© Understanding Consumption Original/Produced

Author | Yang Yang

In 2013, Yang Mi's catchy advertising phrase "Are you okay?" made LIULIUMEI memorable for that generation of consumers.

However, in recent days, "Are you okay?" has turned into a market joke: "Did you see that right?". Within just a week of its listing, LIULIUMEI's stock price skyrocketed by 2.2 times, with some joking that it was because its English abbreviation coincided with large language models, being treated as an "LLM concept stock."

The possibility of a mix-up is low; the reason for LIULIUMEI's stock price surge can be explained by a standard financial term: liquidity squeeze caused by supply constraints:

After deducting locked-up shares from cornerstone investors, the actual free float of LIULIUMEI's stock at the beginning of its listing was only about 10%. Due to the extreme scarcity of shares in the market, a small amount of capital can leverage a huge price elasticity.

So, if we set aside these short-term supply and demand factors, what is LIULIUMEI's intrinsic fundamentals?

This article holds the following views:

1. A big ship cannot sail in shallow waters. In the second half of 2025, LIULIUMEI's revenue and net profit will experience negative growth. The core reason is that LIULIUMEI's revenue structure is singular, relying almost entirely on plum products, while plum snacks have a relatively small audience and are not suitable for price increases due to their accompanying nature, resulting in a market size of less than 2% of the overall snack food market. This caps LIULIUMEI's potential.

2. New growth points need to be found. With the ceiling on plum products being limited, LIULIUMEI needs to find new products to drive growth. Currently, in addition to its three major product lines of green plums, black plums, and plum jelly, LIULIUMEI is gradually launching products like plum tea and plum gummies, but the revenue contribution from products like plum tea is still low and awaits new breakthroughs.

/ 01 /

The growth bottleneck is approaching

In Zhang Kun's investment logic, the channel power of a product often outweighs the product power itself. This theory aptly summarizes the trend of LIULIUMEI's performance growth from acceleration to deceleration over the past few years.

In 2024, LIULIUMEI's revenue growth rate was as high as 24.9%, but by 2025, its year-on-year revenue growth rate quickly dropped to 5.9%. If we look solely at the second half of 2025, LIULIUMEI's revenue even experienced negative growth.

The change in growth trend is due to the disappearance of LIULIUMEI's channel dividends.

The snack industry has always had low barriers to entry and is highly fragmented, with a CR5 of only 5.9%. Coupled with a concentration of upstream suppliers and severe product homogeneity, consumers find it hard to be loyal to a single brand. In this context, "shelf space" often holds more power than the products themselves; seemingly large brands are essentially most dependent on channels.

Therefore, every major reshuffle in the snack industry has been driven by channel changes.

For example, the rise of the previous generation of snack giants relied on capitalizing on the traffic dividends of e-commerce. Around 2010, Baicaowei, Liangpinpuzi, and Three Squirrels became industry newcomers by heavily investing in online channels, with Baicaowei achieving an explosive growth of 43.7 times within five years.

Returning to LIULIUMEI, its previous high growth was primarily due to seizing the channel dividends of bulk snack stores With the model of "large-scale procurement and location selection to reduce costs, low gross profit and fast turnover to improve capital recovery speed," bulk snack stores have quickly become synonymous with extreme cost performance, with their terminal prices even being 20% to 30% cheaper than e-commerce.

Under the trend of cost-performance consumption, bulk snacks have grown wildly. From 2021 to 2024, the number of bulk snack stores in China surged from 2,500 to 40,000, with their share in the entire snack consumption channel skyrocketing to 37%, directly defeating long-established e-commerce (20%) and supermarkets (22%).

The high growth of LIULIUMEI in 2024 is largely attributed to this.

From 2023 to 2025, the sales proportion of LIULIUMEI in snack specialty stores, including bulk snacks, increased from 10.1% to 38%. Sales in snack specialty stores also achieved nearly fourfold growth, becoming the biggest driver of its revenue growth.

However, the slowdown in growth in 2025 is also due to the nearing end of the benefits from the bulk snack channel. Firstly, the growth rate of bulk snack stores is also slowing down. Secondly, relying on cost performance to win in bulk snacks essentially exchanges profitability for growth. LIULIUMEI, which has seen a cumulative gross profit margin decline of 4 percentage points over two years, cannot place all its growth bets on the bulk snack track.

Nevertheless, compared to the fading channel dividends, what LIULIUMEI finds more challenging is the inherent limitations of the category it occupies.

/ 02 /

A big ship cannot sail in shallow waters

If the ceiling of the track itself is too low, it is difficult for a company to grow into a towering tree, and this is vividly reflected in LIULIUMEI.

