Douyin accidentally "rescued" three squirrels
Produced by Tiger Sniff Commercial Consumer Group
Author: Yao Lan
Editor|Miao Zhengqing
Visual China
"On the first day of Taobao Double 11 in 2012, we 'rolled' out 7.66 million yuan. 'Roll' for 7 years, and we 'rolled' out of a listed company in 2019. But I'm sorry, we laid out Douyin in 2020, but we haven't made big achievements in three years. From this year onwards, we will have the ability to 'roll' on Douyin. Zhang Liaoyuan, founder and CEO of Three Squirrels, said meaningfully.
This is a scene at the "Talent Alliance Conference and New Year's Festival Investment Conference" in Wuhu, Anhui Province on December 20, 2023: In the face of more than 100 Douyin talents, "Squirrel Daddy" Zhang Liaoyuan has expectations in his eyes and constantly expresses the company's determination to make Douyin.
Zhang Liaoyuan on the stage is indeed difficult to hide his joy. Just over a month ago, the three squirrels achieved a breakthrough in Douyin: Cicada Cube data shows that during the 2023 Douyin Double 11 promotion, the three squirrels will dominate and win the first place in the sales list of Douyin snacks/nuts/specialties with sales of more than 100 million yuan, and their sales and sales volume are 2-3 times that of the second and third places. The results of the bet on Douyin have already been revealed: since May 2023, Three Squirrels has achieved a substantial growth of 500% on Douyin in half a year, and has been ranked first in brand sales in the food category of Douyin so far.
This "counterattack" with Douyin as the core is imminent, as the three squirrels hit rock bottom in 2022. In 2022, Three Squirrels will achieve revenue of 7.293 billion yuan, a year-on-year decrease of 25.35%, returning to the level of 2018, a net profit of 129 million yuan, a year-on-year decrease of 68.61%, directly returning to the level before 2016, online channel revenue of 4.788 billion yuan, accounting for 65.66% of total revenue, a year-on-year decrease of 26.09%, and more than 500 offline stores. Three squirrels, the winners of the last cycle, trapped in the last cycle?
In fact, the doubts about the "three squirrels left behind" have never stopped in the past four years, and 2019 has become a watershed in the development of the three squirrels enterprise. In July of this year, three squirrels landed on the Shenzhen Stock Exchange with the title of "the first stock of national snacks". In the same year, Three Squirrels became the first and fastest leisure snack company in China to exceed 10 billion in revenue. However, in the next three years, its revenue continued to decline, and it never exceeded 10 billion yuan, and its market value evaporated by more than 20 billion yuan from the peak of 36 billion yuan in 2020.
Three Squirrels Community Snack Shop, Source: Three Squirrels
"The understanding is not in place, I think it is not enough to suffer. On the same day, before the event, in the office of the Wuhu headquarters of the three squirrels, Zhang Liaoyuan said to Tiger Sniff.
The "hard days" of the past few years have given "Squirrel Daddy" a new understanding of the company, the track, and the traffic. A person close to Zhang Liaoyuan believes that "changes in the external environment, changes in the e-commerce ecology and the rise of offline mass sales snacks have triggered changes in the company." ”
"China has entered an era of unprecedented consumer transformation. In October 2023, Zhang Liaoyuan analyzed in an exchange, "Now that traditional e-commerce, Douyin, Pinduoduo, Meituan, WeChat private domain, snack collection stores and Sam's Club are all open, the bottom factor is cost performance." ”
The first step to self-help is to figure out the strategic direction. At the end of 2022, the three squirrels made a clear strategic transformation for the first time - "high-end cost performance", and this strategy has been implemented since March 2023.
In the author's view, as a brand enterprise, the three squirrels want to release two signals: first, by improving management efficiency and cost control at the supply chain end, so as to achieve a balance between corporate profits and product prices; second, strengthen retail attributes, create a "full category + omni-channel" business model, in this mode slowly grow a new growth curve.
