Three Squirrels is one of China’s most successful online snacking brands and has enjoyed continued success since first bursting onto the scene in 2012, even throughout the COVID-19 pandemic and subsequent economic downturn.
The firm is well-known for its marketing presence across both social media as well as various successful television drama series, driving it to further heights and recognition after it became IPO-listed in 2019.
Most companies with this level of success tend to eye overseas expansion as a natural next step – but although the firm does have some foreign presence via distributors, its Director and General Manager of Short Video E-Commerce Guangyu Guo has revealed that this is not on the cards for them in the near future.
“The snacking market in China is very mature now, and snacks are pretty much integrated into consumers’ daily lives – which pretty much means that a great deal more effort needs to be put into continuous innovation to meet consumer needs,” he told FoodNavigator-Asia after speaking at the recent Food and Beverage Innovaiton Forum (FBIF) 2024 event in Shanghai, China.
“We used to only focus on the online platform, but now our supermarket and convenience store platforms have also seen significant success, and coupled with the advancement of logistics at low cost locally, there is still a lot of opportunity to grow.
“In terms of going overseas, the thing is that the entirety of South East Asia for example is still a smaller market than China, and logistics and other matters would increase the challenges too, so for us any plans to formally expand in foreign markets will probably be around three years into the future – for now we will focus on the local market.”
One area that the brand intends to expand on in China is the development of affordable products for the masses, a shift away from the premium, high-quality image of its trademark range.
“The state of the economy in China right now is not as good as it was previously, so we believe there is a need to innovate some new brands and products in order to meet current consumer needs such as affordable choices,” he said.
“This of course does not mean lower quality, but can be via a myriad of strategies such as product innovation and investment in the way of supply chains and larger store presence to ensure efficient utilisation across more supply chains.
“The aim for us this year is to get 50% of our sales and revenue from online and 50% from offline – given our strong online presence, there will be a lot of focus on offline development in the near future.”
Flexibility flex
Guo also highlighted that one of the reasons for Three Squirrels’ rapid success has been the firm’s willingness to allow flexibility in its product innovation across platforms, without compromising the actual product.
“Going from online to offline has meant that the products have needed to also adapt accordingly based on what consumers on different platforms are looking for, and the most obvious item here is in terms of packaging formats and sizes,” he said.
“Taking a packet of walnuts for example – on TikTok consumers will watch an influencer and purchase larger packages at a time at around CNY19.90 (US$2.74) due to the way the supply chain works, but in-store with the packet readily available and accessible to them they tend to want smaller, one-serving packets at around CNY4 (US$0.55).
“The raw material, the nuts, needs to be the same but the packaging and the format absolutely needs to be flexible to adapt to different needs across different channels, otherwise there is no chance for a brand to enter multiple channels much less survive for long-term across multiple platforms.”
