111, Inc. (YI): History, Ownership, Mission, How It Works & Makes Money

As a leading digital healthcare platform in China, how does 111, Inc. (YI) manage to sustain operational profitability in a challenging market while reporting a trailing twelve-month (TTM) revenue of nearly $1.97 Billion? This company's story isn't just about massive scale in the online pharmacy space; it's a masterclass in supply chain optimization, evidenced by their Q1 2025 operating expenses dropping to just 5.5% of net revenues, a 30 basis point improvement year-over-year. But the TTM net loss of -$1.42 million tells a more complex story about capital deployment and growth strategy, so you defintely need to understand the history, the 43.90% insider ownership, and the S2B2C model that drives their cash flow.

111, Inc. (YI) History

You want to understand the foundation of 111, Inc. to gauge its long-term strategy, and that starts with its origin. The direct takeaway is that the company wasn't just a simple e-commerce play; it was built by supply chain experts who pivoted from a pure online retail model to an integrated tech-enabled platform, a transformation that led directly to its 2025 operational stability.

111, Inc.'s Founding Timeline

Year established

The company was co-founded in 2010, starting its journey by pioneering the online pharmacy concept in China.

Original location

The original operations and current headquarters are located in Shanghai, China.

Founding team members

The company was co-founded by Dr. Gang Yu and Mr. Junling Liu, both of whom brought significant experience from technology and supply chain roles at companies like Dell and Amazon.

Initial capital/funding

While the initial seed capital is not public, the company secured a major early injection of capital with a $100 million Series B funding round in 2016. This was followed by a pivotal capital event: the NASDAQ Initial Public Offering (IPO) in September 2018, which raised approximately $140 million.

111, Inc.'s Evolution Milestones

The company's history shows a clear, deliberate shift from a basic online pharmacy to a complex, integrated healthcare platform. This evolution is the key to understanding its current B2B and B2C segments.

111, Inc.'s Transformative Moments

The real story here is the strategic pivot away from a pure e-commerce mindset. Honestly, most companies fail when they try to be everything to everyone; 111, Inc. succeeded by enabling others.

The most significant shift was the move to the S2B2C model, which translates to 'Supply chain platform to enable Businesses to better serve Consumers.' This meant the company stopped just selling drugs directly to consumers (B2C) and started building a massive, smart supply chain to empower offline pharmacies (B2B) and doctors. It's a classic platform play.

• 2016 Platform Launch: The simultaneous launch of the B2B platform, 1 Drug Mall, and the Internet hospital, 1 Clinic, was a defintely game-changing moment. This move integrated the front and back ends of the pharmaceutical supply chain, creating a robust 'New Retail' structure.
• 2025 Profitability Milestone: Achieving and sustaining quarterly operational profitability, first in Q1 2024 and continuing into Q1 2025, is a crucial financial turning point. For the first quarter of 2025, the company reported net revenues of RMB3.5 billion, proving the model can generate scale and efficiency.
• 2025 Strategic Partnership: The January 2025 strategic cooperation with Eli Lilly and Company to roll out a 'fourth sales channel' solution confirms the platform's value. This partnership leverages 111, Inc.'s big data and e-prescription capabilities to help a global pharmaceutical giant find new distribution channels outside of traditional hospitals.

Here's the quick math: the shift to B2B and the focus on operational efficiency is what moved the needle from a loss to operational income of RMB3.7 million in Q1 2024. This focus is what you should be watching, as it underpins the company's financial health. You can find a deeper dive into the numbers here: Breaking Down 111, Inc. (YI) Financial Health: Key Insights for Investors

111, Inc. (YI) Ownership Structure

The ownership structure of 111, Inc. is heavily weighted toward its co-founders, who maintain significant control through a dual-class share structure, effectively concentrating voting power. This means that while the company is publicly traded, strategic decisions are defintely steered by the insider group.

