{"id":12642,"date":"2020-04-27T11:21:42","date_gmt":"2020-04-27T15:21:42","guid":{"rendered":"https:\/\/digital.hbs.edu\/platform-digit\/submission\/three-squirrels-how-chinas-largest-snacks-retailer-react-to-covid-19\/"},"modified":"2020-04-27T11:21:42","modified_gmt":"2020-04-27T15:21:42","slug":"three-squirrels-how-chinas-largest-snacks-retailer-react-to-covid-19","status":"publish","type":"hck-submission","link":"https:\/\/d3.harvard.edu\/platform-digit\/submission\/three-squirrels-how-chinas-largest-snacks-retailer-react-to-covid-19\/","title":{"rendered":"Three Squirrels: how China\u2019s largest snacks retailer react to Covid-19"},"content":{"rendered":"<p><strong>Company Introduction <\/strong><\/p>\n<p>Three Squirrels is a snack company starting from online shopping on Alibaba and JD.com in China. Founded in 2012 by Zhang Liaoyuan, and IPOed in 2019, Three Squirrels created a legend of selling $14 million nuts within in 20 mins. It currently has over 500 SKUs, includes nuts, baked snacks and meat snacks, with annual sales around 10 billion RMB ($ 1.6 billion dollars) in 2019.<\/p>\n<p>Three Squirrels literally means the three squirrels: little cool, little beauty and little cheap. Using the cute and vivid image of squirrels, the company draw lots of attention from customers and made great marketing campaign to promote the brand.<\/p>\n<p><a href=\"https:\/\/d3.harvard.edu\/platform-digit\/wp-content\/uploads\/sites\/2\/2020\/04\/2-2.jpg\"><img loading=\"lazy\" decoding=\"async\" class=\"aligncenter  wp-image-12636\" src=\"https:\/\/d3.harvard.edu\/platform-digit\/wp-content\/uploads\/sites\/2\/2020\/04\/2-2-1024x487.jpg\" alt=\"\" width=\"520\" height=\"248\" srcset=\"https:\/\/d3.harvard.edu\/platform-digit\/wp-content\/uploads\/sites\/2\/2020\/04\/2-2-1024x487.jpg 1024w, https:\/\/d3.harvard.edu\/platform-digit\/wp-content\/uploads\/sites\/2\/2020\/04\/2-2-300x143.jpg 300w, https:\/\/d3.harvard.edu\/platform-digit\/wp-content\/uploads\/sites\/2\/2020\/04\/2-2-768x365.jpg 768w, https:\/\/d3.harvard.edu\/platform-digit\/wp-content\/uploads\/sites\/2\/2020\/04\/2-2-1536x731.jpg 1536w, https:\/\/d3.harvard.edu\/platform-digit\/wp-content\/uploads\/sites\/2\/2020\/04\/2-2-600x285.jpg 600w, https:\/\/d3.harvard.edu\/platform-digit\/wp-content\/uploads\/sites\/2\/2020\/04\/2-2.jpg 1717w\" sizes=\"auto, (max-width: 520px) 100vw, 520px\" \/><\/a><\/p>\n<p>&nbsp;<\/p>\n<p><strong>Influence due to Covid-19<\/strong><\/p>\n<p>The corona virus outbreak created both opportunities and challenges to snack companies, including Three Squirrels.<\/p>\n<p><strong>\u00a0<\/strong><\/p>\n<ul>\n<li>Positive influence: More and more people stay at home, which promoted the sales of instant food and packaged food, epically instant noodle, snacks generally.<\/li>\n<\/ul>\n<p>&nbsp;<\/p>\n<ul>\n<li>Negative influence: The logistic was stopped, which reduce e-commerce platform reducing sales volume right after the outbreak. Since Jan 24<sup>th<\/sup>, one day before Chinese New Year, and one day after Wuhan transportation was stopped due to Covid-19, the sales volume of snacks online only delivered 0.67% year-on-year growth. From Jan 31<sup>st<\/sup> to Feb 6<sup>th<\/sup>, the sales online reduced 31.92% compared with the same time last year.<\/li>\n<\/ul>\n<p>&nbsp;<\/p>\n<p><strong><em>Three Squirrels<\/em><\/strong><strong>\u2019 Reactions to Covid-19<\/strong><\/p>\n<p>Reacting to the breakout of Covid-19, Three Squirrels took out below changes:<\/p>\n<ul>\n<li>Focusing online store, by increasing SKUs.<\/li>\n<\/ul>\n<p>80% of sales comes from online sales in 2018. To meet with the needs of having multiple snacks when quarantined at home, Three Squirrels decided to increase SKUs, such as ready to cook hotpot, bread, biscuits and multi nuts.