A person in the snack circle who is familiar with the three squirrels believes that "so far in 2023, the three squirrels have actually done two main things: first, to switch to Douyin online, and second, the entire strategy has been adjusted to 'high-end cost performance'." And these two are actually combined, in short, after opening the book cost-effective, go to online channels with more 'traffic', and at the same time explore more 'traffic' mass snack stores. ”
After perceiving the change in market water temperature, there are obviously more than three squirrels in leisure snack companies seeking transformation. For example, on November 27, 2023, BESTORE, the "No. 1 stock of high-end snacks", made the biggest personnel and business strategy adjustment since its establishment 17 years ago: first, Yang Yinfen was elected as the chairman and general manager of BESTORE for the change of leadership, responsible for daily business affairs, and second, the price reduction was announced for the first time since its establishment, with an average price reduction of 22% for 300 products and a maximum reduction of 45%. On December 28, it announced the launch of a new round of price cuts.
Judging from the data, the transformation of the three squirrels in 2023 has achieved preliminary results. On the evening of January 15, Three Squirrels released a performance forecast for 2023, announcing that it is expected to make a profit of 200 million yuan ~ 220 million yuan in 2023, a year-on-year increase of 54.97% ~ 70.47%. Three squirrels said: "Since June, we have achieved sustained and stable revenue growth, especially in the fourth quarter of the New Year's Festival, and still achieved double growth. ”
However, the exam questions in front of the three squirrels still exist: squeezing into the next cycle, what things do the three squirrels need to "clear"? and what advantages should they magnify to develop new skills?
An unexpected explosion on Douyin: macadamia nuts
"You see that we will make 300 million in 2020 and 400 million in 2021, and in 2022, it seems that we have to admit the reality that some things have not worked. Zhang Liaoyuan said bluntly to Tiger Sniff, "We are really bitter in 2022. ”
In 2022, sales plummeted by more than 2 billion yuan, and negative reports followed. In the first few months of 2023, the biggest challenge for the three squirrels was the general lack of confidence in the team.
"As a manager, I should find an entry point as soon as possible for the team to find confidence and regain their combat effectiveness. Zhang Liaoyuan told Tiger Sniff that in 2023, the company will propose "small changes, small units, and small achievements", hoping that each member can build self-confidence little by little. And the biggest breakthrough point is an unexpected explosion of macadamia nuts on Douyin in April 2023.
At the beginning of 2023, the global market for macadamia nuts is in excess of demand, and the cost of raw materials is almost halved. After a round of fermentation, a few weeks later, the daily sales reached one million. A talent with less than 40,000 fans began to bring the product on April 1, and the company's monthly sales exceeded one million yuan, and the company's owners were quite shocked by this.
This is undoubtedly the "entry point" that manager Zhang Liaoyuan needs, and he can't ignore this "unexpected success".
Zhang Liaoyuan said that this incident reminded him of Drucker's words: business managers should ask themselves a few questions: if it is used, where will it take the enterprise? What can the team do to turn it into an opportunity? Zhang Liaoyuan said.
After the daily sales of macadamia nuts exceeded one million orders on Douyin, he hurriedly brought in the relevant person in charge to hold a review meeting. They found that in the past, the sales peak of the three squirrels on Douyin was almost always when the inventory was cleared. "With such a big plate as Douyin, do the three squirrels that have been precipitated for 10 years have the ability to 'roll' cost-effective? ”
Immediately afterwards, the company carried out a reflection from top to bottom: first, face up to the three squirrels in the past, many products were indeed expensive, and once there is a cost performance, it will be competitive in Douyin and Pinduoduo, and it will also be competitive to open offline stores; second, the biggest burden of the three squirrels is the halo of the brand, which is dazzling enough to hide all mistakes, and has become the biggest reason for the more expensive it is, "For example, we dare to take the store with 1 million rent in the mall"; Third, we must start to face up to Douyin and Pinduoduo channels in terms of attitude and behavior, and carefully analyze the brands that have grown up on these two platforms that "looked down on in the past" but have outstanding sales performance.
After this thorough reflection, the team became clearer about "who I am": Three Squirrels is essentially a retail company, and should do everything possible to provide products with guaranteed quality, cheap and rich categories under the premise of following the characteristics of the retail industry (balancing cost, efficiency, and experience).
