111, Inc. (YI): Business Model Canvas [Dec-2025 Updated]

You're looking to get a clear, unvarnished view of how this digital health giant actually generates its revenue, and frankly, the whole operation hinges on its S2B2C (Supply-to-Business-to-Consumer) infrastructure. As an analyst who has mapped out complex models for years, I can tell you this isn't just about selling pills online; it's a massive logistics and tech play connecting over 500 pharmaceutical companies to a virtual network serving roughly 0.58 million independent pharmacies, all while hitting a Trailing Twelve Months revenue of $1.97 Billion USD as of June 30, 2025. We've distilled their entire strategy-from the 19 fulfillment centers they operate to the B2B sales that drive the majority of their income-into the nine essential building blocks below, so you can see exactly where the near-term risks and growth levers are. Check out the full canvas to understand the mechanics.

111, Inc. (YI) - Canvas Business Model: Key Partnerships

You're looking at the backbone of 111, Inc. (YI)'s operations, which is heavily reliant on its external relationships to move product and power its digital platform. As of the second quarter of 2025, the company maintained operational profitability and positive operating cash flow for the first half of the year, suggesting these partnerships are, at least operationally, holding up despite a 6.4% year-over-year decrease in net revenues for Q2 2025.

The strength of the platform is directly tied to the breadth of its network, which is built on these key alliances. For instance, the company's strategic focus on cost management saw total operating expenses drop by 9.3% year-over-year in Q2 2025, which reflects efficiency gains likely shared or enabled by these partners.

Here is a breakdown of the quantifiable aspects of these Key Partnerships:

The direct procurement deals are critical for sourcing the vast selection of pharmaceutical products available through the 1 Drug Mall (online B2B pharmacy platform). The company reports having direct procurement deals with over 500 global pharmaceutical companies. This scale is what allows 111, Inc. (YI) to serve its B2B customers, which is where the majority of its revenue comes from.

For the logistics and supply chain, the network is branded as Kunpeng, not Penglai, and it is central to the company's ability to deliver. This network includes partnerships with over 4,500 distributors. The expansion of fulfillment centers to 19 locations, announced in late 2024, was designed to support this network. The efficiency gains reported from the Kunpeng network include a 15% slash in delivery costs and a 55% cut in delivery damage rates.

Regarding technology, 111, Inc. (YI) enables its network of offline pharmacies to better serve customers using cloud-based services. The company's smart supply chain management systems, which are core drivers of success, incorporate over 30 self-developed technologies. These technologies cover everything from procurement to distribution, supporting the omni-channel drug commercialization platform offered to strategic partners. This platform includes services like data analytics, which is a key output from their technology partnerships.

The strategic alliances for general agency drug distribution are quantified by the sheer number of entities they connect with:

• Partnerships with over 4,500 distributors.
• The nationwide virtual pharmacy network serves approximately 470,000 pharmacies.

The technology providers support the platform that generated net revenues of RMB3.5 billion (US$486.3 million) in Q1 2025. The focus on operational efficiency, evidenced by the 9.3% decrease in total operating expenses in Q2 2025, is a direct reflection of leveraging these technological and logistical partnerships effectively.

111, Inc. (YI) - Canvas Business Model: Key Activities

You're looking at how 111, Inc. (YI) actually makes things happen across its platform as of late 2025. The core is digitizing the drug supply chain, but the execution across the four main pillars shows where the focus is right now.

Operating the B2B wholesale platform (1 Drug Mall)

This platform acts as the one-stop shop for pharmacies needing to source products. For the second quarter of 2025, the platform contributed to the overall top line, which hit RMB3.2 billion (or US$447.5 million) in net revenues. The gross segment profit for that quarter was RMB185.4 million (US$25.9 million). Honestly, the B2B side is critical for volume, even as the B2C segment saw a reported decline in Q1 2025. The company is definitely pushing for efficiency here, as total operating expenses as a percentage of net revenues improved to 5.8% in Q2 2025.

Managing the 'MANTIANXING' smart supply chain and logistics

This is where the tech investment really shows up in physical operations. By Q2 2025, the strategic expansion of fulfillment centers had grown the network to 19 locations nationwide. This robust network is designed to deliver to over 300 major cities within 24 hours, covering the entire nation within 72 hours. The digitalized long-haul and last-mile models within the 'Kunpeng' logistics network have delivered hard savings, slashing delivery costs by 15% and cutting delivery damage rates by 55%. Fulfillment expenses for Q2 2025 specifically totaled RMB90.2 million (US$12.6 million).

