During this year's Double 11 shopping festival, the three giants Three Squirrels, Beiyuwei, and Liangpin Shop once again dominated the top three spots in the snack category. Three Squirrels did not disclose total sales, but according to its battle report, it ranked first across all nine platforms including Tmall and JD.com; Liangpin Shop's sales reached 659 million yuan, and Beiyuwei's 560 million yuan. This sales volume is beyond the annual targets of many brands. Under the definition of full-category snacks, the three giants, spanning nuts, dried fruit, jerky, and other categories, continue to expand into other brands' territories, competing for a share of the market. Currently, the three giants have become the bellwether of the snack industry and a model for many other snack brands. However, despite their rapid growth, they represent only a small fraction of the trillion-yuan snack market. Moreover, the three giants' model has both advantages and disadvantages, and it is not a standard answer for other brands to copy. Behind the giants' towering figures, where are the shadows they cannot control? How can other brands break through the giants' blockade and carve out their own sales space? -01- The Giants' Achilles' Heel First, we must acknowledge that the three giants are very successful. By leveraging industry and channel dividends and finding suitable marketing paths, the three giants have achieved rapid growth in sales and brand awareness. Moreover, after gaining a fan base, new products can generate decent sales even through cross-selling. However, as the three companies expand their categories, they exhibit similar characteristics: a large number of SKUs, a comprehensive range, a reliance on OEM, and severe product homogenization. Entering any of the three giants' flagship stores feels like stepping into a "snack department store." The dazzling array of snacks and promotions is overwhelming. According to statistics, Liangpin Shop has over a thousand SKUs, and Three Squirrels has over six hundred, showing the richness of their offerings. While a large number of SKUs can provide users with more choices, the abundant SKUs are the brand's Achilles' heel. First, a large number of SKUs means greater financial risk for the brand. The more categories a brand bets on, the greater the pressure from capital occupation, and gross margins will be diluted. Moreover, the three giants' sales rely mainly on a few top categories. In 2019, Three Squirrels' sales were 10.173 billion yuan, with nuts contributing 5.443 billion yuan, over 50%, while other categories developed relatively slowly. The "more but not refined" operation model provides opportunities for other niche vertical brands. Second, category expansion also dilutes brand equity. Take Three Squirrels as an example. Starting with nuts, Three Squirrels represented good nuts with a natural, organic brand image. But when the brand expanded into deep-processed products like jerky and baked goods, its natural, original brand image could not extend to these categories. Although it leveraged the Taobao dividend and ran from zero to 10 billion, the cost was high expenses, with revenue increasing but profits not following. Third, excessive category expansion and the OEM model carry risks. Under a multi-product operation model, brands often choose an asset-light model, focusing on brand marketing while outsourcing processing. If the brand cannot effectively monitor these factories, quality issues may arise, posing risks to the brand. Moreover, the more categories, the more types and numbers of factories involved, and this risk multiplies. In recent years, quality issues repeatedly exposed at Three Squirrels have highlighted the shortcomings of the OEM model. Finally, too many SKUs increase internal brand friction. Excessive SKUs can lead to severe internal competition, with different product line managers competing for advertising slots and traffic, causing involution. Therefore, although the giants have comprehensive product lines, they have not monopolized category development. Having missed the channel dividend period, other brands may not be suitable for this model. Brands still need to combine product, user, and other dimensions to find a suitable marketing model. As long as they find the right category and do good marketing, there is still an opportunity to break through. -02- How Should New Brands Find Opportunities? **Today, with multi-scenario consumer demand, snack categories are increasingly diverse. Even for the same type of product, different scenarios such as at home, on the go, or at the gym need to be considered. Moreover, snacks are not just food; they can also be emotional stimulants, requiring emotional connection points in product development. The entry barrier for snacks is low; you can almost imitate any major brand's products and sell them. But at the same time, the barrier is high; consumers may occasionally switch tastes but might return to the original brand. If new brands do not form strong associations and convert to brand loyalty, consumers come and go quickly. Therefore, new brands need to think