Three Squirrels
Functioning as the ultimate Taobao native brand, Three Squirrels disrupted the Chinese snack industry by using cute IP and extreme e commerce efficiency to sell nuts online, successfully pivoting to an offline discount retail model to survive the post pandemic market.
Revenue
$1B
~$1.0 billion USD
Profitability
Profitable
Division
Food and Beverage
Public
Headquarters
Wuhu
Zhang Liaoyuan
Operating Model
What They Do
Three Squirrels sells packaged nuts, seeds, dried fruits, and baked snacks. They are famous for their obsessive customer experience, such as shipping a branded nut cracker and a wet wipe inside every bag of macadamia nuts.
Who They Serve
Moat: Where They Win
The Taobao Brand Blueprint
They initially did not build factories. They bought bulk nuts, packaged them with brilliant branding, and spent heavily on Alibabas Taobao platform. They treated customers as masters, creating massive brand loyalty.
IP as a Moat
The three squirrel mascots give the brand an emotional connection that generic supermarket nut brands lack entirely.
The Offline Pivot
Realizing online customer acquisition costs were becoming impossibly high, they executed a painful but necessary pivot into physical snack discount stores to capture local neighborhood traffic.
Business Model
Model Type
Revenue Streams
Profitability
Status
Profitable
Revenue
$1B
est.
Division
Food and Beverage
Public
Margin Profile
Margins were nearly destroyed by rising digital ad costs, but have rebounded robustly as the company aggressively vertically integrated its manufacturing to cut out OEMs.
Catalyst: Why Now
After a brutal period of declining revenue, Three Squirrels executed a brilliant turnaround in 2024. By brutally cutting out middlemen in their supply chain (moving from OEM to direct manufacturing control), they restored double digit top and bottom line growth.
Competitive Landscape
* Competitive threat index · China domestic market positioning
Western Analogs
Mental model only, not a 1:1 comparison
Founder
Zhang Liaoyuan
Founder & CEO
Zhang Liaoyuan recognized early that Alibabas Taobao was not just a sales channel, but a brand building platform. He treated his food company like an internet startup. He obsessed over the unboxing experience and mandated that customer service agents role play as pet squirrels online. Known as Chief Squirrel internally, Zhang recently demonstrated ruthless operational discipline by completely overhauling his company's supply chain to survive the consumer downgrade.