When the strategic direction of "high-end cost performance" is clear enough, how to implement it has become a difficult problem. "Strategy cannot be doubted because the tactics are not executed properly. Zhang Liaoyuan said that there is only one way to implement tactics thoroughly - coordination, all coordination.
One of the meanings of "collaboration" is to simplify the product go-live process. In the past, the process of launching a new product of Three Squirrels involved 17 steps, but now there is only one link, which is to look at a table that lists the tasks of the participants and their responsibilities. Another meaning is to merge the product team and the sales team, that is, "product and sales integration", with sales as the leader and products as the support; the product team must understand sales, and the sales team must understand the product.
For the "integration of product and sales", Zhang Liaoyuan was deeply touched. At the beginning of the company's establishment, the team was only 5 people, and in fact, what everyone was doing can be described as "product and sales integration". "Today, we are engaged in the integration of product and sales, and I found that many product managers and salespeople do not know each other at all. In the past, the product team would say that my product was good, and whether it could be sold was the problem of your channel, and the channel would say that it was because of the high price of your product. Now, the two sides are thinking about how to sell the product together. "In the past, the product department and the sales department held separate meetings, but now the company's regular meetings only have product sales meetings.
In fact, before the implementation of the "integration of product and sales", the three squirrels took a detour in designing an organizational structure that adapts to the business model. It once learned the management model of an international FMCG company, "but the more it learned, the more problems it had". Because this model is a product of the industrial era, the organizational division of labor emphasizes the process, in other words, do one to do one, do not care about two, obviously it is not suitable for the three squirrels - the core business is still e-commerce, requiring rapid response. "A lot of times we use the means and forget the end. ”
Organizational change, change is hard, and it's hard to grasp what doesn't change. In Zhang Liaoyuan's view, the responsibility of enterprise managers has always been mainly these three points: first, to understand the general direction, second, to respect all the innovative behaviors of employees under this general direction, and finally, to be a good dredger, so that the work of various departments is easier and the docking is easier. "Why are many people tired at work? Why are large companies prone to internal friction? Isn't it just that there is a lack of communication between people, departments and departments? The same is true for meetings, if you have something to say, if you don't have something to say, don't say it, and then the meeting is dismissed. ”
Seeing the breakthrough, the "muscles" are no longer stiff, and it is not so difficult for the company to run.
The Battle of Douyin: Explosive Products, Scale and Supply Chain
Macadamia nuts have not only become a popular product of Three Squirrels in the Douyin channel, but their offline sales performance is also bright enough. The three squirrels revealed that within 8 months of the launch of Douyin in April 2023, the highest sales of macadamia nuts with a single product link reached more than 4.5 million orders, and the cumulative sales of Douyin exceeded 95 million yuan. According to the data provided by Tiger Sniff, in the second half of 2023, the proportion of offline sales of three squirrel macadamia nuts 100g/bag ranked first in the category of macadamia nuts, and the number of sales of this product also ranked first in the sales list of three squirrel products.
Source: Win now
In 2023, three squirrel macadamia nuts will be able to sell well on Douyin, and the "synergistic" role played by more than 67,000 delivery experts cannot be ignored. Behind the crazy three squirrel macadamia nuts, some changes in the Douyin e-commerce ecosystem in the past three years are reflected.
In the words of "Rat Little Crazy", the person in charge of the short video e-commerce of Three Squirrels, "In the past few years, it was mainly 'brand-based play', and now the way to play is how to better distribute valuable goods with the help of talents at all levels." ”
According to Tiger Sniff, since the three squirrels entered Douyin in April 2020, in addition to cooperating with head influencers to bring goods, they are also exploring brand self-broadcasting. In 2020, it will have accumulated more than 1,000 live broadcasts on platforms such as Douyin, Kuaishou, Tmall, and JD.com, with cumulative sales exceeding 100 million yuan.