111, Inc.'s Current Status

111, Inc. is a publicly traded company on the NASDAQ Global Market under the ticker symbol YI. As of November 2025, its market capitalization stands at approximately $31.72 million, reflecting its small-cap status in the healthcare sector. The company's shares are held as American Depositary Shares (ADSs), and it executed a 1-for-10 reverse ADS split in January 2025 to maintain compliance with NASDAQ listing requirements. This public status provides liquidity for investors but the company's dual-class share structure means that public shareholders have disproportionately less voting influence.

You can get a deeper look into the company's financial metrics and performance in Breaking Down 111, Inc. (YI) Financial Health: Key Insights for Investors.

111, Inc.'s Ownership Breakdown

The co-founders, Dr. Gang Yu and Mr. Junling Liu, beneficially own all of the Class B ordinary shares, which carry greater voting rights than the publicly traded Class A ordinary shares. This mechanism is key to understanding the company's governance, as it grants the founders substantial voting control despite not holding a majority of the total shares outstanding. Here's the most recent breakdown of the share ownership:

111, Inc.'s Leadership

The company is steered by an experienced leadership team, with the co-founders holding the top executive and board positions. Their long tenure-the average for the management team is about seven years-suggests a stable, albeit founder-centric, strategic direction.

• Dr. Gang Yu: Co-Founder and Executive Chairman. He has served as Executive Chairman since 2015 and brings over two decades of experience in the technology sector.
• Mr. Junling Liu: Co-Founder, Chairman, and Chief Executive Officer (CEO). He has been CEO since 2015 and is a major individual shareholder.
• Mr. Yang 'Luke' Chen: Senior Finance Executive and Director. Appointed as a Director in November 2024, his extensive financial expertise is now directly integrated into the board's decision-making.
• Haihui Wang: Co-Chief Operating Officer (COO).
• Pengcheng Zhu: Co-Chief Operating Officer (COO).

This core group, particularly the co-founders, dictates the strategic path, so their long-term vision is the primary driver of the company's future performance.

111, Inc. (YI) Mission and Values

111, Inc.'s core purpose transcends simple pharmaceutical distribution; it is about digitally reconstructing China's healthcare supply chain to drive massive efficiency and better patient access. This mission, grounded in technology, is what guides their strategic push for operational profitability-a goal they are defintely close to achieving, with a trailing twelve-month net loss of only -$10.31 million as of mid-2025.

Given Company's Core Purpose

You need to see the company's non-financial goals as a roadmap for their business model validation. Their mission and vision are tightly coupled with their unique S2B2C model (Supply chain platform to enable Businesses to better serve Consumers), which is the engine for their operational leverage. This is not just corporate fluff; it's the strategic framework that promises future returns. For a deeper dive on how these efficiencies translate to the balance sheet, check out Breaking Down 111, Inc. (YI) Financial Health: Key Insights for Investors.

Official Mission Statement

The company's formal mission is laser-focused on market dominance and technological integration. They are not just an e-commerce pharmacy; they are a platform enabler.

• Build the largest integrated online and offline healthcare platform in China powered by technology.
• Digitally connect patients with drugs and healthcare services.

Vision Statement

The vision is an extension of the mission, centered on transforming a historically fragmented industry. It maps directly to their operational focus, which saw total operating expenses drop to 5.5% of net revenues in Q1 2025.

• Reshape the value chain of the healthcare industry by digitally empowering the upstream and downstream in China.
• Transform healthcare through technology and innovation.
• Strengthen competitive capabilities to reduce operating expenses to under 5% at RMB20 billion revenue.

Given Company slogan/tagline

While 111, Inc. doesn't use a catchy consumer-facing slogan, their core operating principle-the mechanism that defines their value proposition-is the S2B2C model. This is the real tagline for investors, as it explains how they make money.

• S2B2C Model: Supply chain platform to enable Businesses to better serve Consumers.
• The goal is full integration: online and offline, self-operating and platform, and medical plus pharmaceutical plus insurance.

Here's the quick math on their operational focus: as of March 31, 2025, they held RMB556.8 million (US$76.7 million) in cash and equivalents, so they have the runway to execute this capital-intensive vision of digital transformation. They are playing the long game on efficiency.

