Click 'Read Original' for details. On July 3, the snack brand Three Squirrels, after multiple IPO setbacks over two years, finally reached the final step of its IPO, officially conducting a new share subscription and about to enter the capital market. It is reported that this public offering of 41 million shares at an issue price of 14.68 yuan values the company at approximately 6 billion yuan. This valuation makes people think the snack industry is very profitable. Data shows that snacks currently account for nearly 30% of online food sales. Small twists sold 15 tons (2 million pieces) in 4 days; small crisps sold 10,769 pieces in 4 days; Chinese people consume 2 trillion yuan worth of snacks a year, so is the snack industry really profitable? Actually, it's not as easy as imagined. For example:

  1. What is the current market capacity?

  2. Which link is the most profitable?

  3. Among the three giants, Liangpin Shop, Three Squirrels, and Baicao Wei, which is the strongest?

  4. Where are the people who buy the most snacks distributed?

  5. What does the reconstruction of 'people, goods, and places' mean?

  6. Where are the opportunities in the snack industry now? **MobData 2019 In-depth Interpretation of the Leisure Snack Industry I. 'Small Snacks Hide Big Business' 1. Large market capacity, in early mature stage Currently, the scale of China's leisure snack market exceeds 500 billion yuan. With the improvement of living standards, the compound annual growth rate remains above 6%. The industry is currently in the early mature stage after rapid development. In this stage, enterprises engage in brand competition, leading companies begin to focus on brand building, and layout across all channels and regions. In the future, market concentration will further increase. 2. The industry chain focuses more on sales, branding, etc. The snack industry overall adopts an asset-light model. Few enterprises build their own factories; more effort is placed on R&D, branding, and sales. With the internet era, major brands have started online sales. E-commerce platforms increased from 0.3% in 2011 to 8% in 2018. In the future, brand building in the snack industry will focus on 'online retail + brand chain stores.' 3. Current KSF development in the leisure snack industry: (1) Currently, homogenization is severe in the industry. Even leading leisure snack companies do not invest heavily in R&D: For example, Liangpin Shop's R&D revenue accounted for only 0.77% of operating revenue in 2017. (2) By strengthening supply chain management, companies enhance their bargaining power upstream and midstream, thereby reducing costs and gaining a comparative advantage in competition. (3) Currently, more leading companies focus on brand marketing, including brand endorsements, TV drama ad placements, and hiring traffic stars as brand ambassadors. For example, Three Squirrels' ambassador is TFBOYS. II. Data on the 'Foodie' Map

