111, Inc. (NASDAQ: YI)

111, Inc. was founded in 2010 when its creators launched one of China’s first online retail pharmacies, and it has since evolved into a digital healthcare platform that connects patients, pharmacies, and pharmaceutical companies. The company’s core operations consist of an online retail pharmacy under the brand 1 Medicine Marketplace, an online wholesale pharmacy named 1 Pharmacy, and a network of offline pharmacies that together serve hundreds of millions of consumers across the country. In addition to selling medicines, 111, Inc. provides value‑added services such as data analytics, marketing solutions, inventory‑management tools, and supply‑chain integration to pharmaceutical manufacturers and distributors. Its stated mission is to use technology to make healthcare more accessible, affordable, and efficient for individuals and businesses throughout China.

Revenue is derived mainly from the sale of pharmaceutical and health‑care products. The company sells directly to consumers through its 1 Medicine Marketplace app and website, and to pharmacies, clinics, and hospitals via its 1 Pharmacy wholesale platform, which offers a broad selection of prescription and over‑the‑counter drugs under a direct‑sales model. It also runs an online marketplace where third‑party sellers list products and pay commission fees, generating additional revenue. Furthermore, 111, Inc. earns fees from value‑added services that include data‑driven marketing campaigns, customer‑analytics insights, inventory‑management solutions, and supply‑chain finance for pharmaceutical companies and pharmacy partners. The 1 Health Membership program, launched in 2021, does not charge membership fees but incentivizes pharmacy chains to increase purchase volumes, thereby boosting overall sales. Together, these streams constitute the company’s primary sources of income.

111, Inc. positions itself as a unique player in China’s pharmaceutical industry by offering an integrated digital platform that spans the entire drug value chain, from manufacturers to end users. While the firm notes there are no exact replicas of its model, it faces competition from traditional pharmaceutical distributors, emerging B2B platforms, and online pharmacy operators such as Ali Health and JD.com. Competitive advantages include an early‑mover status in online pharmacy dating back to 2010, a proprietary technology infrastructure supported by a team of 144 IT professionals as of 2024, and extensive data‑analytics capabilities derived from millions of user interactions. The company also benefits from a nationwide fulfillment network with 18 regional centers, a robust intellectual‑property portfolio that includes 33 patents, 334 trademarks, and 30 software copyrights, and strong relationships with over 500 pharmaceutical suppliers. These factors enable 111, Inc. to maintain a leading market position despite a fragmented and competitive landscape.

The company’s customer base is broad and diverse. It serves hundreds of millions of individual consumers who purchase medicines, nutritional supplements, contact lenses, medical devices, and other health‑care products through its online retail pharmacy. Downstream, it supplies more than 488,000 offline pharmacies, including independent stores, regional chains, and in‑hospital pharmacies, across 31 provinces of China. Additionally, 111, Inc. works with over 500 pharmaceutical companies that use its platform to source drugs, access data‑analytics and marketing services, and participate in the 1 Health Membership program. Clinics and hospitals also obtain medicines and health‑care supplies through its wholesale channel. This wide reach across consumers, retail outlets, and manufacturers underpins the company’s role as a central hub in China’s healthcare ecosystem.