---
title: "Leisure Snack Showdown: Lai Yifen Falls Behind"
description: "As the third-quarter reports conclude, three of the four major snack giants have seen profit declines. Lai Yifen even suffered a loss of 37 million yuan, making it the biggest decliner. In contrast,线下-focused Qiaqia Food and Yanjin Shop both saw revenue and profit growth."
author: "钱瑜 王晓"
publisher: "New Distribution"
email: "zhaobo258@gmail.com"
telephone: "+8615854817671"
published: "2020-11-16"
language: "en"
canonical: "https://xinjignxiao.com/en/articles/leisure-snack-showdown-lai-yifen-falls-behind-3805882e/"
markdown: "https://xinjignxiao.com/en/articles/leisure-snack-showdown-lai-yifen-falls-behind-3805882e.md"
original_source: "https://mp.weixin.qq.com/s/hHIl3SeEjvIhjbAc0L7Ibg"
translation: "https://xinjignxiao.com/zh/articles/%E4%BC%91%E9%97%B2%E9%9B%B6%E9%A3%9F%E5%A4%A7%E6%AF%94%E6%8B%BC-%E6%9D%A5%E4%BC%8A%E4%BB%BD%E6%8E%89%E9%98%9F%E4%BA%86-3805882e.md"
attribution: "New Distribution — https://xinjignxiao.com/en/articles/leisure-snack-showdown-lai-yifen-falls-behind-3805882e/"
usage_policy: "https://xinjignxiao.com/ai-policy.txt"
---

# Leisure Snack Showdown: Lai Yifen Falls Behind

> As the third-quarter reports conclude, three of the four major snack giants have seen profit declines. Lai Yifen even suffered a loss of 37 million yuan, making it the biggest decliner. In contrast,线下-focused Qiaqia Food and Yanjin Shop both saw revenue and profit growth.