Developing AI and digital applications for operational efficiency

111, Inc. is heavily leaning on AI to drive down costs and speed up processes, which is key when your market cap sits at $32.67 Million USD as of December 2025. They are using AI across several functions to boost operational performance. For instance, the AI order entry system, which uses image recognition and text parsing, completes purchase/sales document generation in 3 seconds, improving efficiency by over 60%. Also, using AI for precise new product introductions, by analyzing customer profiles and market trends, has seen efficiency gains of 83%. These agents, like medication guidance and merchant operation analysis agents, are built to enhance the platform's core matching capabilities.

Providing online consultation and e-prescription services (1 Clinic)

The '1 Clinic' internet hospital is the digital front door for many consumers, offering online consultation and electronic prescription services. While specific revenue breakdowns for this service aren't always isolated in the top-line reports, its existence supports the overall strategy of digitally empowering downstream healthcare access. The company maintained positive operating cash flow for the first half of 2025, which is the financial fuel keeping these service-oriented activities running smoothly. The overall Trailing Twelve Months (TTM) revenue as of the latest reports was $1.97 Billion USD.

Here's a quick look at some of the key financial and operational metrics from the first half of 2025:

The operational focus is clearly on leveraging technology to manage scale and cost, as seen in the expense control and supply chain improvements. You can see the direct impact of these activities in the cost structure:

• Delivery costs reduced by 15%.
• Delivery damage rates reduced by 55%.
• AI document entry efficiency improved by over 60%.
• AI new product introduction efficiency improved by 83%.
• Selling and marketing expenses decreased by 17.7% in Q2 2025 YoY.

The company is defintely trying to run a leaner operation while maintaining its digital infrastructure.

Finance: draft 13-week cash view by Friday.

111, Inc. (YI) - Canvas Business Model: Key Resources

You're looking at the core assets 111, Inc. (YI) relies on to run its tech-enabled healthcare platform. These aren't just line items on a balance sheet; they are the engines driving their S2B2C (Supply chain platform to enable Businesses to better serve Consumers) model.

The foundation is the integrated online and offline healthcare platform itself. This structure allows 111, Inc. (YI) to connect drug manufacturers and distributors directly to pharmacies and consumers, covering its B2C retail channels like 1 Medicine and its dominant B2B wholesale platform, 1 Drug Mall, alongside the 1 Clinic internet hospital. This integration is what they call realizing the full development of B and C, online and offline, self-operating and platform, and medical plus pharmaceutical plus insurance.

A massive component of this is the large virtual pharmacy network. This network is described as the largest in China, indirectly serving an estimated 0.58 million pharmacies. This scale is what allows 111, Inc. (YI) to empower offline pharmacies with cloud-based services.

Physically, the company has been aggressively building out its logistics backbone. As of Q2 2025, the physical infrastructure included 19 fulfillment centers nationwide, part of the 'MANTIANXING' supply chain project. These centers are designed to support the national logistics network, 'Kunpeng,' enabling coverage of over 890 counties and cities within 24 hours.

Underpinning all operations is the proprietary data analytics and cloud-based technology. This technology is central to their strategic partnerships, such as the one with Eli Lilly and Company, leveraging big data and e-prescription capabilities. The company heavily invests in AI to drive efficiency:

• AI order entry system improved product listing efficiency by over 60%.
• AI for precise new product introduction improved efficiency by 83%.
• Development of an AI agent matrix for medication guidance and operational analysis.

Here's a quick look at some key operational metrics from the Q2 2025 results, showing how these resources translated into near-term performance:

The platform's ability to maintain operational profitability and positive operating cash flow through the first half of 2025 is directly attributable to the scaling and efficiency gains from these tangible and intangible assets. The focus on digital enablement is what moves the needle. Finance: draft 13-week cash view by Friday.

111, Inc. (YI) - Canvas Business Model: Value Propositions

You're looking at the core benefits 111, Inc. (YI) delivers across its integrated online and offline healthcare platform as of late 2025. The numbers show a company focused on driving efficiency for its partners while scaling access for patients, even while navigating a tough macro environment.

