**The annual Double 11 shopping festival can be considered the most intense marketing battle for retail enterprises. The rising leisure snack industry is no exception. Just after midnight on the 11th, Three Squirrels and Bestore released their omnichannel sales reports: 1.049 billion yuan and 560 million yuan, respectively. Image / Bestore official website Although there are differences in the sales data of the two brands, the strategic approaches and brand marketing tactics of the leading leisure snack brands represented by these two companies have also shown significant divergence in the fiercely competitive environment. The continuous premiumization strategy remains the main theme for Bestore this year, focusing on high-end snacks, researching consumer segmentation needs and the market to create new demand. Meanwhile, Three Squirrels, which fought through Double 11, proposed the slogan this year: to ensure the 1 billion sales target, benefit tens of millions of consumers. After clearing the battlefield and reviewing the battle, the competitive strategies and development paths of the two leisure snack giants have gradually formed a clear divergence. **-01- The Upper Road and the Lower Road Competition among domestic leisure snack brands is becoming increasingly diversified. The market includes not only comprehensive category brands like Bestore, Three Squirrels, Lai Yifen, and Be & Cheery, but also specialty expert brands like Weilong Spicy Strips, Liuliumei, Qiaqia Sunflower Seeds, and Xizhilang Jelly, as well as imported brands such as Dove/Ferrero, Oreo, Lays, and Shiroi Koibito. However, from a strategic perspective, Bestore, the offline snack store giant, and Three Squirrels, the online channel giant, exhibit clearly differentiated strategies. On November 7, at the China International Import Expo, Bestore signed a cooperation agreement with Pakistani supplier HALO FOODS, establishing a three-year strategic partnership. During this period, Bestore will purchase high-quality Pakistani pine nuts worth 300 million yuan from HALO FOODS as raw materials for its hand-shelled pine nut products. It is understood that Bestore has established raw material bases in 32 countries and regions worldwide, and its international supply chain lays the foundation for Bestore's premium strategy. Image / Bestore official website Yang Hongchun, Chairman of Bestore, told Bullet Finance that the premiumization route will be the strategic direction Bestore adheres to for the next decade. The reasons for positioning "premium snacks" as an important future development direction for Bestore are as follows: First, grasp high-end demand under consumption upgrading. Bestore proposed its premium snack strategy at the beginning of this year, aiming to gather high-quality industry resources and provide consumers with better products. Therefore, during this year's Double 11, Bestore distinguished itself from price war tactics and proposed the core communication idea with consumers of "big brands + good products," benefiting consumers by offering higher-quality products. Second, escape homogeneous competition with differentiated value. Yang Hongchun introduced that the essence of positioning as premium snacks is to apply agricultural breeding and planting technology, biotechnology and food engineering technology, health and nutrition science, digital intelligence technology, as well as various cooperation and transaction mechanisms involving industry, academia, research, agriculture, industry, and commerce, to achieve mutual trust, high standards, and efficient collaboration among industry chain stakeholders, and to produce differentiated products and services with high standards and quality. Third, clarify brand image and concretize user relationships. Most consumers perceive Bestore as "good products, but a bit expensive." However, Yang Hongchun stated that although they follow a premium route, snacks are snacks and will never become luxury goods; they simply elevate consumer needs and product quality levels. For example, potato chips have evolved from fried to non-fried and baked, and raw materials have changed from potatoes to yams. "Therefore, we are committed to equating 'Bestore' with 'premium snacks,' rather than focusing on a specific product category. This is the core relationship between Bestore and its users." During this Double 11, Bestore focused on upgrading health- and nutrition-oriented short-shelf-life products and nut products that align with consumption trends. In contrast, Three Squirrels, which made its name with nuts, takes a completely different route. Founder Zhang Liaoyuan said that Three Squirrels has successfully transitioned from a nut brand to a full-category snack brand and is building three core categories: nuts and dried fruits, baked goods, and meat products. Image / Three Squirrels official website As a Tmall-based brand, Three Squirrels is also striving to expand offline channels. However, building physical stores cannot be achieved with capital alone to open a hundred stores. Official data shows that Three Squirrels has opened over 80 self-operated "Tou Shi" (feeding) stores and over 80 "Squirrel Small Stores" offline, and has expanded its offline retail market through Alibaba's Ling Shou Tong platform and Squirrel Alliance small stores. Since starting to lay out offline feeding stores in 2016, after three years, Three Squirrels' offline channel expansion has clearly been too slow. Three Squirrels' Q3 financial report shows that in the first half of 2019, its offline feeding store revenue was only 214 million yuan, accounting for only 4.7% of first-half revenue. It is understood that Three Squirrels began planning channel sinking at the end of 2018. Facing a leisure snack market of nearly 2 trillion yuan in China, Three Squirrels has shifted its market focus to fourth-, fifth-, and sixth-tier cities and township markets, driving new growth through market penetration. **-02- The Ambitions and Layouts of Giants Whether it is Bestore's premiumization route or Three Squirrels' combination of "omnichannel, full category, and full sinking," the true purpose behind their strategies is to achieve new growth for the enterprise. The intention behind Bestore's premium strategy is to provide high-quality food, move the world with deliciousness, become