I read "Internet celebrity products, beauty is easy to age": From the rise and fall of three squirrels, thinking about the strategic turning point of business operations

[](https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiZhh2kCmqviiwAHMuG7d8uDMIUWvtaB4Y-LM4CP_uALnPhpKccWofeSL6Yg-OhWJy068-XGzPXX WpKSz-YAjh7HhYbQTGGHEck8d1h3GFicmmKShDxGmtXSgMWRHxNeD1uztzAuZ-bCooH/s 1280/%25E4%25B8%2589%25E9%259A%25BB%25E6%259D%25BE%25E9%25BC%25A0.jpg)

Photo by Louis Paulin on Unsplash

Three Squirrels Co., Ltd. is operated by “Daddy Squirrel” [Zhang Liaoyuan](https://baike.baidu.com/item/%E7%AB%A0%E7%87%8 E%E5%8E%9F) was founded in 2012 and is headquartered in Wuhu, Anhui. It is the first company in China to position itself as a pure Internet food brand and is currently the largest food e-commerce company in China. Its main business covers nuts, dried meats, dried fruits, puffed and other snacks. On July 12, 2019, Three Squirrels was listed on the GEM of the Shenzhen Stock Exchange and was known as the “No. 1 national snack stock.”

Yesterday (January 16) morning, I downloaded “[Wu Bofan·Weekly Business Review](https://www.igetget.com/course/%E5%90%B4%E4%BC%AF%E5%87%A1%C2%B7%E6%AF%8F%E5%91%A8%E5%” from the “Get” App 95%86%E4%B8%9A%E8%AF%84%E8%AE%BA?param=rkQhZs7f6x&token=5L9DznlwYyOVdwasz9KmbWABv0Zk4a)》It was very interesting to read a column titled “Internet celebrity brand beauty ages easily, where will the three squirrels go?”.

The reason why I am particularly interested in this article is not only that we are now in an era of Internet celebrities, but also because as early as eight or nine years ago, I already knew about this newly emerging online food brand on the other side of the country.

The rise of the three squirrels

If you are not familiar with Three Squirrels, a food brand famous for its nuts, let me quickly review its history:

On February 16, 2012, five entrepreneurs founded Three Squirrels in Wuhu, Anhui. It soon received a US$1.5 million Series A investment from IDG Capital in March, and then received a US$6 million Series B investment from Today Capital in May. On May 30, they completed the construction of their headquarters and factory in Wuhu National High-tech Zone, with more than 50 team members.

On June 19, the trial operation was launched on Taobao (Tmall Mall), and it took only 7 days to complete 1,000 sales. On July 22, sales entered the top 50 in the nut category on Tmall Mall. On August 25, the 65th day after its launch, Three Squirrels ranked first in Tmall’s nut category.

Well, something even more powerful is yet to come! On November 11, 2012, Three Squirrels participated in the Double Eleven promotion for the first time, with daily sales of 7.66 million yuan, setting a new record for the highest daily sales of a single store in the Tmall food industry, and ranking first in the sales of snacks and specialty products. In December of the same year, China’s authoritative entrepreneurship and finance magazine “Enterprise State” selected Three Squirrels as one of the “Top 100 China’s Annual Innovation and Growth Enterprises in 2012.”

Three Squirrels was successfully launched in the summer of 2019, reaching the peak of its career. I don’t need to elaborate on its subsequent development! Interested friends can refer to relevant reports on Baidu Encyclopedia and Online Media.

To be honest, I haven’t paid much attention to Three Squirrels in the past few years. I thought their development was going smoothly, but yesterday I watched [Wu Bofan](https://baike.baidu.com/item/%E5%90%B4%E4% After reading Teacher BC%AF%E5%87%A1)‘s column, I was shocked to realize that this star company, which was once evaluated by the People’s Daily as “successfully making consumers develop a good habit of eating nuts and becoming the next leader in domestic products”, is now also encountering some bottlenecks and troubles.

According to Sina Finance, Three Squirrels confirmed revenue in 2019 reaching 10.194 billion yuan, a year-on-year increase of 45.61%. The net profit attributable to shareholders was 249 million yuan, a year-on-year decrease of 17.8%. It is not difficult to see from the data that Three Squirrels is in a situation of rapid revenue growth but gradually declining profits.

