---
title: "Three Squirrels Founder Leads Executives on Intensive Dealer Visits: What Signal Does It Send?"
description: "The video account of \"Squirrel Dad Zhang Liaoyuan\" recently updated with three market research VLOGs, drawing industry attention. From March 18-22, founder Zhang Liaoyuan led senior executives on a field trip to visit dealers in the lower-tier markets at the junction of Anhui, Jiangsu, Shandong, and Henan, inspecting product sell-through, categories, displays, and pricing, while listening to frontline feedback. This move signals a strategic focus on distribution channels and the 'high-end cost-performance' route."
author: "草树"
publisher: "New Distribution"
email: "zhaobo258@gmail.com"
telephone: "+8615854817671"
published: "2024-03-31"
language: "en"
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# Three Squirrels Founder Leads Executives on Intensive Dealer Visits: What Signal Does It Send?

> The video account of "Squirrel Dad Zhang Liaoyuan" recently updated with three market research VLOGs, drawing industry attention. From March 18-22, founder Zhang Liaoyuan led senior executives on a field trip to visit dealers in the lower-tier markets at the junction of Anhui, Jiangsu, Shandong, and Henan, inspecting product sell-through, categories, displays, and pricing, while listening to frontline feedback. This move signals a strategic focus on distribution channels and the 'high-end cost-performance' route.

The video account of "Squirrel Dad Zhang Liaoyuan" recently updated again. Besides the classic management series "Drucker You Can Learn," three frontline market research VLOGs have caught industry attention.

As the saying goes, "The whole year's work depends on a good start in spring." From March 18 to 22, around the Spring Equinox, Three Squirrels founder Zhang Liaoyuan led senior executives on a "downward" journey. According to the video content, the team visited dealers in the lower-tier markets at the junction of Anhui, Jiangsu, Shandong, and Henan, inspecting product sell-through, categories, displays, and pricing, while listening to real frontline feedback and conducting reviews.

In an era where bulk snack stores are prevalent, dealers seem to have become "invisible." However, Three Squirrels' offline distribution has re-entered the public eye through Zhang Liaoyuan's video account.

From proposing moderate distribution in the fall of 2021, to the concentrated outbreak of distribution during last year's Spring Festival shopping season, to this executive team's visit and research, and then to the annual report's "special focus on distribution business" and the first explicit proposal to "promote regional deep distribution of daily-sale products," what insights and considerations lie behind all this?

**Walking the Market**
**Focusing on Distribution Channels and Embracing Dealers**

Suzhou, Linyi, and Tengzhou are located at the junction of Anhui, Henan, Shandong, and Jiangsu provinces. Since ancient times, small commodity trade has been prosperous here, making it a barometer of the distribution market and highly representative.

In the video, in Suzhou, the Three Squirrels team visited Fuliji Town in the main urban area. A dealer who joined last July plans to double sales this year. Zhang Liaoyuan immediately demanded to "help dealers grow" and mentioned using "new concepts."

In a local mainstream supermarket, Three Squirrels' gift box products had already sold out. Seeing only 6 single-item products on display, Zhang Liaoyuan said they should expand to 12 items and further lower the terminal selling price. "What kind of product at what price can enter the terminal and sell well? We can develop products specifically for that." Category richness, product shelf life, and display methods are all details Zhang Liaoyuan pays attention to.

In Linyi, when hearing a "veteran" dealer bluntly say that sales were poor in 2021, Zhang Liaoyuan did not avoid the issue and reflected on himself, saying "brand premium harms people." After visiting several supermarkets and convenience stores, he found that the best-selling products were all affordable, even cheaper than some white-label products, which strengthened his determination to follow the "high-end cost-performance" route.

After some exchanges, the dealer was also confident and set his goal at 10 million yuan for this year, which only covers Linyi urban area, excluding counties under the city.

In Tengzhou, the team conducted a preliminary review. After listening to the heads of channels, products, and market departments, Zhang Liaoyuan summarized, "On the surface, many retail terminals are struggling, but we cannot neglect counties and prefecture-level cities. The foundation of Chinese retail is still this: thousands upon thousands of small shops. Their difficulties today are temporary, so we must do well."

