Three Squirrels: A Case Study of Zhang Liaoyuan's Transformation from Nut IP E-commerce to Discount Snack Retail

Origin

Zhang Liaoyuan spent years managing a local nut brand in Anhui. In 2012, he keenly captured the Taobao e-commerce boom, identifying that the nut category had moderate unit prices, strong logistics adaptability, and a lack of dominant online brands at the time, leading him to found Three Squirrels in Wuhu. He pioneered brand IP-fication, integrating anthropomorphic squirrel characters into packaging, customer service scripts, and user experiences. This differentiated emotional connection allowed the brand to quickly capture consumer mindshare in an unbranded market, riding the Taobao traffic wave to explosive growth.

Milestones

Turning Points

• In 2012, Zhang Liaoyuan abandoned the traditional offline nut business to bet entirely on the Taobao e-commerce boom, using squirrel IP operations to build brand awareness in an untapped market.
• In 2017, failed food safety inspections caused the first IPO attempt to falter, forcing Zhang to shift from a pure OEM model to a supply chain transformation path involving self-built factories.
• After the 2019 IPO, during the peak of market capitalization, Zhang's overconfidence led to the rollout of thousands of offline stores, resulting in widespread losses and closures—a key event he later cited as proof that his 'first success was all luck'.
• In 2022, after revenue fell below 10 billion, Zhang launched the 'Rebirth' strategy, cutting excessive categories and loss-making stores to refocus on the core nut business and enter the discount snack track.
• In 2024, after revenue returned to 10 billion, the company pursued a secondary listing in Hong Kong while prioritizing short-video live-streaming e-commerce as its second growth curve.

Failures & Pitfalls

• During the 2017 IPO, the application was withdrawn due to repeated failures in nut product inspections regarding mold and peroxide levels, exposing fundamental flaws in the pure OEM supply chain model.
• The large-scale expansion of offline 'feeding stores' and alliance shops from 2020 to 2022 failed, with plans for thousands of stores resulting in massive losses and closures, directly causing a double decline in revenue and profit.
• From 2015 to 2017, multi-category expansion exceeded supply chain management capabilities; many new categories had gross margins far lower than the core nut business, dragging down overall profitability.
• Post-IPO, the company was overly dependent on the Tmall channel. When traffic dividends faded, the failure to timely pivot to new channels like Douyin led to a stall in online growth.
• Between 2020 and 2022, quality control issues persisted under the OEM model, continuously damaging brand trust and forcing Zhang to admit that the 'first success was just luck'.

Core Data

• 2024 Revenue：Approximately 10 billion RMB or more, returning to the 10 billion revenue level after several years (based on public data, independent verification not performed)
• 2022 Revenue：Approximately 7.29 billion RMB, a significant decline from the 2020 peak of approximately 9.8 billion RMB (based on public data, independent verification not performed)
• 2014 Revenue：Approximately 1.1 billion RMB, breaking the billion-level mark for the first time (based on public data, independent verification not performed)
• Peak Market Cap：Approximately 20 billion RMB, reached after consecutive daily limit increases following the July 2019 listing (based on public data, independent verification not performed)
• IPO Issue Price：14.68 RMB/share, listed on the Shenzhen ChiNext board on July 12, 2019 (based on public data, independent verification not performed)
• Stock Code：300783 (based on public data, independent verification not performed)
• Total Early Financing：Accumulated over 300 million RMB, covering multiple rounds from angel to Series C (based on public data, independent verification not performed)
• First Double 11 Sales：7.6 million RMB, achieved in the launch year of 2012 (based on public data, independent verification not performed)

Competitors / Peers

Three Squirrels' main competitors in the nut e-commerce track include Bestore, Be & Cheery, and ChaCha Food. Bestore's omni-channel revenue once exceeded 10 billion RMB after its 2020 Shanghai Stock Exchange listing, but it also faces pressure from fading online traffic dividends and the impact of discount snack retail. Be & Cheery was acquired by Haoxiangni in 2016 and subsequently by PepsiCo, completing an international capital exit path. ChaCha Food excels in offline channels and has deep supply chain roots in the nut and roasted seed sector. In the discount snack track, Three Squirrels faces fiercer competitors, including the massive entity formed by the merger of 'Snack is Busy' and 'Zhao Yiming Snack', as well as 'Hao Xiang Lai' under the Wanchen Group. These rivals capture lower-tier markets with extreme low prices and dense store networks, creating a direct conflict with Three Squirrels' brand-premium DNA.