In 2021, the trend of brand self-broadcasting on the Douyin platform is becoming more and more obvious. According to the data disclosed at the 2nd Douyin E-commerce Ecological Conference in 2022, the GMV of Douyin e-commerce in 2021 increased by 3.2 times year-on-year, among which the contribution of influencers and brand self-broadcasting to GMV has been evenly divided in Q4 of 2021. During the New Year's Festival in January 2021, its Douyin self-broadcast business completed sales of 65 million yuan in 20 days, ranking first in the food sector and third in the whole track (the first and second places are Peacebird and Xiaomi, respectively).
In 2022, when reducing costs and increasing efficiency has become the main theme of enterprise development, coupled with more and more small and medium-sized talents entering Douyin, KOC (waist and tail talents) distribution has stolen a lot of the limelight from the top influencers and brand self-broadcasts.
According to the data of Cicada Mother, in 2022, Douyin will show the characteristics of "popularization", and the number of influencers with less than 1 million fans will account for 99.3%;In 2022, the number of brands with more than 2,000 cooperative influencers will increase significantly, with a year-on-year growth rate of 274.9%, most of these brands are in food and beverage, daily necessities, kitchen and bathroom appliances, In 2022, the number of brands with tail influencers (less than 10,000 followers) and small influencers (between 10,000 and 100,000 followers) will grow the fastest, with year-on-year growth rates of 34.3% and 27.4%, respectively. In April 2023, Xinbang issued an article stating that after observing the TOP10 ranking of the number of people associated with Douyin stores from January to March 2023, it found that the basic choices for KOC distribution are white labels and small and medium-sized brands.
The most typical beneficiary of KOC distribution is the health food brand Nordland. Before Double 11 in 2020, it established the Douyin e-commerce platform channel project team. With the help of this model, as well as the support of its own supply chain, it has started quickly on Douyin - according to its head of e-commerce, Wu Furan, publicly revealed that it achieved a GMV of 1 billion yuan on Douyin in 2021, and 2.4 billion yuan in 2022. According to Cicada Mother's data, in 2021, it cooperated with more than 100,000 Douyin influencers, and in 2022, the number is more than 300,000. According to Feigua data, from January to June 2023, in the promotion of short videos on Douyin, it focuses on placing influencers with less than 500,000 fans, accounting for 76.37%.
White labels, small and medium-sized brands take advantage of the rise (the general trend of the external environment and Douyin KOC distribution), and the three squirrels of big brands are in their eyes and anxious in their hearts. According to the 2022 financial report, its revenue on Tmall and JD platforms fell by 33% and 28% respectively. Macadamia nuts won the first battle on Douyin, and the three squirrels stepped up to build a matrix of explosive products.
Regarding the creation of explosive products on Douyin channels, the three squirrels roughly summarized three methods: first, to impress small and medium-sized talents to bring goods, and the product pricing should be consistent with the price band of Douyin's popular products. Second, products that consumers have demand but are not in sufficient supply on Douyin are more preferred. A senior e-commerce industry analyst told Tiger Sniff that macadamia nuts have almost no market share in the off-season (referring to summer) on the Douyin channel, and the sales of macadamia nuts on Douyin in 2023 are related to the launch of 19.9 yuan and 10 packs of macadamia nuts by Three Squirrels. Third, without organizing a large number of KOCs, it is difficult for brand performance to achieve breakthrough growth, and the scale effect can be exerted, requiring brands to have strong sales management capabilities.
In response to the third point, according to Tiger Sniff, the three squirrels currently have an operation team of nearly 30 people to carry out hierarchical operation of talents. According to official data from Douyin, there will be 12,200 Douyin food experts with sales of more than 500,000 yuan in 2023, and the three squirrels alone have infiltrated more than 6,200, with a penetration rate of 51%. Three Squirrels revealed that in the eight months from April 2023, Three Squirrels has cooperated with more than 300,000 delivery influencers, and the distribution business of Douyin influencers has contributed more than 400 million yuan in sales, and Douyin's self-broadcast sales have achieved 100% growth, with the corresponding figures of Dabo and Mall being 800% and 1,000% respectively.