<\/p>\n<p>&nbsp;<\/p>\n<ul>\n<li>Launch Food delivery service from Feb 27<sup>th<\/sup> 2020<\/li>\n<\/ul>\n<p>From 2016, Three Squirrels started to open offline stores to provide extended customer experience and better customer service. The customers in store could see cute squirrel-toys, watching fancy videos and try products. Until end 2019, there are over 300 stores offline in China.<\/p>\n<p>From Feb 2020, most stores stopped due to the corona virus, but the offline customer data is still there. Using those customer data, the company started to cooperate with Ele.me and other food delivery companies in China, to provide delivery service to customers. Customers who used to go to offline stores could order from delivery platform and get products within a few hours.<\/p>\n<p>&nbsp;<\/p>\n<ul>\n<li>Extension of membership to keep customer retention<\/li>\n<\/ul>\n<p>Many customers were quite loyal with Three Squirrels.\u00a0 Among the top 3 snacks companies in China, Three Squirrels enjoyed the most loyal customers from 2012. To keep customer retention rate, Three Squirrels decided to extend membership by one more month. For people having membership in stores in Hubei province, they could get 2 more months membership.<\/p>\n<p>&nbsp;<\/p>\n<ul>\n<li>Extremely customer service<\/li>\n<\/ul>\n<p>The customer service of Three Squirrels was always praised by customers. During the Covid-19, Three Squirrels provide extremely customer service, including play video games with customers, free talk with customers to overcome the boring time together with its 400K customers. The daily customer visit maintain 35k per day on its T-mall store.<a href=\"https:\/\/d3.harvard.edu\/platform-digit\/wp-content\/uploads\/sites\/2\/2020\/04\/4.jpg\"><img loading=\"lazy\" decoding=\"async\" class=\"aligncenter  wp-image-12638\" src=\"https:\/\/d3.harvard.edu\/platform-digit\/wp-content\/uploads\/sites\/2\/2020\/04\/4-1024x733.jpg\" alt=\"\" width=\"429\" height=\"307\" srcset=\"https:\/\/d3.harvard.edu\/platform-digit\/wp-content\/uploads\/sites\/2\/2020\/04\/4-1024x733.jpg 1024w, https:\/\/d3.harvard.edu\/platform-digit\/wp-content\/uploads\/sites\/2\/2020\/04\/4-300x215.jpg 300w, https:\/\/d3.harvard.edu\/platform-digit\/wp-content\/uploads\/sites\/2\/2020\/04\/4-768x550.jpg 768w, https:\/\/d3.harvard.edu\/platform-digit\/wp-content\/uploads\/sites\/2\/2020\/04\/4-600x429.jpg 600w, https:\/\/d3.harvard.edu\/platform-digit\/wp-content\/uploads\/sites\/2\/2020\/04\/4.jpg 1298w\" sizes=\"auto, (max-width: 429px) 100vw, 429px\" \/><\/a><\/p>\n<p style=\"text-align: center\">Three Squirrels Offline stores<\/p>\n<p>&nbsp;<\/p>\n<p><strong>What else could <em>Three Squirrels<\/em> do?<\/strong><\/p>\n<ul>\n<li>Find the best marketing channel, such as short video platform, to reduce cost<\/li>\n<\/ul>\n<p>The 2019 report showed that the sales in 2019 reached 10 billion RMB ($ 1.6 billion dollars) in 2019, with 45.6% year on year growth. But the net profit reduced 18.8% compared with last year.<\/p>\n<p>The reduced profit was most due to the lower ROI of marketing activity to acquire and maintain customers. The cost of marketing is increasing recently.<\/p>\n<p>Covid- 19 actually provided new opportunity. More and more customers spend time on short video platform. The average daily user time in Douyin increased to over 2 hours per day recently, but the ads cost is much lower than ads on Alibaba Taobao platform. The ROI on Douyin, Kuaishou is much higher than ROI on Alibaba Taobao platform.