One-stop, efficient sourcing for pharmacies (1 Drug Mall)

The 1 Drug Mall platform serves as the online wholesale pharmacy, acting as a one-stop shop for offline pharmacies to source products. This B2B focus is where a majority of 111, Inc. (YI)'s revenue is derived. The operational backbone supporting this value proposition saw tangible improvements in the second quarter of 2025.

The company expanded its fulfillment centers to 19 locations under the 'MANTIANXING' supply chain project by Q2 2025. This physical network supports a service promise: delivery to over 300 major cities within 24 hours, with national coverage guaranteed within 72 hours. That speed and reliability is a direct value-add for pharmacy partners.

Here are the recent partnership engagement metrics:

Increased patient access to cost-effective, reliable medicine

111, Inc. (YI) connects millions of consumers to pharmaceutical products and healthcare services through its 1 Pharmacy retail platform and its offline virtual pharmacy network. The scale of the business in 2025 reflects this access push. For the last twelve months ending June 30, 2025, the Trailing Twelve Months (TTM) revenue reached $1.97 Billion USD, which equates to approximately CNY14.18 billion. Still, you have to note that net revenues for Q2 2025 actually decreased by 6.4% compared to the same quarter last year, showing the pressure in the current market.

For the first quarter of 2025, net revenues were reported as RMB3.5 billion, or about US$486.3 million. The company managed to maintain positive operating cash flow in the first half of 2025, which is a key indicator of financial discipline supporting ongoing operations.

• Q1 2025 Net Cash from Operating Activities: RMB112.6 million (US$15.5 million).
• Q1 2025 Total Operating Expenses: RMB195.0 million (US$26.9 million).
• Q2 2025 Total Operating Expenses: RMB185.3 million (US$25.9 million).

Digital empowerment for upstream partners (pharmaceutical companies)

This value proposition centers on providing an omni-channel drug commercialization platform to strategic partners. This isn't just about moving boxes; it's about providing digital services that help manufacturers manage products effectively. The success here is clearly visible in the year-over-year growth metrics from Q2 2025.

The company offers services like digital marketing, patient education, data analytics, and pricing monitoring to these partners. The market is responding to this digital push, as evidenced by the growth in associated revenue streams. It's defintely a sign that partners are using the digital tools to reach consumers.

• Sales revenue from marketing promotional products saw a year-over-year increase of 53.6% in Q2 2025.
• The associated customer count for these services grew by 19.0% year-over-year in Q2 2025.

Convenient, remote healthcare via online consultation

Through its internet hospital, 1 Clinic, 111, Inc. (YI) delivers convenient, cost-effective online consultation and electronic prescription services directly to consumers. While specific consultation volume numbers aren't public, the platform's contribution to the company's operational stability is noted. The company achieved sustained operational profitability in Q1 2025.

The bottom-line results from the service segment show the focus on efficiency is translating into tangible, albeit small, operational gains. For instance, Non-GAAP income from operations was RMB4.3 million (approximately US$0.6 million) in Q1 2025, improving to RMB3.0 million (US$0.4 million) in Q2 2025, despite the net revenue dip that quarter.

If onboarding takes 14+ days, churn risk rises, but the digital nature of 1 Clinic inherently reduces physical friction for the patient.

111, Inc. (YI) - Canvas Business Model: Customer Relationships

You're looking at how 111, Inc. (YI) manages its connections with customers, which splits between high-volume digital interactions and dedicated partner support. The sheer scale of transactions dictates much of this structure.

Automated, high-volume transactional sales (B2B and B2C)

The foundation of volume is the platform's transactional throughput. For the first quarter of 2025, net revenues were reported at RMB 3.5 billion (US$486.3 million). This revenue base is supported by the massive scale of the underlying B2B and B2C transactions flowing through the system. To give you a sense of the recent trend, net revenues for the second quarter of 2025 showed a year-over-year decrease of 6.4%. The operational efficiency required to handle this volume is evident in the cost control measures, with total operating expenses in Q1 2025 being RMB 195.0 million (US$26.9 million).

The infrastructure supporting these transactions is constantly being scaled. As of the second quarter of 2025, strategic initiatives like the 'MANTIANXING' supply chain project expanded fulfillment centers to 19 locations.