He also sharply pointed out the problems in the entire sales chain of offline distribution in China: "From brand to manufacturer to dealer to small shop to consumer, the relationship is very unsmooth, and the intermediate links are very bloated. Everyone is playing games with each other, and costs are huge. So Three Squirrels' great opportunity is to ultimately create a 'high-end cost-performance' full-chain reversal, solving the relationship between people."

In a short video about management, Zhang Liaoyuan deeply analyzed the relationship among products, market, and channels, concluding: "The three need to be balanced, but they are by no means equally important. Comparatively, market and channels are more important than products, because results are generated externally. We need to see what products the market and channels need, rather than blindly creating products on our own."

"'Integration of product and sales' means making the entire organization revolve around the market, weakening management power, and stimulating the potential and mutual collaboration of each individual."

"The core of 'high-end cost-performance' lies in cost reduction, which refers to reducing costs across the entire chain from product raw materials, manufacturing, delivery to various channels and users, removing all wasteful and value-less intermediate links, i.e., total cost leadership."

It is not hard to see that this market visit and research is precisely to understand the "source." Only by doing so can problems be fundamentally solved and the entire chain be straightened out.

Just as Lei Jun led Kingsoft out of its trough back then, it was because he discovered that Kingsoft's biggest problem was being too focused on technology and ignoring market demand. To fight a tough battle, one must sustain the war with war and respect user needs.

So under Lei Jun's leadership, Kingsoft quickly developed corresponding products based on market reactions, used peripheral profits to support core business, and iterated product application scenarios in a timely manner, leading to the brilliance of WPS software and Kingsoft Cloud later.

**Responding to Trends**
**Transforming from "Festival" to "Daily Sales"**

It is certain that China's offline leisure food market is extremely vast. According to the forecast of Qianzhan Industry Research Institute, the compound annual growth rate of China's leisure food industry market size from 2023 to 2028 is about 10%, reaching about 2.6 trillion yuan by 2028. Offline channels still account for the absolute majority of channel transactions, occupying over 85% of leisure food circulation.

The market calls, and supply responds. In recent years, Three Squirrels' distribution business has developed steadily, from relying on B2B platforms in the past to laying out first- and second-tier markets and entering lower-tier markets, forging a squirrel-style exploration path.

**For Three Squirrels, which is inherently e-commerce-oriented, doing distribution well is not easy, but precisely because of this, there is potential worth digging into.**

In 2023, Three Squirrels' distribution business achieved a highest single-month sales of nearly 400 million yuan. Large single products with sales exceeding 20 million yuan include Daily Nuts, Macadamia Nuts, Pistachios, Almonds, Cashews, Pork Jerky, Hand-Torn Bread, Pecans, Paper-Shell Walnuts, Shu Xiang Beef, Peanuts, etc., and many products with the same specifications have terminal prices far lower than other brands, even white-label products.

In Zhang Liaoyuan's view, the lower-tier market has huge business opportunities. If Chinese society is seen as a gourd shape, first- and second-tier cities are more like the head of the gourd, while the vast county markets are closer to the belly of the gourd, with a population of nearly 900 million, accounting for about 40% of GDP, with a huge base and stable consumption. Large and small stores are like capillaries connecting thousands of households in the lower-tier market.

**"Determining the channel is only the first step; maintaining continuous hematopoietic ability is the real way to succeed."** Hematopoiesis relies on products. As Three Squirrels' trump card product, nut gift boxes have received multi-faceted recognition offline and are the foundation of Three Squirrels' distribution efficiency in offline sell-through. During last year's Spring Festival shopping season, Three Squirrels' distribution channel gift box products sold out ahead of schedule, showing the product's appeal.

**However, gift boxes are affected by festivals and fluctuate greatly. Therefore, the company must "attack with all forces" on products, continuously incubate daily-sale single products, and make star nut single products and hit snacks famous, so that they can flow continuously through the opened channels.**

With the practice of the "Douyin + N" omni-channel collaborative system, Three Squirrels' offline distribution efficiently and quickly matches products, catching waves of traffic. According to the annual report disclosure, **in 2023, Three Squirrels gradually penetrated regional distribution of daily-sale products, covering over 100,000 effective high-quality terminals, and the proportion of daily sales significantly increased.**

**Planning the Overall Situation**
**Carrying Out "High-End Cost-Performance" to the End**

What exactly does Zhang Liaoyuan's "new concept" mentioned earlier refer to, and how should "regional deep distribution" be understood? New Distribution asked Three Squirrels about this and received the reply that **"specific content is expected to be released mid-year."**

In the company's annual report, some clues may be found.

