Can you learn three squirrels?

Zebra consumption Ren Jianxin

91.83%、60.80%、71.93%。

This is the achievement of the three squirrels this year, corresponding to the company's operating income and net profit attributable to the parent company in the first quarter, as well as the stock price increase in the last two months.

With the steady progress of the "high-end cost-effective" strategy, in the past three quarters, the three squirrels have achieved significant growth in revenue and profit.

This year, the three squirrels have set a clear annual goal - to return to 10 billion and become stronger in the whole country. Q1's revenue of 3.646 billion yuan has laid a solid foundation for the realization of the annual target.

The squirrel is back in full swing

In 2012, relying on a network cable, several e-commerce platforms opened stores, and in just a few years, three squirrels sold tens of billions of snacks to users across the country. At that time, the three squirrels were the most beautiful "rats" on Taobao.

2019 is undoubtedly the most beautiful time for the three squirrels. On the occasion of the 7th anniversary of the company's establishment, it successfully landed on the GEM and became the "first stock of national snacks". In the same year, the company's annual revenue exceeded 10 billion, "far ahead" in the field of domestic leisure snacks.

However, in the second year after listing, the company began to show a downward trend, and in 2022, it will go to the bottom.

However, starting from the third quarter of 2023, the company's revenue scale began to stop falling and rebound, and its performance rebounded sharply at the same time. In Q3 and Q4 of that year, the company's operating income increased by 38.56% and 29.18% year-on-year respectively, and the total contribution of the two quarters exceeded 1 billion yuan. The annual revenue was basically the same as that of the previous year, and the net profit attributable to the parent company increased by 69.85% year-on-year.

This year, the three squirrels showed even stronger growth. On the evening of the 16th, the company disclosed the first quarter report of 2024, with an operating income of 3.646 billion yuan and a net profit attributable to the parent company of 308 million yuan in the current period, a year-on-year increase of 91.83% and 60.80% respectively.

Revenue and profit have increased significantly for three consecutive quarters, and investors have obvious perception of the company's upward growth trend, and the company's stock price rose by more than 70% in just two months from February to April this year.

The significant increase in the performance of the three squirrels is the result of the company's deep understanding of the leisure snack industry and market changes, and timely strategic adjustments.

On the 17th, Zhang Liaoyuan, founder and CEO of Three Squirrels, delivered a keynote speech at the 17th China Nuts and Dried Foods Exhibition, and his views resonated with the participants.

After three years of special external environment, all industries are looking forward to the arrival of stimulus and revenge consumption. But revenge consumption did not come, all that appeared was change. Users have tightened their wallets, their brand recognition has decreased, and they no longer buy the markup.

While many people and even experts and scholars believe that there is a downgrade in China's consumption, Zhang Liaoyuan understands this change as an upgrade of consumption rationalization.

It is based on this understanding and the company's own experience that the three squirrels have come to a conclusion: in the current era, brands are not used for premiums, but for killing premiums, which is also the value of private brands.

Starting from the end of 2022, under the leadership of Zhang Liaoyuan, the three squirrels will offer the banner of "high-end cost performance" and launch a major transformation from the inside out.

Squeeze water in the whole link

Between "high-end" and "cost-effective", there is a pair of contradictions. It is almost impossible to achieve not only the high-end brand and products, but also the price advantage to attract users' purchase behavior. If you can't find a balance between the two and take into account the profits of the enterprise, "high-end cost performance" is just a slogan.

So, how do the three squirrels do it?

After more than 10 years of development, Three Squirrels has established advantages in brand, scale, supply chain and many other aspects, especially in the nut category, and has become a mental brand. These are the basics.

At the same time, the improvement of China's transportation efficiency, the reduction of logistics and express delivery costs, and the transformation of AI digital technology have all provided the possibility for enterprises to reduce their total costs.

In the era of shelf e-commerce, the three squirrels directly establish the connection between production enterprises and users through their own brands, shorten the product sales link, and win users with cost performance.

The "high-end cost-effective" strategy is still the same. Through innovative thinking and the use of advanced tools, the whole link and all elements are integrated and reorganized, the link is compressed shorter, and the water in the supply chain, circulation and other links is squeezed out, and finally users have a clear perception of the price of the product.

To do this, the three squirrels took the lead in using knives against themselves. Take the initiative to close hundreds of directly operated stores and hundreds of alliance stores. Because of the high rent and high decoration cost of these stores, the price of the products has been pushed up, which no longer meets the current market demand.

While closing traditional stores, the company will fully upgrade and build a high-quality self-owned brand community snack store in June 2023. Relying on the core brand advantages of its own nuts and the supply chain capabilities of the development of all categories, it directly customizes to high-quality factories, removes middlemen and brand premiums, and achieves high quality and excellent price. With the low price of the whole price band, the low price of the snack is measured against the low price of the snack band, and the "high-end can also be cost-effective".

Up to now, the Three Squirrels Community Snack Store has opened nearly 200 stores, and has successfully expanded stores in Anhui, Jiangsu, Zhejiang and other provinces, and will continue to deepen the layout in the future.

The efforts of the three squirrels to reduce costs are not only reflected within the company, but also extend to the whole chain of products from production to circulation. For example, after the company's products arrive at the distributor's warehouse, what kind of link will be used to reach the terminal network with the lowest cost? In the past, this should not be a question that brands need to consider. Today, the three squirrels are also working with dealers to analyze the cost structure in order to find an optimal solution. These detailed efforts are all to achieve total cost leadership and ultimately establish a terminal price advantage.

Will your peers learn?

Three squirrels believe that "high-end cost performance" is the company's experience through the darkest moment, and it has the universality of the industry.

But that's not something that other brands and businesses can learn if they want to.

For example, in the nut category, Three Squirrels has been doing it for more than ten years, building a strong supply chain system, and all its high-quality nut raw materials have been directly sourced globally. At the same time, the company, together with domestic suppliers, has successively established a nut raw material supply base in Yunnan, Guangxi, Northeast, Anhui, Jiangsu, Xinjiang and other places, and gradually realized the localization of high-quality nut raw materials.

Quantity procurement, global direct procurement, and local substitution of raw materials can take the lead in establishing an absolute cost advantage at the source of the product.

Not only that, in the absolute advantage of nuts, the three squirrels have entered the independent manufacturing link, and they can squeeze out the premium of the production and processing link.

The company's "Shake + N" omni-channel layout, under the strategy of high-end cost performance, is more conducive to the creation of explosive products. As product sales continue to grow, supply chain costs will be further reduced.

The establishment of national brand influence and core category advantages, the improvement of omni-channel operation capabilities, and the construction of a full-category development supply chain are logical.

In 2023, there will be as many as 13 100-million-level large items of the three squirrels, and as many as 14 and 87 models of 50 million and 10 million-level mid-waist explosions, respectively.

As a result, the three squirrels showed such a result: the price of the popular product was lower or much lower than that of its peers, but the company still had money to make.

How does this make other brands and other companies follow and how to learn?

For 2024, the three squirrels have set a clear goal - to return to 10 billion and become stronger in the whole country. Q1's revenue of 3.646 billion yuan has laid a solid foundation for the annual target.

It has only been more than one year since the proposal and implementation of the "high-end cost-effective" strategy of Three Squirrels, and the user's perception is far from reaching the deep stage. With the continuous deepening of the strategy, it will give the market more imagination space.