In terms of talent cooperation, in the past, the three squirrels relied more on the head talents, such as Xiao Yang, Guangdong couples, etc., but now the company has shifted from New Year's Festival sales to daily sales, and more are connected to the waist and tail talents, and the brand's voice is greater, and the daily sales are more stable. "This conference is more for small and medium-sized talents, and the Spring Festival in 2024 is the first Spring Festival after three years of the epidemic, and we are ready for ourselves, and at the same time, we have to show our achievements and attitudes to stimulate their combat effectiveness. Zhang Liaoyuan said.
These results are inspiring enough for the three squirrels who have suffered heavy losses in 2022. However, in this huge Douyin battle, did the three squirrels make money? In the online channel, the three squirrels have changed from the top brand of Tmall to the top brand of Douyin, will its value recognition be greatly improved?
In this regard, Zhang Liaoyuan replied: "Where there are people, you can sell goods, and if people are on Douyin, the three squirrels can't get around Douyin." It takes a process to make money, and the most fearful thing is that you don't even have the courage to hug. "After every battle, after embracing a channel, the company needs to think about what I can get under the surface?" In other words, scale is not a barrier, scale is an important means of forming a barrier. He reflected that when the three squirrels reached the peak of more than 10 billion yuan in revenue in 2019, the biggest problem was that "scale was used as a barrier" and the supply chain was not consolidated through scale.
Like the three squirrels, BESTORE has also begun to adopt the practice of "taking care of the scale first, then the profit" for some popular products. In order to buy room for product price reduction, both companies have chosen to "squeeze water" from the supply chain. The three squirrels adopt the practice of "one product and one chain", that is, a product has an exclusive chain, and each link is dismantled to see its input cost, such as being so meticulous that even the 5 cents of tape must be assessed, "After combing it down, we found that we were too wasteful before." In November 2023, he gave the example of pistachios when communicating with Tiger Sniff, "As long as it is a new product in the United States, the taste difference is not big, I will go to the market to compare prices", the province saved.
If you don't "waste" the energy of Douyin's explosive products, you will have the opportunity to leverage omni-channel growth. In 2023, Three Squirrels proposed the "Douyin + N" plan, that is, to focus on Douyin as the market to promote omni-channel development. "Douyin has content attributes, and while it contributes to sales, it has a content influence on the whole network. We will continue the popular products on Douyin to be distributed across all channels, so that the closed loop will be passed. Zhang Liaoyuan said. As mentioned above, macadamia nuts are outstanding in online and offline sales, which is an example.
The financial report of Three Squirrels for the first half of 2023 disclosed the revenue of the Douyin channel for the first time, and the revenue of the Douyin system in the first half of the year was 436 million yuan, a year-on-year increase of 28.61%. The company said that Douyin, as a key channel, has shifted from New Year's sales to sustainable management based on large single products. In the first half of the year, the company's revenue was 2.893 billion yuan, a year-on-year decrease of 29.67%, and the net profit attributable to the parent company was 154 million yuan, a year-on-year increase of 87.03%. Will the three squirrels bottom out?
The New Year's Festival is coming, and various leisure snack companies are working hard. There is new news on the Douyin platform: on January 11 this year, the total sales of the three squirrels Jia Nailiang's super product endorsement exceeded 110 million yuan, breaking the single-day brand special record in the Douyin food industry, among which the sales of Huanyue nut gifts exceeded 52.82 million yuan, breaking the sales record of a single link of the brand, becoming the first and only session of the Douyin New Year Festival to break 100 million yuan. The explosive power of cost-effective products on the Kuaishou platform should not be underestimated - on January 13, the sales of a single pit single link of the three squirrels Simba New Year's Festival exceeded 100 million yuan, setting a historical record in the food category of the live broadcast industry on the whole network.
Douyin e-commerce is evolving, and the three squirrels in Douyin e-commerce are still running.
Unfinished Challenge: Fight Again Offline
Compared with online, the three squirrels are far from being called the "leader" offline, and their offline expansion has taken a tortuous road.