clearly about what will "attract users' taste buds" before entering the market. Whether selling good taste or the positive emotions and associations the product brings, it can create lasting appeal. Before launching, new brands should think about: what product to make, who to sell to, where to sell, and how to sell. Product, audience, and channel are not independent factors but mutually influence and determine each other. Here, we offer some directions for brainstorming. Find opportunities in user groups. If new brands can leverage the dividend of new consumer groups, they can achieve good conversion. With e-commerce platforms like Tmall and JD.com already mature, many thought there were no opportunities for new e-commerce platforms. But Pinduoduo seized the dividend of the lower-tier market, growing rapidly to form the "Tmall, JD, Pinduoduo" trio. Domestic cosmetics brands Huaxizi and Perfect Diary seized the rise of Generation Z consumers, breaking through the dominance of European, American, Japanese, and Korean cosmetics with high-cost-performance products. This Double 11, Perfect Diary topped the cosmetics category. These are good examples of leveraging user groups. For food, there are still many demographic dividends to seize. For example, as post-90s and even post-95s become parents, they are a generation raised on the internet with higher demands for parenting. They are willing to choose exclusive children's food for their kids, valuing brand professionalism and health. This year, the top baby snack brand on Tmall, Baobao Chanle, focuses on zero additives and real ingredients, offering staple foods, complementary foods, and snacks. Currently, there is no absolute leading brand in infant snacks, giving new brands an opportunity. Similarly, with an aging population, the silver market is also a blue ocean. In recent years, clothing and cosmetics for the elderly have developed significantly, and food for the elderly also needs to be more diverse. Besides traditional milk powder products, there is an urgent need for new categories. Everyone talks about the silver market opportunity, but products beyond milk powder are still limited. Doing well in the "one old, one young" segments can yield good results. Redefine categories. This standard does not necessarily mean creating something new; it can also mean breaking users' existing perceptions or even positioning against existing products. Why did Xiaomi succeed? In terms of product, it broke the price band of thousands of yuan for smartphones, directly pulling it to the thousand-yuan level, redefining the standard for smartphones. The same approach can be used for food, redefining from directions such as ingredients, consumption scenarios, processes, and packaging. Ice cream used to be priced at three to five yuan, but Zhongjie 1974 and Zhong Xue Gao redefined it, raising prices to around 20 yuan and achieving success. Milk tea used to be made with flavorings, but Heytea turned it into a high-end product with real tea and real juice, giving it social currency status, and can sell for 30 yuan a cup. Mushrooms are commonly seen as a vegetable, but Guzi Guzi turned them into snacks and sells well. Develop new categories. Local specialties can be developed into snack products. In recent years, the industrialization of specialties has been well done, and we cannot ignore Luosifen (river snail rice noodles). During the pandemic, Luosifen was frequently on hot searches and once sold out. At exhibitions like the autumn sugar fair, Luosifen also shone. Similarly, if there are distinctive local snacks, they can be produced industrially to expand consumption areas, and maybe they will be the next "Luosifen." Even if it is not a new category, you can use the "A+B" form to give products new functions, thereby enhancing the brand's added value and driving sales. For example, adding collagen to candy to make it a beauty snack; adding vitamins and trace elements to jelly to make it a supplement; adding prebiotics to nuts, etc. Deeply cultivate a single category. Although the three giants are comprehensive, not every product is strong, and there are often categories without brands. New brands can seize the opportunity to achieve "brand equals category." Xuān Mā Egg Yolk Pastry is a brand that has risen rapidly in recent years. During this Double 11, it achieved sales of over 30 million yuan solely with the egg yolk pastry category. However, in the process of deeply cultivating a single category, new brands should try to choose products without strong brands, which helps reduce competition difficulty and quickly gather users. It is recommended to find products in the long-tail market and build brand power by creating hit products. We used to talk about the 80/20 rule, but if new brands completely follow mature categories, they may need to pay a very high cost. For example, if a new brand benchmarks Three Squirrels in nuts, unless your costs are absolutely low, or you have obvious product differentiation, or there is a blue ocean channel with a population dividend, it will be difficult to succeed. In large categories, you can upgrade products