Although LIULIUMEI claims to be "China's leading fruit snack enterprise and plum product leader," from the product structure perspective, LIULIUMEI's products are concentrated in "plum" snacks, focusing on three major categories—dried plum snacks, fresh plum products, and plum jelly. It does not involve other fruit snacks such as candied fruits, dried fruits, or fruit preserves.

Therefore, the current ceiling for LIULIUMEI should be viewed in terms of the market size of plum snacks. In 2025, the combined market size of green plum fruit snacks and fresh plum fruit snacks is only 14.7 billion, and the entire industry scale is even less than the annual revenue of many mid-tier liquor brands, with a market share of less than 2% in the entire leisure food track.

The reason why the plum market is difficult to expand is not complicated.

First, let's look at demand. Compared to universally accepted categories like nuts and biscuits, plum products have a very niche audience. Their core flavor is "high acidity + high sugar/high salt," which naturally deters those who are intolerant to acidity. In addition, while nuts and chips can be consumed in large quantities without notice, the sourness of plums has a threshold; excessive consumption can lead to oral acidity and stomach discomfort, resulting in a much lower per capita consumption compared to mainstream snacks.

Next, let's consider pricing power. Plum products do not possess scarcity at the raw material level, and they often play the role of "small items to relieve greasiness" in consumption scenarios rather than being enjoyed as independent snacks, which determines their lack of a mass basis for price increases Against the backdrop of both volume and price peaking, it has become increasingly difficult for LIULIUMEI to continue to increase its market share.

Currently, LIULIUMEI holds a 24% market share in the domestic green plum snack market, ranking first in the industry. However, based on production and sales trends, it is challenging for this number to rise further. By 2025, LIULIUMEI's sales volume has declined from 29,900 tons to 23,600 tons.

With both volume and price facing bottlenecks, it is not easy for LIULIUMEI to increase its market share.

Plum products do not have an absolute monopoly on the raw material side, and they also lack core hard technology in processing techniques such as candied fruit processing and green plum pickling. There are thousands of candied fruit factories nationwide holding SC certificates (food production licenses).

Because it cannot establish a moat on the product side, LIULIUMEI can only invest heavily in channels and marketing. From the early days with Yang Mi to later endorsements by Guan Xiaotong, Xiao Zhan, and the Times Youth League, LIULIUMEI has long relied on high-frequency endorsement campaigns to maintain its visibility. By 2025, its sales expenses even directly exceeded the company's net profit.

However, the problem is that channel and marketing strategies are the easiest to replicate. In the context of major snack giants and brand channels entering the market, the competitive pressure on LIULIUMEI's core business will only increase.

With the main battlefield under pressure, LIULIUMEI must find new growth points.

/ 03 /

Need to Find New Growth Points

In the consumer goods industry, breaking into the market and growing stronger with a single category is a classic path for many companies.

However, when the core category enters maturity, "single category dependency" can become a hard injury to development: it means a low ceiling, weak risk resistance, and limitations in capital market valuation logic.

Looking at the history of consumer goods development, to break this ceiling, companies typically choose two paths:

One is vertical integration of the industrial chain. For example, Nongfu Spring has conducted a "scarce water source land-grabbing campaign" for over 20 years. It has laid out 17 water sources nationwide, most of which are located in deep mountains or nature reserves. These non-renewable resources not only have high approval thresholds but also possess strong exclusivity. By controlling scarce water sources, Nongfu Spring has achieved higher pricing power and market share.

The second is vertical extension along related categories. It is difficult for companies to cross into unfamiliar areas to earn beyond their recognition; the most prudent approach is to incubate new growth curves along similar product lines. For example, Weilong started with gluten spicy strips and later transitioned to healthier konjac products, with its konjac series now accounting for over 60% of its revenue.

In contrast, LIULIUMEI is currently attempting to break through using these two methods.

Although green plums are not scarce, high-quality green plums have very high requirements for climate and geographical location. LIULIUMEI is currently laying out green plum planting bases nationwide to seize upstream quality resources. However, given the limited overall market for plum products, LIULIUMEI's more urgent task is to generate revenue through new categories.

Previously, LIULIUMEI's product line has gradually extended from green plums to imported plums and plum jelly. In addition to its three main product lines, LIULIUMEI has also launched products such as plum tea and plum essence gummies in recent years, but currently, the revenue share of products like plum tea is still low, accounting for less than 1% In the future, whether new products can achieve breakthroughs will largely determine the value of LIULIUMEI.

Disclaimer: This article (report) is based on publicly available information or information provided by interviewees, but Read Finance and the authors of the article do not guarantee the completeness or accuracy of such information. Under no circumstances does the information or opinions expressed in this article (report) constitute investment advice to anyone