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China went “nuts” again over the Chinese nut brand “Three Squirrels”. During the passing double 11 shopping festival (双十一) in China, a shopping festival launched by Alibaba as a Chinese version of Black Friday, Three Squirrels,  again, achieved huge success: It only took them 9 minutes and 26 seconds to reach a GMV (gross merchandise volume) of RMB 1 hundred million (about USD 14.4 million), it took them 12 minutes to do so in the last year’s double 11 shopping festival. Three Squirrels was the sales champion in the food category of double 11, the world biggest shopping festival, for the 7^th time.

For people who are not familiar with Three Squirrels, the e-commerce company founded in 2012 and Three Squirrels is a brand selling nuts and eventually other snacks. Three Squirrels has already grown exponentially at the beginning of their business: compared to the 2013 annual sales of USD 52 million (RMB 326 million), Three Squirrels made USD 25 million (RMB 160 million) in January 2014 alone. In 2015, the third year of its existence, Three Squirrels had sales of USD 370 million. How does a five-person startup company become a snack giant on the Chinese market?

Power of Meng (萌: Chinese for adorableness)

The Meng Culture (萌文化) is originated from Japan and spread very fast through animation on the Chinese Internet. The word “Meng” has been extremely popular in recent years, especially among the young generation in China. Meng is more than just cute; it is more vivid yet softer. People, animal or many other things can be described as Meng, when they are adorable both in appearance and actions, and most times well-behaved and even obedient. Meng is not only an adjective but also the feeling someone/something is giving you. Actually, it is a bouquet of feelings such as melting because of adorableness and slight excitement. Meng became much more than just a word, but a phenomenon and a subculture.

Meng Culture is from the two-dimensional world; however, it has been widely accepted by Chinese people in their daily life. Three Squirrels has successfully exploited the phenomenon of Meng and created a well-liked brand, thus obtained a great economical profit.

Cute brand name with a cute brand image

Founder and CEO of the Three Squirrels brand, Liaoyuan Zhang, has decided on squirrels as their brand name because he believed anyone would be fond of adorable animals, also the image of squirrel creates a direct association with nuts.  Moreover, the image of the brand  –  three cute animated squirrels are being used as the company’s mascot, on the product’s packaging as well as in all kinds of advertisement.

Screenshots: gift box including all best-seller nuts of Three Squirrels called “a gift from the forest”.

The one-of-a-kind relation between Three Squirrels and their consumers

From the very beginning, Three Squirrels’ aim is to be the best Chinese e-commerce nut brand. The only distribution channel used is B2C. Without retailers in between, Three Squirrels is able to offer Chinese consumers better price and most importantly better consumption experience.

The founder and CEO of Chinese nut brand Three Squirrels, Zhang, calls himself “鼠老爹” (Shulaodie,  Chinese for “the papa squirrel”) and all employees are given nicknames starting with the Chinese character “鼠” (Shu: the last character of “squirrel” in Chinese). Staff of Three Squirrels speak to all consumers with the title “master/owner” (主人, Zhuren), meaning they are pets/servants of their consumers and they will always be their “maters’ companion and they will spread love as well as happiness” according to the Three squirrels’ brand feature on their official website.

No matter if it is a hotline-call or a short message in the delivery box, all employees of Three Squirrels address consumers by a master and are ready to offer the best service. It might appear quite artificial and cloying to most western entrepreneurs, however, because of the well-accepted Meng culture in China, especially among the young generation, this relation between Three Squirrels and their Chinese consumers seems to function perfectly.

“We don’t sell snacks, we innovate and create products and experiences” 

Not only is the way Three Squirrels call themselves and their consumers are unique, but also the service and all-around thoughtfulness. For most areas in China, Three Squirrels promises next-day delivery. Besides the delivery speed, all the surprises coming along are awarding consumers shopping experiences over their expectations, e.g. a packet of wet napkins clasps to close the foil packet and a paper bag for shells.

Moreover, Three Squirrels promises monthly new products for consumers by constantly innovating new tastes. From product name to packaging, Three Squirrels’ snacks are full of delightful details. All product packages are emblazoned with squirrel cartoons offering humorous or heart-warming messages for their “masters”, e.g. Macadamia nut, squirrels say: “we easily opened each other’s heart like we open the shells of Macadamia nuts.” Once in a while, Three Squirrels offers a special product like the “huge snacks gift box”, which includes 30 different types of Three Squirrels snacks. Squirrels say: “don’t know what kind of snack you want to eat? Just one last package before quitting snacks? You need this.” Maybe we can provide a link to the video ad?

Screenshot: Three Squirrels’ Tmall shop, sold 131,515 bags of “huge snacks gift box” in the last 30 days

Screenshot: Three Squirrels Tmall shop

The future of Three Squirrels: generating interactions and further bonds with consumers

With a huge year-on-year growth pace, Three Squirrels are constantly searching for the right way to move forward. Papa Squirrel Zhang sees the future in a strong brand image and the bonding with consumers. That’s why he decided to go offline, they call their brick-and-mortar shops ‘feeding store’ (投食店). “The main purpose of building offline stores is not the economic profit but offering a unique experience for our consumers. If they come to the shop, they get to know us, and the interaction is being established.” Says Zhang. In a so-call feeding store, consumers can taste different types of snacks and purchase them by packages or by weight. Consumers can also find products which are not available online, e.g. smartphone protection case with squirrel figure or stuffed squirrels.

As for the future plans, another big project of these Chinese nut brand Three Squirrels is Squirrels’ Town (松鼠小镇). The amusement park is still under construction and expected to open in May 2019.

Three Squirrels’ feeding store

Author: Chencen Zhu

Daxue Consulting can help with the analysis of any market in China, including the nuts and snacks market

Daxue Consulting, as a market research company, provides the adapted data in one of the most challenging markets in the world, China.  We have a wide range of services to deliver competitive market research. To know more about the nuts and snacks industry in China, do not hesitate to contact our project managers at dx@daxueconsulting.com.