"Suffering comes out of cognition. If you don't know it well, it's just not bitter enough!"
A few days ago, Zhang Liaoyuan, the founder and CEO of Three Squirrels, had an exchange with Jin Cuodao and issued this heartfelt sentence.
If this sentence is true, Zhang Liaoyuan's cognition should be quite realm now.
Because just in the past few years, he and the three squirrels have been under more than ordinary pressure.
Not only is online growth sluggish, but offline stores, which were once highly anticipated, have also shrunk across the board. At the same time, the mass merchandiser snack store is menacing, and the news of financing and opening stores is one after another. Naturally, the pressure is increasing day by day.
In the midst of the pressure, the three squirrels suddenly made a 180-degree turn.
It is revealed that this year, the three squirrels have achieved 500% growth in Douyin live e-commerce, and have also won a number of "firsts" in Douyin, and the Douyin channel has gradually become the largest channel for its daily sales.
On December 20th, the three squirrels also held the first Talent Alliance Conference in Wuhu, Jiangcheng, which was also the first "reverse selection" talent conference initiated by the brand on the Douyin platform. There were hundreds of live broadcast e-commerce experts present, including Jia Nailiang, the "national daddy".
It seems that it is another story that seizes the wind and rises with it?
If it were just that simple, Zhang Liaoyuan probably wouldn't have sighed with the emotion of "knowing out of suffering".
From traditional e-commerce to live e-commerce, he and the three squirrels have gone through a lot of entanglements and pains, thinking about the direction and way of playing.
Today's change and comeback is not simply a matter of following the trend, but can even be said to be the result of a desperate fight.
I was almost cornered by a question: Who am I?
Unlike the excitement of reverse investment promotion activities, the three squirrels have been quite painful in recent years.
In 2019, Three Squirrels' revenue exceeded 10 billion, becoming the first company in the snack industry with an annual revenue of more than 10 billion. In July of the same year, it was listed on the Growth Enterprise Market (GEM) and won 10 consecutive daily limits.
But unexpectedly, he was entangled by the nightmare of "prosperity and decline".
In the next three years, its revenue never exceeded 10 billion, and its market value evaporated by more than 20 billion.
This is certainly not a problem of the three squirrels family.
In recent years, the dividends of traditional e-commerce have gradually faded, and many brands that rely on the Internet to start are difficult to adapt. In this regard, Zhang Liaoyuan's understanding is that the profiteers of the previous cycle will definitely be trapped in the previous cycle for a period of time because of inertia in the next cycle.
Either way, it's time for self-reflection and the cause.
Zhang Liaoyuan's first painful reflection is that the three squirrels have fallen into the loss of "pseudo-selves" in the past.
In 2016, Three Squirrels entered the offline market and once expanded thousands of stores, spending money without mercy, such as opening a 300-square-meter store, and the decoration cost and rent were often nearly one million.
The result of the reckless advance can only end with "a strong man breaking his wrist". This year, these directly-operated stores have disappeared.
The reason is that the three squirrels who stepped on the Internet dividend, for a long time, did everything right, and everything could grow, but in the end, they regarded the prosperity of the times as a brand halo, lost in the halo, and detached from their own essence.
The three squirrels who fell into the "pseudo-self" were soon greatly stimulated by the outside world.
One is the explosive growth of live e-commerce. For example, Jiuqian data shows that in 2022, the sales of Douyin e-commerce will reach 638.4 billion yuan, a year-on-year increase of 222%. And the three squirrels actually settled in Douyin as early as April 2020, but unfortunately it was more of a channel for promoting Douyin as a finished product, applying the old style to emerging platforms, and the results were tepid.
One is that the three squirrels almost didn't pay attention to many white labels in the past, but they actually sprung up through live e-commerce.
On the other hand, I threw myself into the trend early but lingered, with three thousand weak waters, and I really only took a scoop of drink, and there is nothing more heart-wrenching than "I could have done better". The person in charge of the three squirrels short video e-commerce said: "It really hurts to the bones." ”
Everyone understands that change is imperative, and the question is: where to start?
Zhang Liaoyuan believes: "When all enterprises have problems, they must find their original intentions. However, many people have forgotten what the original intention is, or many people have different definitions, in short, it is no less difficult to find and stick to the original intention again, no less than the second entrepreneurship.
Unexpectedly, this problem was solved by an unexpected explosion.