Three Squirrels' financial report for the first half of 2023 shows that there are two main reasons for the decline in the company's revenue, one is that its revenue on traditional e-commerce platforms is still declining, and the other is that offline stores continue to decrease;
In 2023, the three squirrel stores will be greatly optimized. At the end of 2022, Three Squirrels opened 23 directly-operated food stores, contributing 457 million yuan in revenue, accounting for 6.27% of total revenue, and 538 alliance stores, with a cumulative revenue of 487 million yuan, accounting for 6.68% of total revenue. By the end of June 2023, there will be only 1 food store left, and 316 alliance stores left. With the optimization of stores, its performance contribution has also decreased accordingly - in the first half of 2023, the revenue of the food store will be 53 million yuan, and the revenue of the alliance store will be 99 million yuan.
Trekking to 2022, the three squirrels failed in the first offline battle, and the offline exploration in the past 6 years can be described as "extensive expansion". Taking a larger number of alliance stores as an example, in 2021, three squirrel franchisees revealed that the price of products in alliance stores is generally higher than that of directly operated food stores, and the company has not been able to supplement the refined operation of offline multi-category SKUs, and it is difficult for them to survive unless there are large customers or corporate group buying business.
Since 2022, the snack industry has not been calm, and mass snack stores are one of the "catfish". According to the research report of Founder Securities, about 250 mass-selling snack stores will be opened across the country in 2021, and the number will be nearly 8,000 in 2022. According to iiMedia Research, as of October 2023, the number of snack collection stores in China has exceeded 22,000.
The mass merchandising snack track is hot, attracting a multi-party scuffle: there are leading mass merchandising snack chain brands fighting together, such as Snacks is very busy and Zhao Yiming Snacks announced a strategic merger in November 2023, with a total of more than 6,500 stores after the merger of the two sides; there are cross-border players entering the game, such as Wanchen Group, a leading edible fungus company, entered the mass merchandising snack industry in August 2022 and now has more than 4,000 stores through a series of mergers and acquisitions; and there are also old snack players, such as BESTORE launched the mass merchandising snack store brand at the end of 2022"Snack stubborn", such as Miss You so much, Yanjin Shop, Snack is busy, Zhao Yiming Snacks jointly signed a strategic cooperation investment agreement on December 18, 2023 - Snack is Busy Group received a new investment of 1.05 billion yuan. The northern Wanchen Group and the southern snack group are very busy and are entering each other's hinterland, and the "battle for 10,000 stores" has begun.
Every channel change is a phased reshuffle, and in order to open up new growth points, the three squirrels of snack veteran players must also actively respond.
After the food store and the alliance store, the three squirrels opened the first batch of community snack stores in Anhui in June 2023 and fought offline. At present, the Three Squirrels Community Snack Store has opened more than 180 stores, and the official said that it is currently expanding stores in Anhui, Jiangsu, Zhejiang and other provinces. For example, on October 14, 2023, 37 stores in Zhejiang will be opened, and the official revealed that the cumulative sales of the stores on the second day of opening exceeded 4 million yuan, and the sales of the two stores reached 100,000 yuan on the first day.
"After our (Wuhu) Golden Eagle store reopened in June, I stayed there every night for several weeks and found that some adults would tell their children not to go in, three squirrels were too expensive. Zhang Liaoyuan recalled that this scene left a deep impression on him. "In the minds of users, three squirrels have become an expensive thing, which is obviously not in line with today's times. ”
Wuhu Golden Eagle Store is Three Squirrels' first community snack store and its first physical store opened on September 3, 2016. The difference is that for the former, more affordable products are the only protagonists, while the latter is positioned as a conceptual experience store. The data available for comparison is that the former store covers an area of about 200 square meters and its sales exceeded 850,000 yuan in 11 days of opening, while the latter has a store area of 300 square meters and sales of 2.4 million yuan in the first month of opening.
Three Squirrels Community Snack Shop, Source: Three Squirrels
How does Three Squirrels' community snack store differentiate itself from a mass snack store?
In terms of price, Zhang Liaoyuan said that the proportion of white-label goods in mass snack stores is more than 60%, and the low price of the low price band is done, and the three squirrels should do the low price of the whole price band, and set a gross profit red line for themselves. There is a product selection and pricing principle called "two selections and three benchmarks" within the company, "two selections" refers to the selection of products with quality assurance and market share; "three benchmarks" refers to "the price is far lower than that of expert brands, much lower than those of brands in the same industry, and close to low-end brands".