****Click "Read Original" for details****
The third-quarter reports have concluded, and three of the four major snack giants have seen profit declines.
Recently, Beijing Business Today reporters reviewed six snack companies and found that among the top four—Three Squirrels, Bestore, Qiaqia Food, and Lai Yifen—three experienced profit declines. Lai Yifen even suffered a loss of 37 million yuan, making it the biggest decliner.
In contrast, offline-focused Qiaqia Food and Yanjin Shop both saw revenue and profit growth.
**As market competition intensifies, snack giants are focusing on both offline channels and niche markets to find new growth opportunities.**
**-01-**Revenue and profit diverge
Bestore, Three Squirrels, Lai Yifen, and other leisure snack companies have concluded their third-quarter reports. As the pandemic gradually comes under control, revenue has recovered somewhat. However, some leading snack companies are seeing revenue increase without profit growth.
According to the third-quarter reports of six snack companies reviewed by Beijing Business Today, **in terms of revenue, Three Squirrels led with 7.231 billion yuan in the first three quarters, followed by Bestore with 5.53 billion yuan and Qiaqia Food with 3.651 billion yuan. Lai Yifen and Yanjin Shop ranked fourth and fifth with 2.999 billion yuan and 1.434 billion yuan respectively. Haoxiangni performed poorly, with revenue of only 250 million yuan, ranking last.**
Among the top four snack companies by revenue, three showed a clear divergence between revenue and profit. According to financial reports, in the first three quarters of this year, Three Squirrels achieved revenue of 7.23 billion yuan, up 7.7% year-on-year, but net profit of 264 million yuan, down 10.62%. During the same period, Bestore achieved revenue of 5.53 billion yuan, up 1.29%, but net profit of 264 million yuan, down 16.15%. Lai Yifen achieved revenue of 2.999 billion yuan, up 2.9%, but a net loss of 37.587 million yuan, down 349.46%.
It is clear that among the three giants, Lai Yifen saw the biggest decline, with a net margin of -1.25%, while Three Squirrels, Bestore, and Qiaqia Food had net margins of 3.65%, 4.77%, and 14.51% respectively.
Regarding the reasons for revenue growth without profit growth, Beijing Business Today interviewed the three companies. A Three Squirrels spokesperson said, **"Due to the pandemic, foot traffic at our offline stores has declined overall. We slowed down the opening of new stores, so their contribution to revenue and profit did not meet expectations. Additionally, due to transportation factors, sales expenses and fixed cost amortization have risen, which also impacted profits."**
In the view of food industry analyst Zhu Danpeng, the overall performance of the snack industry in the third quarter was bleak, but for different reasons.
The profit declines for Bestore and Lai Yifen are stage-specific issues: Bestore's base is in Wuhan, Hubei, and Lai Yifen's commercial center is in Shanghai, both heavily impacted by the COVID-19 outbreak. Three Squirrels' decline is a structural issue that requires further adjustment.
**-02-**Online and offline reversal
The halo of "internet snack giant" over Three Squirrels is gradually dimming, while offline-focused snack companies like Qiaqia Food and Yanjin Shop are seeing broad gains.
As the first "internet snack stock" in China, Three Squirrels once used the internet to grow a retail company to a market value of over 20 billion yuan. But as internet dividends faded, its revenue growth rate fell from 121.00% in 2015 to 25.58% in 2017. Although growth rebounded somewhat, it was still only 45.30% in 2019.
In contrast, offline-focused Qiaqia Food and Yanjin Shop both saw revenue and profit growth, serving as two "beams of light" in the third-quarter snack industry. According to financial reports, Qiaqia Food achieved revenue of approximately 3.651 billion yuan in the first three quarters, up 13.41% year-on-year, and net profit attributable to shareholders of approximately 530 million yuan, up 32.3%. Yanjin Shop achieved revenue of 1.43 billion yuan in the first three quarters, up 46.1%, and net profit attributable to shareholders of 190 million yuan, up 110%.
The dramatic reversal between online and offline performance is related to the gradual fading of internet dividends and rising costs of acquiring traffic online.
A Three Squirrels spokesperson told Beijing Business Today, **"This year, online platform traffic has become more fragmented, with multiple traffic entrances leading to a decline in traffic on mainstream e-commerce channels and slower online sales growth. Three Squirrels has taken measures, using digital technology and emerging tools like live streaming and short videos to expand e-commerce traffic entrances. However, while ensuring sales growth, this has also increased customer acquisition costs."**
Additionally, from a gross margin perspective, offline direct-operated stores have a comparative advantage over online. For example, Bestore's e-commerce business gross margin in the third quarter of 2020 was 32.47%, lower than the 52.72% gross margin of its direct retail business.
In fact, leisure snack companies have realized the importance of the offline market and are starting to attack it.
Among them, Three Squirrels has been the most aggressive. In the first half of 2020, it opened 38 new investment stores and 209 alliance stores. During the same period, Bestore opened 25 direct-operated stores and 47 franchise stores. Lai Yifen also mentioned in its semi-annual report that it is continuing to advance its "Ten Thousand Lights" plan offline, with both direct-operated and franchise stores progressing together. In the first half of 2020, Lai Yifen's total chain stores reached 2,801, an increase of 84 year-on-year.
In the view of Shen Meng, director of Chanson Capital, **leisure snacks have low barriers and thin margins. Except for a few high-value-added categories, online operating costs are difficult to sustain long-term, so the future of leisure snacks will mainly rely on offline store sales models.**
But online and offline user groups, overall sales logic, distribution logic, and traffic logic are all different. Therefore, transitioning from online to offline is difficult, and results are unlikely in the short term.
**-03-**Staking claims in niche markets
**"Although the leisure snack market is currently in a stage of sluggishness, overall, there is still significant growth space in the future. The layout of niche snack markets will be the key to winning."** said Bao Yuezhong, a fast-moving consumer goods new retail expert.
To seize niche markets, Bestore has successively launched children's snacks and healthy snacks. In May this year, Bestore announced its first children's snack sub-brand "Liangpin Xiaoshixian" and released 42 children's snack products. Three months later, Bestore launched a fitness light snack sub-brand "Liangpin Feiyang," targeting women aged 18-35 with meal replacement and weight management solutions.
"For children's snacks and fitness meal replacements, the medium-term goal is 'double 1 billion.'" Bestore CEO Yang Yinfen believes that entering niche markets can bring new customers with high repurchase rates and high loyalty, and inject growth vitality into the parent brand. In the future, niche markets and traditional categories may each account for 50%.
Three Squirrels is not far behind, launching four new brands—Xiaolu Lanlan, Tiegongji, Yanglege Maohai, and Xixiaoque—to target niche markets. According to Three Squirrels, Xiaolu Lanlan, positioned as an internet professional baby food brand, has already formed initial brand momentum and achieved sales of over ten million yuan in September. Next year, the expected target for Xiaolu Lanlan is to sprint for 600 million yuan.
Additionally, pet food retail brand Yanglege Maohai has a monthly volume of about 4-5 million yuan, ranking second. Convenient vegetarian and wedding gift products are still in the incubation and exploration stage.
Baicaowei also launched its children's food series "Tong'an'an Little Friend" in May this year. Lai Yifen's "Yizai Children's Snack Series" has also been officially launched in over 2,800 offline stores and online flagship stores nationwide.
According to international consulting firm Frost & Sullivan, from 2012 to 2019, China's leisure food industry experienced rapid expansion, with a compound annual growth rate of 12.1%. In 2019, the market size of China's leisure food industry reached 1,143 billion yuan, up 11.0% year-on-year.
In terms of industry output value, China's leisure snack industry output value grew from 193.1 billion yuan in 2004 to 1,992.5 billion yuan in 2019, with a compound annual growth rate of 16.84%.
In Bao Yuezhong's view, although the snack industry has shown vigorous development in recent years, there are still problems such as "serious homogenization," "heavy marketing, light R&D," and "frequent quality and safety issues."
**Therefore, by laying out niche tracks, creating differentiated products, enriching product functionality, and increasing added value will be key to breaking the performance dilemma for leisure snacks.**
Source: Beijing Business Today, Authors: Qian Yu, Wang Xiao


---

## Copyright and AI use

This article is sourced from New Distribution. Search, quotation, summarization, and model training are permitted, but every use must credit New Distribution and retain the canonical source URL.

Contact: zhaobo258@gmail.com · +86 158 5481 7671