<\/p>\n<p>&nbsp;<\/p>\n<ul>\n<li>Create fun videos of Squirrels feature<\/li>\n<\/ul>\n<p>The success of Three Squirrels is highly related to the image of Three squirrels, which are easy to remember and fun to share. Three squirrels also create social feature when people buy products. Three Squirrels had the ambition of develping Three Squirrels towards Disney direction. During the Covid-19 spread period, it is a perfect time to create a digital platform for Three Squirrels funs. I must admit that it is hard to create interesting content. But with the marketing team, and reduced video making cost, this could come true in this digital time.<\/p>\n<p>&nbsp;<\/p>\n<p>Combining the 2 suggestions above, if Three Squirrels customers and employees could make interesting \u201cThree Squirrels\u201d related videos, post on short video platform, or its own platform, to promote network effect, it will help promoting sales and strengthening brand image in this special time.<a href=\"https:\/\/d3.harvard.edu\/platform-digit\/wp-content\/uploads\/sites\/2\/2020\/04\/6.jpg\"><img loading=\"lazy\" decoding=\"async\" class=\"aligncenter  wp-image-12640\" src=\"https:\/\/d3.harvard.edu\/platform-digit\/wp-content\/uploads\/sites\/2\/2020\/04\/6-1024x498.jpg\" alt=\"\" width=\"507\" height=\"247\" srcset=\"https:\/\/d3.harvard.edu\/platform-digit\/wp-content\/uploads\/sites\/2\/2020\/04\/6-1024x498.jpg 1024w, https:\/\/d3.harvard.edu\/platform-digit\/wp-content\/uploads\/sites\/2\/2020\/04\/6-300x146.jpg 300w, https:\/\/d3.harvard.edu\/platform-digit\/wp-content\/uploads\/sites\/2\/2020\/04\/6-768x373.jpg 768w, https:\/\/d3.harvard.edu\/platform-digit\/wp-content\/uploads\/sites\/2\/2020\/04\/6-1536x746.jpg 1536w, https:\/\/d3.harvard.edu\/platform-digit\/wp-content\/uploads\/sites\/2\/2020\/04\/6-600x292.jpg 600w, https:\/\/d3.harvard.edu\/platform-digit\/wp-content\/uploads\/sites\/2\/2020\/04\/6.jpg 1605w\" sizes=\"auto, (max-width: 507px) 100vw, 507px\" \/><\/a><\/p>\n<p>&nbsp;<\/p>\n<p><strong>Reference<\/strong><strong>\uff1a<\/strong><\/p>\n<ul>\n<li>Pearly Neo. China Focus: Snacking firm Three Squirrels, convenience store trends, export news and more feature in our round-up.<\/li>\n<li>Zhenxing Li. Delivery food by Three Squirrels.<\/li>\n<\/ul>\n","protected":false},"excerpt":{"rendered":"<p>Covid-19 promoted instant food and packaged food sales, but also reduced offline sales of snacks. How did Three Squirrels react?<\/p>\n","protected":false},"author":11776,"featured_media":12643,"comment_status":"open","ping_status":"closed","template":"","categories":[105,2849,76],"class_list":["post-12642","hck-submission","type-hck-submission","status-publish","has-post-thumbnail","hentry","category-consumer-goods","category-covid-19","category-digital","hck-taxonomy-organization-three-squirrels","hck-taxonomy-country-china"],"connected_submission_link":"https:\/\/d3.harvard.edu\/platform-digit\/assignment\/digital-innovation-and-transformation-during-the-covid-19-pandemic\/","yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.3 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Three Squirrels: how China\u2019s largest snacks retailer react to Covid-19 - Digital Innovation and Transformation<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/d3.harvard.edu\/platform-digit\/submission\/three-squirrels-how-chinas-largest-snacks-retailer-react-to-covid-19\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Three Squirrels: how China\u2019s largest snacks retailer react to Covid-19 - Digital Innovation and Transformation\" \/>\n<meta property=\"og:description\" content=\"Covid-19 promoted instant food and packaged food sales, but also reduced offline sales of snacks. 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