival, Zhang Liaoyuan announced that three squirrels will open 1,000 offline stores in one year, and it is expected to open 10,000 offline stores by 2022, that is, the three squirrels' well-known offline ten thousand stores plan.
However, the reality is far less optimistic than planned.
According to the financial report, as of the end of December 2021, the offline stores of the three squirrels were only 1205, including 140 feeding stores and 925 alliance stores. The number of stores today is very different from the original goal of 10,000 stores.
Moreover, looking closely at the sales status of the top ten stores listed in the annual report, we will find that all the good performance is brand direct stores.
As the most offline store, the alliance store has sales of only 749 million yuan, and the average single store sales are only about one-tenth of that of directly operated stores. The three squirrels obviously did not go through the path of offline joining.
The annual report pointed out that the three squirrels have recognized the problems in the large-scale and extensive development model of stores in the past, and will completely suspend store expansion, and vigorously shut down stores that do not meet long-term positioning and poor performance.
The next step will be to focus on improving the profitability of single stores, optimizing SKUs, and focusing on the high-quality development of high-quality stores. This also means that Zhang Liaoyuan overturned the previously formulated strategy of vigorously expanding direct sales and franchised stores.
Can the three squirrels, which is similar to the "woodpecker plan" of Haidilao's "hemostasis" strategy, open up offline problems for the three squirrels and solve the traffic dilemma of the brand?
Catering O2O thinks it is challenging. After all, competing brands such as Good Shop, Baicao Flavor, Laiyifen, and Qiaqia Food have been working offline for many years, and they have more advantages than three squirrels.
Good offline business side launch distribution performance is good, three squirrels into the regional distribution, has reached cooperation with nearly 300 dealers, settled in Yonghui, Wal-Mart, RT-Mart and other large commercial supermarket shelves, within a year of revenue of more than 1.6 billion yuan.
In other words, the new distribution business may become the main force of the offline development of the three squirrels in the future.
03
"Nuts" are not easy
Nuts, is the origin of the story of three squirrels.
In the face of stagnant growth of e-commerce and the disappearance of traffic dividends, the development of offline channels is not smooth. In 2021, Zhang Liaoyuan chose to refocus on his most handy nut category, hoping to adjust the brand growth engine from the past "traffic driven" to "mentally driven".
The market potential for nuts is enormous. Morgan Stanley and British Economists predict that by 2030, the average income level of Chinese will double from 2020.
With the growth of revenue and the popularization of nut health value, the capacity of China's nut market will be further opened, and it is expected to reach 200 billion yuan by 2030.
The 2021 nut-focused strategy has brought great returns to the three squirrels. According to the data on the financial report, in the whole year of 2021, the revenue of the nut category of the three squirrels was 5.058 billion yuan, and the gross profit margin of the category reached 29.14%, an increase of 4.33% year-on-year.
In just one year, three squirrels have created a large single product with annual sales of more than 1 billion yuan, "Daily Nuts" and a number of billion-level large items, including pecans, macadamia nuts, paper walnuts, hand-peeled almonds, cashews, pistachios and so on.
Daily nut sales exceeded 1 billion yuan during the reporting period, ranking top 1 in the Tmall mixed nut category.
But behind these extraordinary achievements is the large-scale advertising investment of three squirrels. According to the annual report, in the second half of 2021 alone, three squirrels invested hundreds of millions of brand costs around the main brand nut mentality.
During the 2021 Annual Goods Festival, the three squirrels carried out in-depth cooperation with the media company Ladder Media to carry out full coverage and saturation in 22 core cities across the country.
At the same time, it cooperates with CCTV to do year-round brand exhibition and broadcasting in 10 channels such as CCTV-1 comprehensive channel, CCTV-2 financial channel, CCTV-3 variety channel, CCTV-4 Chinese international channel.
Judging from the advertising slogan "send nuts to three squirrels" and the action of smashing the advertisement, the three squirrels adopt a "brain platinum" advertising strategy.
Regardless of the advertising effect, only the consumer mind occupation is a long process, which requires long-term advertising and market education. In the short term, it is not easy for the three to achieve breakthrough growth through the mental possession of the "nut" category.
summary:
The traffic dividend period of the three squirrels has ended, and the brand is ending its entrepreneurship and entering its prime, experiencing a painful period of transformation.
"If the success of the three squirrels in the previous stage mainly comes from channel innovation and traffic revolution, then the success of the three squirrels in the latter stage depends on the product itself." In the final analysis, it is the product quality and cost performance. Guo Yuxuan, a researcher at the Beijing Institute of Economics, said.
Transformation is painful, but it is also an opportunity. Next, the three squirrels only need to do: First, take the nut supply chain as the core, improve the brand omni-channel, multi-brand layout. Second, vigorously develop the brand fawn blue blue, to create the second growth curve of the brand.
Three squirrels to truly achieve the grand goal of "a hundred years of squirrels, hundreds of billions of squirrels" may not be a dream.
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