to avoid competition and refine operations, which may also lead to success. Back then, Wolong avoided the red ocean of bagged nuts, created daily nuts, and through differentiated operations, built a super single product. Leverage channels to build products. Three Squirrels' success was riding the fast train of online channel development. If you can find new explosive channels and develop products specifically for them, you can still quickly gain awareness and convert it into sales. For example, with the boom of live-streaming channels, snack products can easily attract users to order due to low barriers and tempting taste descriptions, quickly building a user base. Live-stream rooms like Li Jiaqi's and Viya's are like super department stores. Taking this fast track can quickly promote products to millions or even tens of millions of users, achieving sales conversion. Of course, new products can not only innovate in product types but also reform marketing models. For example, providing dietary and nutritional consultation services in products, offering more professional advice; changing from one-time sales to weekly, monthly, quarterly, or even annual packages, integrating professionalism and richness into the product, becoming part of the brand. -03- Mature Brands, Riders of the Wave **If new brands are like a blank canvas, old brands need to further optimize and iterate on their existing brand equity. Brands need to do two things: first, make good products; second, adapt to the times, reaching target groups in ways they prefer and through channels they frequently use, keeping products vibrant. Explore product advantages and reposition categories. Old brands must keep up with product trends during development. As consumption levels rise, consumers' attention to healthy food is gradually increasing. Paying attention to consumption changes allows timely adjustment of product direction, avoiding detours. Take Liuliumei as an example. In 2013, Yang Mi's ad "Are you okay? If you're okay, eat Liuliumei" successfully broke the circle, making Liuliumei the number one brand in the green plum category. Many people criticized Yang Mi's Liuliumei ad as "low-class" and "brainwashing," but I think that when the green plum category is not mainstream, the brand urgently needs more people to know about Liuliumei. The phrase "Eat Liuliumei when you're okay" provided a clear choice for consumers who wanted a snack but didn't know what to choose, similar to Brain Gold's "Give Brain Gold as a gift," quickly attracting a wave of passersby fans through advertising. If users find it tasty, it naturally drives repeat purchases. When a brand has accumulated a certain consumer base, relying solely on snack positioning limits growth. With consumers facing countless snack choices today, they may soon forget Liuliumei and switch to other products. After seven years of "Eat Liuliumei when you're okay," the brand slogan changed to "Sour a bit, eat Liuliumei," making natural organic acids the main communication point, achieving an upgrade from green plum snacks to green plum health food. The positioning of natural organic acids provides a broader consumer base for brand development and more possibilities for growth. As the first brand positioned on natural organic acids, Liuliumei is significantly differentiated from competitors and can capture more competitor users. Communicate with users in a younger way. Consumers like snacks not only for taste; sometimes snacks are also a status symbol and a value statement. If brands stick to old marketing methods, users may perceive them as old-fashioned, rigid, and not trendy enough, and may be attracted to new products and brands, changing their purchasing behavior. Brand rejuvenation is a problem many old brands must face. Don't be afraid of being trendy; be afraid of not being trendy. A typical example of a snack brand adapting to trends is Want Want. After three consecutive years of decline, Want Want was once written off. But as Want Want found the code to entertain young people, using national trend co-branding, cross-border products, and other forms, flexibly using the Want Want IP to create national cans and professional cans, it allowed consumers to rediscover the brand and helped it out of crisis. For users, brands that are aloof are not likable. Brands that are witty, cute, or even a little naughty, with more distinct images, are more memorable. As long as they do not violate morality or law, appropriately breaking the image may bring unexpected surprises! Restrained product expansion. Based on the existing product line, expand by category and stage, avoid over-extension, and ensure the brand's tone and user perception do not become confused. -03- Summary Snacks are a large market, and no single company can fully cover it. Product-rich department store models can provide users with better choices, but small and beautiful category cultivation can also create a more professional snack experience for users. Both new and old brands, with good insight and seizing opportunities, still have great potential. Tips will be paid 400-2000 yuan upon adoption.