At the beginning of this year, the global market for macadamia nuts was oversupplied, the cost of raw materials plummeted, and the three squirrels were more stocked, so they launched a discount of 19.9 yuan for 10 packs. In just a few weeks, the daily sales reached a staggering scale of one million.
This accident shocked everyone in the three squirrels.
Afterwards, Zhang Liaoyuan hurriedly brought in the executives for a review meeting. They found that in the past, the sales peak of the three squirrels in the live broadcast e-commerce was almost without exception when the inventory was cleared. The three squirrels that improve the cost performance have a big market.
This accident made the three squirrels begin to clarify two key self-perceptions.
The first is "I was really expensive before".
The three squirrels grew up on the Internet platform and killed the intermediate channels, which was originally to win the world with cost performance, but later they poured their hearts and minds into strengthening the brand, injecting too much emotional value, invisibly raising the brand premium, standing on the opposite side of cost performance, and gradually deviating from the original intention.
So at the end of last year, Three Squirrels proposed a "high-end cost-effective" strategy. In Zhang Liaoyuan's words, it is to achieve high-quality and differentiated products under the premise of total cost advantage, realize cost optimization under its own brand, and provide consumers with snacks with "low price, distinctive, and rich choices".
Zhang Liaoyuan, founder and CEO of Three Squirrels
Under the seemingly common sense strategic planning, the supply chain and channels of the three squirrels began to be reshaped, which we will talk about in detail later.
The second is to solve the question of "who am I".
The different answers to the question "Who am I?" determine the direction of the future. Are the three squirrels brands, categories, or retail? Looking at live e-commerce and Douyin from different perspectives, the vision and scenery are completely different.
In the end, Zhang Liaoyuan's answer was: "I am not a brand, I am a retailer, and I want to kill the brand premium." ”
Since then, the retail perspective, rather than the brand perspective, has become the main perspective of the three squirrels to see the world.
But it also means that the three squirrels must follow the first characteristics of the retail industry, which are cost, efficiency and experience – which are also in line with the original intention.
To this end, the three squirrels decided to achieve retail in the form of their own brands, eliminating the brand premium, and at the same time, not limited to nuts, but operating a full range of categories to meet users' needs for "rich and delicious" snacks.
"You can't just focus on nuts, that's brand thinking, and you can't rise to the height of corporate operations, otherwise it will run counter to the original intention. Zhang Liaoyuan said.
Therefore, in addition to nut products, the three squirrels have also successively launched cod intestines, quail eggs, air-dried beef, boneless phoenix feet, etc., including tens of millions of single products.
"To pay attention to the unexpected is to respect the law. Looking back at the origin of this change, Zhang Liaoyuan sighed.
Tens of billions of reflections in the era of e-commerce 2.0:
The past was too narrow!
Grasp the law in the accident and find the direction that suits you in the law.
The truth is not complicated, but as with many simple truths in the world, there is a huge gap between knowing and doing.
In particular, the outside world has undergone earth-shaking changes, and the logic of large single products has also changed. And for the three squirrels who must fight cost, efficiency and experience, large items are destined to be indispensable.
At this time, we must think about a question: in the new e-commerce environment, what changes have occurred in the logic of large single products?
In the era of traditional e-commerce, which I call "e-commerce 1.0", there are three main characteristics of creating large single products.
First, subdivide explosive products. According to Zhang Liaoyuan's words, this is called "long-tail demand explosion". Limited by scale and offline premiums, it may be difficult for an offline city to sell a segmented product, but on an e-commerce platform that gathers hundreds of millions of people, it is very likely that the segmentation demand or the explosion of long-tail demand is very likely.
Second, powerful To C functions, platforms and brands directly face countless consumers.
Third, we must attack the traffic entrance. To put it bluntly, the main thing is to spend money to buy traffic, which is the premise for many brands to get strong To C functions on traditional e-commerce platforms.
It is conceivable that when the traffic dividend of traditional e-commerce platforms disappears, the birth of large single products is becoming more and more effective.
In the era of e-commerce 2.0, social media e-commerce represented by Douyin and Pinduoduo has given birth to a new way of playing large single products, and it is also an opportunity for countless brands to transform.
Unfortunately, Zhang Liaoyuan was full of "prejudice" against them at first.
In his opinion, these new platforms, which are mainly controlled by algorithms, give the brand very unstable traffic. In contrast, traditional e-commerce platforms have search and traffic entrances, and the traffic is at least guaranteed.
Maybe going to a new platform is just a part-time job for a new platform and KOL.
However, when the three squirrels really began to pay attention to the new platform, they soon had to admit that their past pattern was small.
