Three Squirrels expects to be incorporated after reporting net profit of over $29m
This site previously reported the nut snack company posted record sales of $75m during the Double 11 Shopping Carnival in 2016, making it the largest snack brand in all Chinese e-commerce channels combined.
By the end of 2016, Three Squirrels posted a net profit of over $29m, according to the company’s WeChat account.
Chinese Industry Information shows that the total sales value of nuts through e-commerce is around $1.2bn, and nuts and seeds comprise 84% of total consumption of salty snacks in terms of volume in the country.
Likely the first Alibaba brand to be incorporated
Three Squirrels’ spokesperson shied away from commenting on the matter, but said that the company only “has a thought about being incorporated,” and did not reveal any specific plans.
Kantar Retail 2016 shows that e-commerce space is highly competitive for sweets and snack companies in China.
“Those who started as an online brand initially, like Three Squirrels [started on Alibaba], have more competitive advantages, and they impose threats to traditional products in the category,” the market research firm said.
Among the top 10 B2C e-commerce confectionery and snack companies in China, Three Squirrels leads the category with a 11.85% market share, with Western chocolate brands Ferrero (1.3%) and Mars-owned Dove (1.2%) being ranked fourth and sixth respectively, according to Kantar. Other snack companies, including B & Berry (百味草) and LPPZ (良品铺子), share a 7.3% and 4.2% of the market respectively.
A Shanghai-based market researcher speculated it will probably “take a while” before Three Squirrels becomes fully incorporated.
Currently, there is not a single Alibaba food brand that is publicly-listed, but three Squirrels has “the biggest potential to be the first,” he said.
Going offline in 2017?
The market researcher also predicted Three Squirrels will depend less on e-commerce in the future as it wants to provide more shopping experience with consumers.
“Instead of operating an online retailer through Alibaba, Three Squirrels is going to build its own IP address and brick-and-mortar stores so as to communicate with consumers more directly, and to compete with other brands in the snack category,” he said.
BakerysandSnacks has reached out to Three Squirrels’ investors, including Free S fund, IDG Capital, and Capital today (今日资本), for a comment.