a trusted food community and consumption entry point, and fulfill the original aspiration of "letting global consumers buy the snacks they want at their doorstep." Yang Hongchun told Bullet Finance that Bestore is in a period of value transformation, but they must clearly express their value, making positioning and communication clearer. However, the premium strategy is a major upgrade for the company, not a corporate transformation. In terms of consumer demographics, in 2019, Bestore shifted its core users from young female white-collar workers to young mothers, children's snacks, pregnant women, women during menstruation, people with high blood pressure, high blood sugar, and high blood lipids, and fitness enthusiasts. "The intention is to further segment premium snacks by segmenting the population, providing consumers with more targeted products." In terms of product quality, during the 2019 product replacement process, Bestore eliminated 30% of nut products that did not meet health trends and added 36 functional cross-category products. Unlike Yang Hongchun's industrial thinking, Zhang Liaoyuan's corporate management highlights internet thinking. He believes that the evolution of all goods is to better connect people and products, and behind all evolution, technology drives the relationship between the two. In the past 19 months, Three Squirrels has also made a very important decision—to redefine Three Squirrels. In the squirrel world, Zhang Liaoyuan hopes to make the world's masters (consumers) feel great, while promoting the progress of the food industry through digitalization and diversified brand development through IP. This also aligns with the "entertainment strategy" Zhang Liaoyuan proposed in 2016. However, Bestore has not stood idly by either. This year's Double 11, Bestore joined Alibaba's A100 project, using member acquisition, distributing store coupons through light stores, and setting up city-level forward warehouses to explore new retail. If Bestore uses digital marketing to achieve "thousand stores with thousand faces," Three Squirrels uses digital connections to strengthen online capabilities, achieve supply chain front-loading and organizational efficiency, and ultimately realize the integration of retail and manufacturing. After the internet dividend made Three Squirrels successful, Three Squirrels now wants to seize the new wave of manufacturing opportunities. After going public, Three Squirrels clearly proposed transforming into a supply chain platform. Zhang Liaoyuan stated that Three Squirrels aims to use digital connections to remove retail from retail and manufacturing from manufacturing, integrate retail and manufacturing, and, combined with Three Squirrels' brand added value, become a manufacturing-oriented private-label multi-format retailer. In terms of new systems, Three Squirrels will establish online connections in products, supply chain, organizational systems, and other business areas. According to official introductions, in the next two years, Three Squirrels will use online business to build organizational capabilities centered on product insight, ultimately improving operational efficiency. Image / Three Squirrels official website In the next five years, Three Squirrels will also diversify its layout in warehousing, manufacturing, and stores. Among these, it will adopt a large warehouse system in multiple parks to build logistics hubs, and support partners with infrastructure based on products, quality, testing, digital technology, finance, management, and more; invest in building alliance factories distributed across major parks nationwide to achieve digitalization and online connectivity, forming an industrial community; continue to build offline stores and achieve personalized product recommendations for both online and offline stores. **-03- Who Will Rule the World The leisure snack industry is a huge cake, but it is not easy to get a slice. Driven by the internet, China's leisure snack industry generally adopts an asset-light model, with few companies investing in self-built factories. Most focus on brand building, product R&D, and channel sales. The advantage of this model is its lightness, but behind the lightness lies the need to strictly control product quality. As e-commerce channel growth has reached a bottleneck, offline shopping remains the major trend. In the current mature Chinese market landscape, channels are no longer the top priority for leisure snack companies to compete for. According to the latest statistics from Frost & Sullivan, in 2018, China's leisure snack market exceeded 1 trillion yuan (1,029.7 billion yuan), with supermarkets and hypermarkets accounting for the highest share at 57%, while online shopping accounted for only 8%. Currently, Three Squirrels is using strategies of "de-e-commerce," "de-nut," and "full sinking" to realize Zhang Liaoyuan's "new squirrel" dream. However, this path is not easy for the seven-year-old Three Squirrels. With the release of its second financial report after listing, Three Squirrels faces increasing public pressure. Industry insiders say that Three Squirrels' key problems are its single channel as a weakness, product homogeneity as a hard injury, and the OEM model as a constraint. Taking the sinking route will definitely require a process and cannot yield immediate results. However, from the statistics above, Three Squirrels may be playing a long-term game. Of course, looking at future development trends, the demographic dividend has gradually disappeared with the decline in China's birth rate. Enterprises should explore segmented markets to achieve new growth in the future. Meeting consumers' premium needs is also another strategy worth trying. It can be seen that in the face of fierce market competition, rapid industry growth, and changing consumer demands, Bestore and Three Squirrels, as giants in the leisure snack field, are continuously striving for better and faster development. Bullet Finance believes that the industry needs such healthy competition to achieve new growth and breakthroughs. From the strategic paths of the two giants, it is clear that leisure snack companies are now at a crossroads. Who will rule the world? Let the market decide. Source: Bullet Finance (ID: wwwhygc) Tips will be paid 400-2000 yuan once adopted.