"It's because we used to be narrow-minded!" Zhang Liaoyuan went on to explain, "Douyin and Pinduoduo distribute traffic entirely based on user demand. If the brand's performance on it is unstable, it is more of its own problem, and the product is not extreme. ”
After a moment of introspection, the three squirrels began to explore the logic of large single products in the era of e-commerce 2.0.
In addition to making good use of the To C traffic from the live broadcast room, the key is to find the entry point that can give full play to the greatest power of the talent.
The reason why it is important to regard influencers as the top priority, Zhang Liaoyuan said: "Tens of thousands of small and medium-sized influencers can be understood as distributors, and they cover the channels with the largest number of Chinese population. ”
There are two main points in the process of impressing influencers and users.
First of all, find the price band of the popular models. How much merchandise are they more happy to bring?
Second, analyze user needs and preferably make product differentiation.
Next, wait for the promotion of experts and algorithms, and concoct the explosive models in the same way.
Today, there are 12,200 food experts with annual sales of more than 500,000 on Douyin, and more than 6,200 have cooperated with Three Squirrels, with a penetration rate of 51%, leading the whole platform.
That's why, the three squirrels, which seem to be firmly tied to nuts, are now getting a large number of consumers to pay for their other products. For example, it has launched a box of truffles for 29.9 yuan, and the daily sales have reached three or four hundred thousand. Zhang Liaoyuan admitted frankly that he was "stunned", but he didn't expect the three squirrels to sell even chocolate.
However, the platform mechanism in the era of e-commerce 2.0 is the same for everyone.
Therefore, whether we can continue to create large single products in this environment depends not only on understanding and cooperating with the mechanism, but also on whether the company has the strength to launch the ultimate product, so as to directly hit the needs of influencers and users, as well as the platform's push preferences.
To that end, the three squirrels have almost reinvented the product-building process internally. This is the opposite of the white label product that will eventually earn a premium after it becomes bigger, because the three squirrels are already a brand, and they can operate in reverse.
"Start with the end in mind and fight the other way around. Zhang Liaoyuan believes that if the traditional playing process is used to promote, many products with 19.9 yuan and 10 packs cannot be done at all. "But what if it's the other way around? Suppose a single item sells 200,000 a day. Under these conditions, how to optimize all aspects of the supply chain, including courier fees, packaging equipment, etc. Slowly, the impossible becomes possible. ”
For the same purpose, the three squirrels implemented two ruthless tricks: one product and one chain.
One product and one chain, that is, a product is dedicated to a chain, and then each link on the chain is disassembled, and the entire value chain is reorganized, so detailed that even the 5 cent tape has to be assessed.
In the end, Zhang Liaoyuan sighed: "We used to be too wasteful!"
The integration of product and sales, that is, the integration of the two departments of product and sales, and the sales as the leader, with the product as the support, to solve the situation that the product and sales in the past did their own work and passed the buck to each other.
"Now we rarely have departmental meetings, they are all called 'product sales meetings'. Zhang Liaoyuan said.
"Fight to the death this year, and roll seriously next year!"
"The volume of 2023 is a desperate fight, and the volume of 2024 is to roll seriously and roll out of competitiveness. ”
Zhang Liaoyuan said very bluntly that if he doesn't roll in 2023, he may die. After relieving themselves, they now feel that there are a lot of things, and the three squirrels have the ability to try and "roll a roll" seriously.
His so-called "volume" is not an industry roll, but a roll with himself, out of the comfort zone of holding the brand to earn a premium in the past, reform his own life, so that consumers can get benefits, so as to go through the cycle.
He has also expressed more than once that he hopes to make the three squirrels Sam and Costco in the field of casual snacks.
These words are not all self-deprecation.
Thanks to the outbreak of live broadcast e-commerce, the performance of the three squirrels has picked up significantly. In the third quarter of this year, Three Squirrels created a revenue of 1.689 billion yuan, a year-on-year increase of 38.56%, and a net profit of 40.86% year-on-year.
It's just that to become Sam's and Costco in the field of casual snacks, it is not enough to rely on the existing advantageous categories and online advantages.
It needs to be unbooked on all categories and all channels!
The full-category operation has become more and more obvious, and how does the omni-channel layout come from?
Although the three squirrels have almost closed all the offline stores in the past in the past two years, it does not mean that it has no idea about offline since then. "In the past, the store didn't care about the cost, didn't look at the selling price, and the model was very problematic, but it was just obscured by the so-called brand halo. In June this year, Three Squirrels opened its own brand of community snack stores, and the total number of stores nationwide has exceeded 170 in half a year.