Three Squirrels believes that China's retail industry is undergoing a profound supply-demand transformation across the board, showing an overall imbalance between supply and demand. Its characteristics are **the imbalance between total supply surplus with diversified supply methods and relatively insufficient total demand**. As a category with Chinese characteristics, the snack industry will undergo structural changes in this round of transformation, expected to achieve a reconnection of supply and demand and build a new category prosperity.

Based on this judgment, the company further defines the overall strategy of "high-end cost-performance," which is **based on market demand orientation, consumer-centric, innovation-led, through the integration and reorganization of the entire chain and all elements, achieving "shorter chain, more advanced tools, more collaborative organization," under the basic conditions of total cost leadership in all categories, all channels, and the entire chain, achieving higher quality products, more differentiation, more affordable prices, and superimposing squirrel brand power, so that consumers can re-experience the new value of the brand.**

For the future, Three Squirrels' new vision is: **With the mission of "making nuts and good snacks accessible to the public," the overall brand positioning of "national snacks, national good prices," firmly adhering to the business model of "manufacturing-based own-brand retailer," adhering to the overall strategy of "high-end cost-performance," and sticking to the business approach of "all categories, all channels," the overall goal is: "Return to 10 billion, strengthen in the whole."**

The goal is clear, but how to achieve it?

**Strong single products, strong channels, strong organization.**

**On products, with "one product, one chain" as the core,** continuously consolidate the main nut category, and focus on selecting a batch of snack big single products. Build a full-chain new supply system for each category to achieve total cost leadership.

**On channels, with "Douyin + N" collaboration as the core,** leverage the content attributes of short-video e-commerce to empower all channels, with special focus on distribution business, gradually promoting the creation of regional deep distribution of daily-sale products and the density layout of community snack stores in base markets.

**On organization, with "integration of product and sales" as the core,** focus on the high balance of the three key links of "product, market, and channel," achieving a market-oriented, consumer-centric, and highly collaborative networked organization, thereby delivering high-end cost-performance products.

"Based on dealer feedback, we will develop products with broad audience appeal and high channel adaptability. In addition to products, we will also focus on packaging, specifications, display, and multi-party benefit distribution models. Category development and channel deep expansion will work together." Said a person in charge of the company's category department.

In addition to hardware, Three Squirrels' software empowerment is also ongoing.

At present, the squirrel digital system has penetrated the five major business segments of distribution business: customer management, order management, goods supply, order fulfillment, and after-sales. Through pre-sale orders, deterministic orders can be included in goods planning in advance, supporting functions such as distribution demand planning and online collaboration of supply chain goods. It will be further improved and strengthened in the future.

**Final Thoughts**

There is a vast world with great potential. Taking advantage of the opportunity of China's circulation channel transformation, the offline distribution system urgently needs to be reshaped, and a new category prosperity is expected to accelerate.

Management guru Drucker once said, "The primary task of an enterprise is to create customers." With the emergence of a large number of new channels such as bulk discount stores, community group buying, Douyin live streaming, and private domain e-commerce, the supply chain is getting shorter and more efficient. Merchants can no longer use long, redundant, and complex distribution agency models to verify and promote a product.

**What merchants need is a complete product distribution system with rapid response, small-scale trial and error, continuous iteration and upgrading, and ultimate efficiency.**

**The value of dealers is irreplaceable, including local sales networks, customer resources, warehousing and logistics, and grasp of consumer preferences. Cooperating with them may be a more efficient way.**

As a latecomer in the distribution battlefield, Three Squirrels is lightly equipped and has already taken the lead, showing a trend of breaking the old and establishing the new. Whether the road ahead is smooth is unknown for now, but innovation and exploration are always worthy of recognition.

We also look forward to Three Squirrels relying on "new concepts" to carve out a new world, opening up new models and injecting new vitality into China's offline distribution.


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