Wu Bofan The teacher pointed out that Three Squirrels can be regarded as a typical internet celebrity company. Generally speaking, the time for an Internet celebrity company to become famous is very short, but its time to be famous is really not that short. It was established in 2012 and quickly became popular online in 2013.

Compared to some start-ups that were born at the wrong time, the three squirrels were lucky enough to catch up with the timing. This is because the Taobao mall owned by Jack Ma (later renamed Tmall) was just independent from Taobao. Based on the need to support a group of Taobao brands, Tmall took a fancy to three squirrels and selected them as representatives of the first generation of Taobao brands.

In January 2013, Three Squirrels’ monthly sales exceeded 22 million yuan. Because there were not many similar competitors at the time, the company was quickly recognized as the No. 1 food sales store on the Internet.

In 2014, the annual sales of Three Squirrels exceeded 1 billion yuan. They launched the listing in 2017 and successfully listed in July 2019. The issue price was 14.68 yuan, which once reached a high price of 90 yuan per share in May 2020.

But the good times did not last long. Just half a year later, Three Squirrels’ stock price began to fall rapidly, falling to 40 yuan. What’s worse is yet to come, that is, its major shareholders IDG and Capital Today are leaving the market one after another. These major shareholders invested in Three Squirrels from the very beginning, but left shortly after it hit a new high in its stock price. This is not good news, and it also means that these major shareholders are no longer optimistic about the company.

Transformation Challenges of Internet Celebrities

Seeing this made me sigh. Did the three squirrels really fail? In fact, it is not that pessimistic. Just from recent media reports, we can know that the company has continued to work hard in recent years, not only developing new sub-brands, but also realizing the importance of offline stores, and is gradually reversing its [increasing revenue without increasing profits] (https://money.163.com/20/1028/08/FQ0UCONV00258105.html) situation.

As the saying goes, “It’s hard to start a business, but it’s not easy to keep it going.” The story of the three squirrels made me awe at business management. At the same time, I also want to thank Mr. Wu Bofan for writing this column, which gave me a deeper understanding of entrepreneurship. Yesterday, I also shared Teacher Wu’s heartfelt words on Facebook (https://www.facebook.com/iamvista/posts/10157957590129053). It is true that for business operations, the formulation of strategic turning points is really important.

Former Intel CEO Andy Grove said: “As a leader, the most important thing is to find the strategic turning point.”

Just like when you are driving on the highway, you have to understand where the exit is? But on the highway it is possible to go around, but in the business world there is no such opportunity. As later management theorists pointed out, discovering strategic turning points is not an intellectual problem but an emotional one.

An old friend [Huang Yuxiang] (https://www.facebook.com/shanejovi) said it very well: “This is an emotional issue, because strategic changes represent breaking the old and establishing the new.”

Thoughts on strategic turning points

If you are an entrepreneur or the management of a company, how should you think about and formulate strategic turning points? In addition to having a macro vision and forward-looking thinking, it is also necessary to view the enterprise as a collection of resources and strategies before making overall plans.

Let’s think about how Taiwan, which has a majority of small and medium-sized enterprises, should respond to the post-epidemic era. This is indeed not an easy question to answer, and everyone is welcome to leave a message for discussion.

In addition, I spent some time making this article into a mind map for better absorption. I hope readers will like it and get some inspiration from it! [](https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEikoRdO7HacWRPPmCrCc3RHpa-m 0DM3bIpkLmv42RZ-mZyCPJXvxMmaHhu33G0_rgvEzC-6Zlp9XdOenkMWBm2489ZRDKHfvp1C0igU5-8VI8vontiw gpu2ZKl82mvKO9PnCYV0bws0wIVC/s2048/%25E7%25B6%25B2%25E7%25B4%2585%25E7%2594%25A2%25E5%25 93%2581%25EF%25BC%258C%25E7%25B4%2585%25E9%25A1%258F%25E6%2598%2593%25E8%2580%2581-1.png)

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