  1. Brands mostly originate from Shanghai, Fujian, Guangdong, etc. The Yangtze River Delta and Pearl River Delta are the concentration areas for leisure snack brands.
  2. Online snack origins have distinct local characteristics, such as Xinjiang for preserved fruits and dried fruits.
  3. 'Foodies' are mainly distributed in first-tier and new first-tier cities, such as Shanghai, Wuhan, Suzhou, and other Jiangsu, Zhejiang, Shanghai, and southern regions.
  4. Users are mainly young women, mostly post-90s 'piggy girls' and post-80s mothers. They like new things, have limited spending power, and are highly price-sensitive. III. Online Leisure Snack E-commerce 'Three Giants': Liangpin Shop vs. Three Squirrels vs. Baicao Wei The three giants continue to lead the entire industry, with industry concentration steadily increasing. Three Squirrels dominates the industry's top spot; with female users as the mainstay, Liangpin Shop deeply cultivates the Central China region, while Three Squirrels and Baicao Wei focus on first-tier cities; Baicao Wei was acquired by listed company Haoxiangni, while Three Squirrels and Liangpin Shop have submitted IPO applications. The advantages of leisure snack e-commerce are obvious, and the gap between them is not large. Juewei Duck Neck, Liangpin Shop, and Three Squirrels may have more room and development potential in the future. IV. Many Players, Online Dividend Disappears, Seeking New Outlets The traditional retail industry lacks user analysis and can only manage and market through traditional models; limited by physical location and store size, SKU numbers are limited, covering only a limited user base within 35 kilometers. The online retail industry lacks an experience link. Consumers have high demands and concerns about food safety, and users cannot directly experience online food; consumers lack perception of the online supply chain, warehousing, and logistics, and cannot generate sufficient trust. V. The New Retail of the Leisure Retail Industry is Essentially the Reconstruction of 'People-Goods-Places' 1. People—Consumers are the center Consumers' demand for healthy food is gradually increasing, pursuing a healthier lifestyle. Through deep food processing, products gradually develop towards health. Segmentation for special populations, including dairy substitutes for lactose intolerance and low-calorie products for weight loss. 2. Goods—Combining online and offline, big data and high technology In the era where 'appearance is justice,' high-appearance packaging attracts consumers' eyes and purchase desire. Personalized and creative foods gradually enter people's sight. Creative and fresh products like Oreo music boxes, freeze-dried foods, and milk tea attract more attention. 3. Place—Creating new shopping scenarios Offline stores need to meet consumers' diverse needs. In addition to shopping, they must also meet entertainment, parent-child, and other diverse needs, improving consumer experience. Payment methods upgrade, including self-service shopping, unmanned checkout, AR and VR technology experiences, and instant payment. VI. The Future is Still a Blue Ocean, with Potential to Develop the High-End Market 1. The market is still a blue ocean, consumption needs further exploration Compared with developed countries, China's leisure food consumption structure is still at a relatively primary stage, and the market has huge room for improvement. In the future, with the continuous upgrading of residents' overall consumption structure, the leisure snack market will continue to develop. 2. 'High-end snacks' are expected to seize market opportunities Characteristics and differentiation are the core focus of leisure food enterprise development. In the future, more enterprises will take the 'high-end snack' route. People tend to prefer healthy, youthful, high-end customized, and meal-replacement options. **Prospective Industry Research Institute 2018 Food Industry New Retail Development Research Report I. Changes in Food Industry Retail Channels Have Begun With the development of the internet era, retail growth has hit a bottleneck. New retail channels such as brand specialty stores, chain convenience stores, and online e-commerce have become mainstream channels. The value of offline channels is being reassessed. New technologies have expanded offline scenarios, and the integration of online and offline forms complementary advantages. 'New retail' will be the new direction in the future. II. Four Characteristics of China's Food New Retail
  5. From 'goods-place-people' to 'people-goods-place,' with consumer experience as the priority, people become the first determining factor.
  6. Relying on technology to complete operational digitalization and use the Internet of Things for intelligence.
  7. Stores have experience functions, with diversified product displays.
  8. Inventory sharing, offline experience, online purchase, prepare inventory on demand, produce on demand. III. Four Dimensions of Future Development of Food New Retail 1. The industry moves towards the mid-to-high-end market Small brands find it difficult to enter, leading brands easily maintain growth, brands with weak quality control will be eliminated, market oligopoly gradually emerges, and the market will gradually shift to mid-to-high-end. 2. Brand owners actively empower, reverse-driving supply chain upgrades Flexible supply chain models such as C2B and S2B customization, brands lay out warehousing and logistics in advance, shifting focus to the supply chain. 3. Online and offline integration, terminal channels develop personalized and diversified Consistency of online and offline experience becomes the new normal. Stores develop towards diversification and personalization. Interactive experience stores and retro concept stores will become mainstream. 4. Strict quality control, personalized needs provide huge innovation space Food safety supervision tightens, health demands for products become normalized, product function orientation is further strengthened, and tastes are constantly innovated. IV. Development Path of Food New Retail 1. Establish connections with users Build 'heart' connections through emotion, satisfying the needs of the new consumption era in healthier, more worry-free, and happier ways; use new technology advantages to depict precise user profiles and achieve seamless connections between consumers. 2. Online and offline interconnection Closely connect with physical stores, interconnect; connect with partners' channels, complement each other; broaden horizons, base on a global perspective; multi-dimensional, multi-angle. 3. Precise user profiles Precise target customer positioning requires the ability to accurately 'profile' customers. With a clear customer image, you can quickly and accurately find target customer groups at low cost. 4. Empower IP In the future, brands may weaken, while IP will strengthen. IP should spread autonomously. Empowering IP means giving products emotion. Source: Danjie Entrepreneurship (ID: manjiechuangye)