111, Inc. (YI): Marketing Mix Analysis [Dec-2025 Updated]

You're looking at a major Chinese digital health platform, and honestly, the picture for 111, Inc. (YI) as of late 2025 is a classic case of strategic tension. This isn't just an e-commerce play; it's a massive S2B2C (Supply chain to Business to Consumer) operation reshaping healthcare delivery, built on digital empowerment. While their Trailing Twelve Months revenue hit about CNY14.18 billion ending June 2025, you see mixed signals: Q2 net revenues slipped 6.4% year-over-year, yet their promotional product sales jumped 53.6%. I've mapped out their Product, Place, Promotion, and Price strategy below-it's all about digital muscle meeting real-world logistics. Stick around; the details show exactly where they are betting their next move.

111, Inc. (YI) - Marketing Mix: Product

You're looking at the core offerings of 111, Inc. (YI) as of late 2025. The product element here isn't just physical drugs; it's a technology-driven ecosystem connecting supply and demand across China's healthcare value chain.

The foundation of the product offering is the integrated series "1" system, which combines direct-to-consumer and business-to-business services. This system includes the B2C online retail pharmacy, 1 Drugstore, and the B2B wholesale platform, 1 Drug Mall.

The B2B platform, 1 Drug Mall, serves as a critical component, providing drug procurement services for more than 93,000 drugstore members as of the latest reports. This platform leverages underlying supply chain management, IT, cloud computing, and AI to drive its cloud service platforms.

For online healthcare services, 111, Inc. (YI) offers its internet hospital, 1 Clinic. This service provides consumers with cost-effective and convenient online consultation, electronic prescription service, and patient management service.

The company's structure supports an S2B2C (Supply chain to Business to Consumer) model, where the supply chain platform enables businesses, like the network pharmacies, to serve end consumers. This is reinforced by the fact that 111, Inc. (YI) has the largest virtual pharmacy network in China, enabling offline pharmacies to use cloud-based services.

Omni-channel drug commercialization is a key product feature for strategic partners. This support includes specific digital services:

• Digital marketing support.
• Patient education initiatives.
• Data analytics services.
• Pricing monitoring.

The company also provides cloud-based inventory and smart procurement services designed to help offline pharmacies better serve their customers.

For the second quarter of 2025, the financial scale of these operations shows:

The overall product ecosystem contributed to the company maintaining operational profitability in Q2 2025. Cash and short-term investments as of June 30, 2025, stood at RMB513.1 million (US$71.6 million).

The 1 Drugstore platform itself has been recognized as ranking first in a competitiveness evaluation among B2C medicine platforms based on indicators like scale of product management and online service ability. This platform, along with 1 Clinic and 1 Drug Mall, forms the core of the Internet+ pharmaceutical health ecosystem.

The platform's design allows for continuous improvement in operational efficiency; for instance, total operating expenses as a percentage of net revenues decreased by 20 basis points year-over-year in Q2 2025, moving to 5.8%.

The product strategy is definitely centered on digital empowerment across the entire value chain.

111, Inc. (YI) - Marketing Mix: Place

111, Inc. (YI) concentrates its distribution strategy on Mainland China, aiming to reshape the domestic healthcare value chain through its integrated platform. The company operates through two primary segments: the B2C business serving individual consumers and the B2B segment serving corporate customers, deriving a majority of its revenue from the B2B segment.

The physical distribution backbone is being fortified by the 'MANTIANXING' supply chain project. As of the second quarter of 2025, this strategic initiative has resulted in the expansion of fulfillment centers to 19 locations across China. This physical infrastructure supports the company's overall scale, with Trailing Twelve Months (TTM) revenue for 2025 reported at approximately $1.97 Billion USD.

The national logistics network, which the company refers to in its strategy as 'Penglai' for its domestic reach, is designed for high-speed fulfillment. This network enables delivery to over 300 major cities nationwide within 24 hours, with coverage for the entire nation guaranteed within 72 hours. The efficiency gains from this digitalized long-haul and last-mile distribution model are significant:

• Delivery costs have been slashed by 15%.
• Delivery damage rates have been cut by 55%.

The digital component of the Place strategy centers on the virtual pharmacy network, which is positioned as the largest in China, connecting online and offline channels. This network is crucial for the wholesale (B2B) operations, allowing 111, Inc. (YI) to act as a one-stop shop for pharmacies.