Dedicated sales and service teams for strategic B2B partners

For the larger, more complex B2B relationships, 111, Inc. (YI) moves away from pure automation. The company provides an omni-channel drug commercialization platform to its strategic partners. While the exact size of the dedicated sales team isn't public, the financial commitment to marketing and engagement suggests significant human capital allocation here. For instance, selling and marketing expenses in Q1 2025 were RMB 67.9 million (US$9.4 million). This spend supports the high-touch engagement needed for these key accounts.

Digital marketing and patient education services for partners

A core offering to these strategic B2B partners includes services like digital marketing and patient education. The focus on digital promotion is reflected in the growth seen in related revenue streams. Sales revenue from marketing promotional products saw a substantial increase of 53.6% year-over-year in the second quarter of 2025. This indicates that the digital services component of the customer relationship is a significant growth driver.

Self-service platforms for ordering and inventory management

The digital infrastructure supports self-service for both consumers and pharmacy partners. For the consumer side, the platform's digital customer support system handles massive volume. Based on 2024 metrics, the system managed approximately 2.4 million online chat support interactions, 1.8 million mobile app support interactions, and 1.2 million email support interactions annually. The platform, 1 Medicine, acts as a one-stop shop for pharmacies to source products, which inherently includes self-service ordering and inventory visibility.

Here's a look at the scale of digital engagement these self-service channels manage:

• Online Chat Support Interactions (Annualized Estimate) - 2.4 million
• Mobile App Support Interactions (Annualized Estimate) - 1.8 million
• Email Support Interactions (Annualized Estimate) - 1.2 million
• Total Registered Users (As of Q3 2023, providing context for scale) - 4.2 million

The company's commitment to technology is also underscored by its intellectual property, having acquired four new patents recently, bringing the total to 28 as of August 2024. That's a lot of proprietary tech helping things run smoothly.

Finance: draft 13-week cash view by Friday.

111, Inc. (YI) - Canvas Business Model: Channels

The Channels component of 111, Inc. (YI) is defined by an integrated online and offline ecosystem designed to connect patients with drugs and healthcare services across China. This structure is segmented into B2C and B2B operations, supported by a significant physical logistics footprint.

The company's Q2 2025 net revenues were reported at 3.2 billion yuan. For the last twelve months ending June 30, 2025, total revenue reached approximately CNY 14.18 billion.

The company maintains operational profitability and positive operating cash flow for the first half of 2025.

Online B2B wholesale platform (1 Drug Mall)

The 1 Drug Mall functions as the online wholesale pharmacy, serving as a one-stop shop for other pharmacies to source pharmaceutical products. This platform is a core part of the company's B2B segment. Sales revenue from marketing products saw a surge of 53.6% in Q2 2025.

Online B2C retail pharmacy (1 Drugstore)

The 1 Drugstore, also referred to as 1 Pharmacy, is the online retail pharmacy platform, providing pharmaceutical and other health and wellness products directly to consumers. This channel falls under the B2C operating segment. Net revenues for Q1 2025 were RMB 3.5 billion (US$486.3 million).

Internet hospital platform (1 Clinic)

The 1 Clinic platform delivers online healthcare services, including cost-effective online consultation, electronic prescription services, and patient management services to consumers.

Offline virtual pharmacy network (last-mile fulfillment)

111, Inc. enables offline pharmacies to enhance customer service through cloud-based services, leveraging its virtual pharmacy network. The company states it has the largest virtual pharmacy network in China. Strategic initiatives, including the 'MANTIANXING' supply chain project, have resulted in 19 digital order fulfillment centers established to date. This network is capable of covering over 890 counties and cities nationwide within 24 hours.

Here's a quick look at the segment and infrastructure scale as of the first half of 2025:

The company's omni-channel support for strategic partners includes services such as digital marketing, patient education, data analytics, and pricing monitoring.

The company utilizes an AI order entry system within its supply chain, which improved document generation efficiency by over 60%. AI was also used for new product introductions, improving efficiency by 83%.

You can see the focus is on digital efficiency driving the physical fulfillment.

• Online B2C platform: 1 Drugstore/1 Pharmacy
• Online B2B platform: 1 Drug Mall
• Online Healthcare: 1 Clinic
• Offline Reach: Largest virtual pharmacy network in China

111, Inc. (YI) - Canvas Business Model: Customer Segments

You're looking at the core of 111, Inc. (YI)'s strategy, which is built on a dual-sided platform serving both businesses and individual patients. Honestly, their success hinges on how well they integrate these groups through their digital ecosystem.