For the community snack shop, the three squirrels take it very seriously. Zhang Liaoyuan even believes: "From the perspective of private label retailers, those who win the community win the world." "In the era of retail 1.0, supermarkets are dominant, and after years of urbanization in China, the granularity of business districts has become a community, and the community has intercepted the flow of people, and no one has taken a taxi to go out, which has come to the era of retail 2.0, resulting in many supermarkets going downhill.
But the greater the opportunity, the greater the challenge.
It is not difficult to see that the three squirrels will face off with the mass merchandiser snack store offline, and the latter's main position is also in the community.
In the minds of some people, in the face of mass merchandising snack shops, the odds of the three squirrels may not be too optimistic.
Mass-market snack stores are gaining momentum, and the head brand is still claiming to "open 7 stores a day". In addition, the mass-selling snack shop, which focuses on low prices, also seems to be more down-to-earth than the three squirrels.
But is that really the case?
Mass-selling snack stores are flooded with a large number of white labels, and they are doing low prices in the low price band. The three squirrels have greater ambitions, to do the low price of the full price band, and also set a Maori red line for themselves.
As a result, the price of the three squirrels' products was almost halved. For example, macadamia nuts are sold at three squirrels at a community snack shop for only 29.8 yuan per catty, which is only half the price of a freshly made roasted goods store; air-dried duck necks are sold at three squirrels at a community snack store for 5.6 yuan, even if they are sold at a wholesale snack store for 5.9 yuan or 6.5 yuan; dried mangoes are sold at 29.8 yuan per catty in the store, and 27.8 yuan per catty after peeling and weighing......
At first glance, they are all low prices, no different from the routines of mass snack stores.
In fact, under the surface of low prices, there are two hidden points of victory and defeat.
At the product PK level, the three squirrels mainly focus on their own brands and make good use of their brand advantages and product differentiation advantages compared to white labels. On the other hand, maintain an open, competitive and cooperative attitude, and cooperate with other brands at home and abroad. Zhang Liaoyuan once publicly stated in the circle of friends: If there is a need for three squirrel products, three squirrels can also cooperate with them, and three squirrels will also actively introduce products that consumers demand.
Even the most popular and recognized white-label products in the mass snack store, the three squirrels are ready to take the initiative to compatible.
While maintaining product richness, differentiation and quality, whether it can continue to reduce prices and realize the idea of "high-end cost performance" is another winning or losing point.
This is undoubtedly a test of the strength of the supply chain.
The biggest change for the three squirrels in recent years is actually from the sales end to the manufacturing end and the planting end.
In the past, it relied on OEM production, but now it is a series of primary, secondary and tertiary production, penetrating into the entire chain to "improve efficiency and squeeze out water", which has brought about a reduction in cost and price.
For example, on the manufacturing side, Three Squirrels has independently invested in the construction of demonstration factories such as daily nuts, macadamia nuts, pecans, and almonds, which can not only better control the cost, but also the quality.
Compared with the simple purchasing relationship between snack stores and upstream factories, the depth of the supply chain of private label brands is naturally very different.
In the final analysis, low prices are only the basic conditions for entering the snack mass sales track, not the root cause.
Epilogue:
Not long ago, after the news of the sharp price reduction of peers rushed to the hot search, many people found Zhang Liaoyuan and asked him what he thought, and he took the opportunity to interpret what is the "high-end cost-effective" strategy of the three squirrels in the circle of friends.
Finally, he wrote: "Everything is consumer-oriented, and it is the constant that responds to all changes!"
However, again, the truth is always simple, but it is difficult to adhere to the truth.
After regaining the original intention of cost performance, no one dares to make a 100% guarantee that it will be lost again in the future.
For this reason, now Zhang Liaoyuan reminds himself from time to time: "You must restrain greed." Profiteering is cultivating opponents, and monopoly is digging one's own grave!"
The ups and downs and thinking of the three squirrels, and Zhang Liaoyuan's introspection, are of great reference significance for many Chinese enterprises now.
The consciousness and cognition of the boss largely determine the direction of the enterprise. Many times, the cycle of the enterprise is actually the cycle of the boss.
Zhang Liaoyuan also recently had a self-examination from the "Tao Te Ching": do not see yourself, do not be self-conscious, do not self-defeat, do not be self-conscious.
Here, it is also for all entrepreneurs who want to stick to their original intentions.