The revenue of the Pincai channel increased by more than 360%, and the revenue of Doukuai Live increased by more than 1,000%. This brand is really awesome!

      I believe many sellers in the snack industry already know that Three Squirrels released their 2021 semi-annual report on August 17. The report can be said to be quite gratifying. Three Squirrels' operating income in the first half of the year was 5.261 billion yuan, a year-on-year increase of 0.17%, and net profit attributable to shareholders of listed companies was 352 million yuan, a year-on-year increase of 87.32%, and net profit attributable to shareholders of listed companies after deducting non-recurring gains and losses was 264 million yuan, a year-on-year increase of 72.10%.

      Of course, the Happiness Data is not the most eye-catching, but the channel for Three Squirrels to contribute revenue. In its semi-annual report, Three Squirrels said that the company's revenue in Pinduoduo channels increased by more than 360% year-on-year, and the revenue of live e-commerce companies such as Douyin and Kuaishou increased by more than 1,000% year-on-year.

Focus on new e-commerce and balance online channels

      360% and 1000%, both of these numbers are quite amazing. In the report, Three Squirrels also introduced the revenue and layout of its various channels in detail. For example, during the 2021 New Year Festival, Three Squirrels' live broadcast sales on TikTok reached 182 million, of which nearly 100 million contributed from live broadcast, ranking first in the food sector.

      During the 618 period, Douyin's share of live broadcasts further increased to 60%, and both self-live broadcasts and expert live broadcasts ranked first in the snack industry. It is said that more than 60% of the orders of Three Squirrels live broadcasts on Douyin adopt the manufacturer's direct delivery model, which further reduced logistics costs.

Image source online

      From the layout of Three Squirrels, it can be seen that it has basically occupied all online channels. In the past two years, Pinduoduo and Douyin have risen, and Three Squirrels have not fallen out of teams. It has opened an official flagship store on Pinduoduo, and it also has its own account matrix on Douyin. The largest number of fans in the account is 4.86 million.

      In the semi-annual report, Three Squirrels said that the revenue of new e-commerce businesses such as Pinduoduo and Douyin accounted for nearly 10% of the total online revenue, and it can be said that the development of various online platforms is constantly balancing.

Both legs must be hard on the line

      In the past six months, Three Squirrels have demonstrated the operating data of online 2C channels. From January to June 2021, the company's sales were 2.37 billion yuan, the number of orders was 27.91 million, the average order price was 84.9 yuan, the gross operating profit margin was 35.5%, and the net operating profit margin was 5.5%.

      Compared with January-June 2020, sales fell by 800 million, orders decreased by 9.98 million, average order price increased by 1.3 yuan, operating gross profit margin increased by 4.8%, and operating net profit margin increased by 3.5%.

      Three Squirrels said that the divergence of online platforms caused a decline in the number of visitors, so the company is currently continuing to implement the core strategy of "focusing on profits", actively adjusting its online operation strategy, strengthening the control of omni-channel gross profit, and continuously optimizing the category structure. The results are ideal, with the average customer price, gross profit margin and net profit margin all increased.

      From January to June this year, the operating income of the third-party e-commerce platform of Three Squirrels was 3.621 billion yuan, accounting for 70% of the main revenue. The platforms with revenue accounted for more than 10% were mainly Tmall flagship stores and JD.com self-operated, the former was 1.225 billion, and the latter was 1.184 billion.

      In addition to online, the offline sales of Three Squirrels are also good. In the first half of this year, 8 new food stores were opened, with a total of 163 stores as of the end of the month, with operating income of 573 million yuan, an increase of 21.7% over the same period last year, accounting for 10.9% of the total revenue. The gross profit margin of the food restaurant was 37.8%, an increase of 4.5% year-on-year.

      In the first half of the year, 191 new alliance stores were opened, with a total of 941 stores as of the end of the period, with operating income of 363 million yuan, an increase of 131.7% over the same period last year, accounting for 6.9% of total revenue. The gross profit margin of alliance stores was 19.3%, up 2.2% year-on-year.

Three Squirrels' business model

      As a nine-year-old company, today’s Three Squirrels position itself as a multi-brand company with omni-channel operations and full categories covering snack foods as the core. Whether it is the food industry or not, sellers can refer to the business model of Three Squirrels.

      Three Squirrels formed their own multi-brand matrix in a 1+N way. On the R&D end, we have our own internal food research institute and cooperative R&D. On the procurement and production end, we have hundreds of qualified suppliers and alliance factories. On the quality inspection end, we have a full-link food quality and safety management system. On the warehousing and logistics end, we have our own warehousing and third-party warehousing and distribution partners, and finally we will make efforts to omni-channel balance.

      To reach hundreds of millions of consumers, the paths of Three Squirrels are online channels and offline channels , while the online is mainly B2C e-commerce flagship stores, B2B e-commerce platforms, and offline channels are mainly direct stores, alliance stores, and new distribution.

      Finally, let’s take a look at the warehousing and logistics situation of Three Squirrels. Based on the large warehouse strategy, it has already owned or leased 8 distribution centers in eight central cities including Wuhu, Tianjin, Chengdu, Guangzhou, and Wuhan, including self-owned or leasing, containing 2C and 2B businesses, fully integrating high-quality resources to strengthen the radiation range of the supply chain and ensure the supply of products.

      The logistics operation model of Three Squirrels is that the warehousing business is mainly self-operated warehouses, and the trunk transportation and distribution business is mainly outsourcing. It is understood that in the first half of this year, Three Squirrels joined forces with 34 upstream suppliers to create a factory direct delivery model, which accelerated the supply speed and shortened the arrival time.