111, Inc. (YI) How It Works

111, Inc. operates as a leading tech-enabled healthcare platform in China, essentially acting as a digital bridge that connects drug manufacturers and distributors directly to pharmacies and consumers. The company generates the vast majority of its revenue by digitally empowering the pharmaceutical supply chain, primarily through its B2B wholesale platform, 1 Pharmacy, while also serving consumers directly via its B2C retail channels like 1 Medicine Marketplace.

111, Inc.'s Product/Service Portfolio

111, Inc.'s Operational Framework

The company's core operational framework is built on a digital-first, integrated online and offline (O2O) model that drives efficiency in a traditionally fragmented supply chain. This is defintely a low-margin business, so efficiency is everything.

• Digital Integration: The platform digitally connects upstream (manufacturers) and downstream (pharmacies, consumers) partners, allowing for real-time data flow and optimized transaction matching.
• Logistics and Fulfillment: Distribution relies on a national logistics network, 'Penglai,' which provides professional and efficient pharmaceutical distribution. The company is actively expanding this, planning to add at least 14 more fulfillment centers during 2025 to increase coverage and speed.
• Operational Discipline: Continuous focus on cost management is crucial. For the second quarter of 2025, total operating expenses were RMB 185.3 million (US$25.9 million), which represents an improvement of 9.3% year-over-year and dropped to just 5.8% of net revenues. That's how you sustain profitability.
• Cash Flow Management: The model consistently generates positive cash flow, achieving RMB 112.6 million (US$15.5 million) in net cash from operating activities in Q1 2025 alone.

111, Inc.'s Strategic Advantages

The company's market success hinges on its technology and scale, which create a significant competitive moat against both traditional distributors and smaller online players. You can dig deeper into the numbers in Breaking Down 111, Inc. (YI) Financial Health: Key Insights for Investors.

• Technology and Digital Capabilities: The digital operation system is a major differentiator from traditional in-hospital pharmacy distribution models. They are intensifying AI innovation, for example, using AI algorithms to reengineer the pharmaceutical qualification review process and improve efficiency by over 100%.
• Supply Chain Expertise and Scale: Leveraging co-founders' experience from companies like Dell and Amazon, 111, Inc. has built a robust supply chain that is recognized as a best-in-class operator in the B2B space, which is critical in a low-margin environment.
• Intellectual Property: As of late 2024, the company held a total of 28 patents, which enhances its operational efficiency and supports long-term growth prospects by protecting its technological advancements.
• Market Position: The B2B segment, which generates the vast majority of revenue, capitalizes on the government's push to reduce drug overselling to hospitals, positioning the platform as a key alternative channel for drug distribution. The last twelve months' revenue, as of June 30, 2025, was approximately RMB 14.18 billion, showing the scale of their platform.

111, Inc. (YI) How It Makes Money

111, Inc. makes money primarily through the wholesale distribution of pharmaceutical and health products to a vast network of offline pharmacies across China via its B2B platform, 1 Drug Mall, which is a high-volume, low-margin business. Secondarily, revenue comes from the direct-to-consumer (B2C) sale of products and online healthcare services through its 1 Pharmacy and 1 Clinic platforms, which carry a higher margin but represent a much smaller portion of the total sales volume.

Given Company's Revenue Breakdown

The company's revenue profile is heavily skewed toward its wholesale operations, which serve as the backbone of its integrated online-to-offline (O2O) supply chain. For the first quarter of 2025, total net revenues were approximately RMB3.5 billion (US$486.3 million), with the B2B segment dominating the mix.

Business Economics

The core economic engine of 111, Inc. is its B2B platform, which leverages technology to drive efficiency in a traditionally fragmented pharmaceutical distribution market. The strategy is to accept a lower margin on wholesale product sales in exchange for massive volume and market penetration, which then creates a platform for higher-margin service revenue.