To give a few examples: macadamia nuts, the three squirrels community snack shop sells for only 29.8 yuan per catty, only half the price of the freshly made roasted goods store; air-dried duck neck, the three squirrels community snack shop sells for 5.6 yuan, even if it is a mass merchandiser snack shop, it sells for 5.9 yuan or 6.5 yuan; dried mangoes, sold in the store for 29.8 yuan per catty, and 27.8 yuan per catty after peeling and weighing.
In terms of products, the Three Squirrels Community Snack Store has more than 1,500 SKUs, and the products tailored to the store account for 70%. For example, Three Squirrels Daily Nuts 500g is a store-made product. Comparatively, the current snack stores on the market generally provide more than 1,000 SKUs, while the number of SKUs in stores that are busy with snacks is as high as 1,600.
Zhang Liaoyuan admitted that at this stage, the category richness and adhesion of the three squirrels are not enough. So how to solve this problem? According to Tiger Sniff, there may be four or six in the future, such as 10% of water drink brands, 20% of big brands, 10% of regional brands and 60% of its own brands. According to grassroots research, among snack stores, only about 30% of brand products with low gross profit margin are mainly used to attract traffic, while white-label products with high gross profit margin are expected to account for more than 60%, contributing to the main profit of stores. It has been reported that snacks are very busy, and stores use low-cost drinks and water to drain traffic, and the main profit comes from bulk snacks. Even the most popular white-label products in the market's mass-marketed snack shops, Three Squirrels are ready to be actively compatible. ”
In terms of store area, the store area of the Three Squirrels Community Snack Store is about 120-150 square meters, the average store area of the food store is 200 square meters, and the average store area of the alliance store is 50-80 square meters. Looking at the snacks are very busy, their store area is generally more than 120 square meters.
In terms of site selection, the three squirrels go in the opposite direction, tending to conquer the non-community business district in the high-line market first, which Zhang Liaoyuan calls dangerous, "The layout is scattered and difficult to fight, as long as you occupy it, others can't enter, which is an opportunity for the three squirrels." "Snacks are very busy distributed in 10 provinces and cities including Hunan, Jiangxi, Hubei, Guizhou, Guangxi, and Guangdong, excluding Beijing and Shanghai, and the stores are mainly located in large residential communities or mature business districts.
In the mass snack track, low prices drive scale expansion, which means that only when the scale is reached is sufficient can profits be won.
Taking the snack stubborn home launched by BESTORE as an example, at the results conference for the first half of 2023, BESTORE said that the profit of the snack stubborn home can only be basically flat, because it entered the snack business format late and has not yet formed a scale advantage, and there will be a scale effect after more than 500 stores. In the first three quarters of 2023, the revenue of this business segment was 4.507 billion yuan, the net profit was -121 million yuan, the overall operating cost was as high as 4.493 billion yuan, an increase of 1371.39% year-on-year, and the sales expenses were about 250 million yuan, an increase of 5541.06% year-on-year. The three squirrels are of course also in the running scale stage.
In the final analysis, the mass snack track fights for the supply chain, operational capabilities, and cash flow management capabilities.
"2022 is a fake 'volume', in 2023, if you don't do it again, I'm going to die, and in 2024, you know that if you can do it, you have to really do it. At the beginning of December 2023, Zhang Liaoyuan posted such a circle of friends: "volume" brings out competitiveness, "suffering" comes out of cognition, "difficult" becomes easy, and "heavy" is the root of lightness.
In his office in Wuhu on December 20, 2023, he told Tiger Sniff: "People only believe in things that have results. Now at least we can see the results of Douyin, three squirrels are the number one snack brand. More than 100 community snack stores have been opened offline, and we have already obtained tickets to the mass sales snack track. ”
In the woods, the smoke of the "price war" has spread, and the three squirrels will continue to jump in such an environment, looking for their own food.