The company operates through two primary segments: B2C, which is revenue from individual consumers, and B2B, which covers revenue from corporate customers, including pharmacies and manufacturers. To be fair, the search results indicate they derive a majority of their revenue from the B2B segment.

Here is a breakdown of the key customer groups they serve and the latest operational statistics we have from their mid-2025 reporting:

• Small to medium-sized independent pharmacies (primary B2B focus): These partners use the 1 Drug Mall platform to source products.
• Pharmaceutical manufacturers (upstream partners): They receive omni-channel support, including digital marketing and data analytics.
• Individual consumers seeking medicine and healthcare services (B2C): They are served via 1 Pharmacy (online retail) and 1 Clinic (internet hospital).
• Chain drug stores and other corporate customers: This group is part of the B2B revenue stream.

The growth in the B2B side, which digitally empowers pharmacies, is showing real traction. For example, in the second quarter of 2025, sales revenue from marketing promotional products, a service aimed at these partners, increased by a staggering 53.6% year-over-year. The customer count for this service also rose by 19.0% year-over-year in Q2 2025.

We can map the scale of their operations and the focus on these segments using the financial data from the first half of 2025. The Trailing Twelve Months (TTM) revenue for 2025 reached approximately $1.97 Billion USD.

The B2C side is about direct access for millions of consumers through 1 Pharmacy and 1 Clinic. For the upstream partners, which include pharmaceutical manufacturers, the value proposition is digital empowerment, evidenced by the strong growth in marketing-related sales. The company is defintely using its digital tools to drive engagement across its entire partner base.

If onboarding for new pharmacy partners takes longer than expected, churn risk rises. Finance: draft 13-week cash view by Friday.

111, Inc. (YI) - Canvas Business Model: Cost Structure

You're looking at the hard numbers for 111, Inc. (YI)'s cost base as of the second quarter of 2025. It's all about the direct costs of goods and the operational spend to move them.

The infrastructure supporting this is scaling up. That's a key part of the capital outlay you need to track.

• Fulfillment center network reached 19 locations nationwide by the end of Q2 2025.
• The company is focused on AI innovation and digitalization for supply chain optimization.

For technology development and maintenance, which covers things like AI and cloud usage, the direct expense line shows a clear trend of cost reduction in the quarter.

• Technology expenses were RMB 14.9 million (US$2.1 million) in Q2 2025.
• This represented a 19.0% year-over-year reduction.

Selling and marketing shows a significant pullback in spend, which is worth noting against the revenue performance.

• Selling and marketing expenses were RMB 66.2 million (US$9.2 million) in Q2 2025.
• That's a 17.7% drop compared to the same period last year.

Overall operating expenses as a percentage of net revenues improved, coming in at 5.8% for Q2 2025, down from 6.0% in Q2 2024. That's efficiency in action.

111, Inc. (YI) - Canvas Business Model: Revenue Streams

The revenue generation for 111, Inc. (YI) is anchored in its tech-enabled healthcare platform, primarily driven by the distribution of pharmaceutical products. Sales of pharmaceutical products via the B2B segment constitute the majority of the total revenue, flowing through its online wholesale pharmacy, 1 Drug Mall, which serves as a one-stop shop for offline pharmacies to source products. This wholesale channel supports the extensive virtual pharmacy network across China.

The B2C segment also contributes significantly, providing millions of consumers with direct access to pharmaceutical products through its online retail pharmacy, 1 Drugstore, and its offline virtual pharmacy network. The company's overall financial performance for the second quarter of 2025 showed net revenues of 3.2 billion yuan (RMB), though this represented a decrease of 6.4% compared to the same period last year.

A notable growth area is revenue from marketing promotional products. This stream saw a substantial year-over-year increase of 53.6% in Q2 2025. This success is tied to the digital marketing platform empowering upstream partners, and the customer count supporting this segment grew by 19.0% YoY in the same quarter.

Service fees from online consultation and e-prescription are generated through the internet hospital, 1 Clinic. This service provides consumers with cost-effective and convenient access to healthcare services.

Here's a quick look at some key financial metrics around the revenue base as of mid-2025:

The revenue derived from 1 Clinic services is built upon specific digital offerings:

• Online consultation
• Electronic prescription service
• Patient management service