• B2B Margin Profile: The B2B segment is a high-volume, low-margin business, a classic wholesale model where operating efficiency is the key competitive advantage. This scale allows 111, Inc. to negotiate favorable terms and purchase rebates from upstream pharmaceutical partners.
• B2C Margin Profile: The B2C segment, which includes direct-to-consumer product sales and online consultation fees from 1 Clinic, operates at a significantly higher gross margin. However, the segment profit percentage decreased from 23.1% to 17.4% in Q1 2025, reflecting pricing pressure and market headwinds.
• Value-Added Services: A critical growth area is the sale of marketing promotional products and channel data services to pharmaceutical companies, which saw sales revenue increase by a significant 53.6% in Q2 2025. This is a higher-margin revenue stream built on the foundation of the B2B distribution network.

The company is defintely focused on cost management, which is essential in a low-margin environment. You can see their strategic focus on digital empowerment in their Mission Statement, Vision, & Core Values of 111, Inc. (YI).

Given Company's Financial Performance

The company has maintained operational profitability and positive cash flow, which is a significant achievement given the challenging macroeconomic environment in 2025. This shows a disciplined approach to managing the low-margin wholesale business.

• Revenue Scale: Trailing Twelve Months (TTM) revenue as of mid-2025 was approximately $1.97 Billion USD (CN¥14.18 Billion). [cite: 6 from step 2]
• Operational Profitability: For Q1 2025, the company reported Non-GAAP income from operations of RMB4.3 million (US$0.6 million), demonstrating sustained profitability.
• Efficiency Gains: Total operating expenses as a percentage of net revenues improved to 5.5% in Q1 2025, a decrease of 30 basis points year-over-year, driven by reductions in selling, marketing, and technology expenses.
• Cash Flow Health: The business generated positive net cash from operating activities of RMB112.6 million (US$15.5 million) in Q1 2025, providing a crucial buffer for ongoing supply chain expansion.

Here's the quick math: with a gross segment profit of only RMB195.1 million (US$26.9 million) in Q1 2025, every basis point of operating expense reduction is a direct contributor to the bottom line, which is why the cost-cutting focus is so important.

111, Inc. (YI) Market Position & Future Outlook

111, Inc. is strategically positioned as a critical digital enabler for China's vast offline pharmacy network, maintaining operational profitability and positive operating cash flow through the first half of 2025 despite a challenging economic climate. The company's future trajectory hinges on scaling its proprietary B2B supply chain and digital marketing services to capture market share from traditional pharmaceutical distribution.

Competitive Landscape

In the Chinese digital healthcare market, 111, Inc. competes against two dominant, ecosystem-backed giants. While the company is ranked lower in the overall online healthcare space-around 30th among 811 active competitors-its core strength lies in its deep integration with the downstream B2B pharmacy supply chain, a segment where the larger players are less entrenched.

Opportunities & Challenges

The structural shift toward digital health in China presents clear opportunities, with the overall digital health market projected to reach US$44.8 billion in 2025. The company's focus on operational efficiency is evident, with total operating expenses reduced by 9.3% year-over-year in Q2 2025.

Industry Position

111, Inc. is not a direct challenger to the B2C dominance of its larger rivals, but it is a critical infrastructure play. Its value proposition is in digitally empowering the entire pharmaceutical value chain, especially the fragmented offline retail pharmacy segment. This is defintely a niche with high barriers to entry.

• The B2B segment is the primary revenue driver, distinguishing the company from B2C-focused competitors.
• The 'MANTIANXING' (Vast Sky Star) initiative, which expanded fulfillment centers to 19 locations, solidifies its position as a supply chain integrator for drug manufacturers and pharmacies.
• The company's non-GAAP net loss attributable to ordinary shareholders was RMB 16.7 million (US$2.3 million) in Q2 2025, which, while a loss, is a small fraction of its net revenues, showing a focus on margin improvement via cost management.

For a deeper dive into the capital structure and institutional interest, you should read Exploring 111, Inc. (YI) Investor Profile: Who's Buying and Why?