The scale of this virtual network and its upstream integration is detailed below:

The distribution model inherently involves direct distribution to consumers via its online retail pharmacy, 1 Pharmacy, and wholesale distribution to its network of pharmacy customers through the 1 Drug Mall platform. The operational discipline supporting this distribution is reflected in Q2 2025 results, where total operating expenses were RMB185.3 million (US$25.9 million), representing a 9.3% improvement year-over-year.

111, Inc. (YI) - Marketing Mix: Promotion

You're looking at how 111, Inc. (YI) is communicating its value proposition in late 2025. The promotion strategy is clearly tied to digitally empowering both the upstream suppliers and the downstream pharmacy network. This is where the rubber meets the road for their tech-enabled platform.

The strategic cooperation memorandum of understanding signed in January 2025 with Eli Lilly and Company is a prime example of this focus. This deal aims to roll out a "fourth sales channel" solution, heavily relying on big data, e-prescriptions, doctor services, and patient education. Lilly will leverage 111, Inc.'s cloud-based solutions for online diagnosis, e-prescription, warehousing and distribution, and patient support programs. 111, Inc. is serving as Lilly's designated e-prescription platform to expand new retail channels like private hospitals and pharmacies through its online B2B model.

The results from the second quarter of 2025 show tangible traction from these promotional and digital enablement efforts. Marketing promotional products now quickly reach pharmacies nationwide through the 111 digital marketing platform. Here's a quick look at the promotion-related financials from the Q2 2025 report:

The company maintains that its strategy remains centered on leveraging technology to empower the healthcare value chain. This involves continuing to invest strategically in AI and digital solutions to enhance the supply chain and deepen customer engagement, as mentioned in their Q1 2025 commentary. While a specific 2025 investment dollar amount for AI/cloud isn't immediately available, the commitment is evident in the platform's capabilities, which include digital marketing, patient education, data analytics, and pricing monitoring for strategic partners.

Overall cost discipline also supports the promotional efficiency. Total operating expenses, which encompass selling and marketing, showed improvement in Q2 2025. The company reported a 9.3% year-over-year reduction in total operating expenses for the quarter, with these expenses as a percentage of net revenues decreasing by 20 basis points to 5.8%.

The promotional activities are supported by the platform's infrastructure, which includes:

• Leveraging the largest virtual pharmacy network in China.
• Providing omni-channel support to strategic partners.
• Offering services like digital marketing and patient education.

111, Inc. (YI) - Marketing Mix: Price

You're looking at the pricing structure for 111, Inc. (YI) as of late 2025, which is heavily influenced by the need to maintain competitiveness while managing market pressures. The company's pricing policies are clearly being tested, given the recent top-line performance. The Trailing Twelve Months (TTM) revenue ending June 30, 2025, was approximately CNY14.18 billion, which represented a year-over-year decline of -3.69%.

The immediate pricing environment is reflected in the second quarter of 2025 results. Net revenues for Q2 2025 decreased by 6.4% year-over-year, landing at RMB3.2 billion (or US$447.5 million). This drop strongly suggests pricing pressure in a tough market, forcing 111, Inc. to be very deliberate about the amount customers pay to obtain services and products.

However, the company is demonstrating operational discipline, which supports its ability to offer competitive pricing. Total operating expenses in Q2 2025 were RMB185.3 million (US$25.9 million), an improvement of 9.3% compared to the prior year. This focus on internal efficiency is key to its pricing power. Operational discipline reduced total operating expenses to 5.8% of net revenues in Q2 2025, down from 6.0% in the same quarter last year. This 20 basis point improvement is defintely a lever they are pulling to keep prices attractive.

Here's a quick look at the key financial figures that frame the pricing reality for 111, Inc. (YI) as of the Q2 2025 report:

The strategy isn't uniform across all offerings. For its technology-focused services, 111, Inc. employs a value-based pricing model. This applies to tech services like data analytics and digital marketing provided to partners, where the price reflects the perceived benefit and outcome rather than just the cost to deliver.

The competitive pricing strategy is also visibly driven by supply chain efficiency and scale, particularly through initiatives like the 'MANTIANXING' project. This project expanded fulfillment centers to 19 locations, which supports lower fulfillment costs, though fulfillment expenses as a percentage of net revenues slightly increased to 2.8% in Q2 2025 from 2.6% the prior year.

You should note the following strategic pricing considerations:

• Value-based pricing for tech services like data analytics.
• Competitive pricing supported by supply chain scale.
• Operational discipline keeping OpEx at 5.8% of revenue.
• Sales revenue from marketing products surged by 53.6% in Q2 2025.

Finance: draft 13-week cash view by Friday.