111, Inc. focuses on providing a range of services and products, primarily within the pharmaceutical and healthcare sectors.
The company provides hundreds of millions of consumers with better access to pharmaceutical products and medical services, directly through its online retail pharmacy and indirectly through offline pharmacy network. The company’s online wholesale pharmacy, 1 Pharmacy serves as a shop for pharmacies, clinics and hospitals, among others, to source a vast selection of pharma...
111, Inc. focuses on providing a range of services and products, primarily within the pharmaceutical and healthcare sectors.
The company provides hundreds of millions of consumers with better access to pharmaceutical products and medical services, directly through its online retail pharmacy and indirectly through offline pharmacy network. The company’s online wholesale pharmacy, 1 Pharmacy serves as a shop for pharmacies, clinics and hospitals, among others, to source a vast selection of pharmaceutical products.
Services to Pharmaceutical Companies
The company sources products from pharmaceutical companies and distributors, while at the same time providing them with data services and other value-added services.
Omni-channel Service
Omni-channel model plays an important role in facilitating the commercialization of drugs across the nation, especially in the market outside of hospitals. Partners in this model include pharmacies, public and private hospitals, clinics, community health centers, distributors, medical representatives, and 1 Medicine Marketplace app. This model offers multiple channels for pharmaceutical companies to simultaneously reach healthcare providers nationwide and educates them about new drugs and therapies. This model significantly reduces time, resources and cost, which allow drugs to be distributed quickly and efficiently.
Supply Chain Integration Services
Leveraging its established supply chain system, the company provides supply chain integration services to help pharmaceutical companies manage their products through online and offline distribution channels. In addition to its supply chain integration service, the company also provides product promotion services, customer analytic services, patient education services, and brand awareness services.
Marketing and Channel Data Services
Leveraging its direct reach to many touchpoints of the healthcare and pharmaceutical value chain, the company launched marketing and channel data services to help its pharmaceutical companies expand their reach and gain valuable insights to the distribution channel and consumers. It compiles, aggregates, and analyzes detailed sales data to uncover purchase patterns and predict future purchase behaviors and demand. For a particular product, it analyzes the regional and seasonal sales patterns, the amounts of orders, the frequency of purchases, any particular preference for packaging, and other factors that may affect sales. Data mining of available data is a powerful tool to predict consumer behaviors and market trends, allowing pharmaceutical companies to make knowledge-driven decisions in their sales forecasts and budgeting.
1 Health Membership Pharmaceutical Company Enablement Program
The company launched the 1 Health Membership program in 2021. Its 1 Health Membership program is a membership model that effectively connects pharmaceutical companies with pharmacies and patients to empower small-to-mid size pharmacy chains, while promoting incremental products sales for pharmaceutical companies. This program allows pharmaceutical companies to identify market opportunities through data integration, and leverage on 1 Health’s sales power execute sales promotion strategy.
Products and Services to Pharmacies
The company has enabled more than 497,000 offline pharmacies, as of December 31, 2023, to better serve their consumers. The pharmacy customers served include small and medium-sized retail pharmacy chains, independent pharmacies, and in-house pharmacies within clinics and private hospitals, spanning across 31 provinces in China.
Online Wholesale Pharmacy
The company provides comprehensive, intelligent and integrated distribution solutions through its online wholesale pharmacy, 1 Pharmacy, available both through 1 Pharmacy app and website. Overall, its business involves a process of sourcing from suppliers, warehousing, processing orders and invoicing, payment collection, and delivering to pharmacies. These pharmacy customers include independent pharmacies, pharmacy chains, in-house pharmacies within clinics and private hospitals, as well as certain select distributors that have both retail and wholesale businesses. 1 Pharmacy features an extensive selection of pharmaceutical and other health and wellness products sourced from pharmaceutical companies and other suppliers. A substantial majority of prescription and OTC drugs displayed on 1 Pharmacy are available under direct sales model.
Direct Sales Model
The company primarily conducts wholesale distribution business through direct sales model, where it procures pharmaceutical products from pharmaceutical companies or distributors and sells to pharmacy customers. As of December 31, 2023, it directly sourced from approximately 500 pharmaceutical companies. Leveraging strong relationship with suppliers, it offers a comprehensive selection of pharmaceutical products at market-competitive pricing. Under the direct sales model, company is responsible for the fulfillment and delivery of the products sold.
Marketplace Model
The company also operates an online marketplace where third-party sellers can directly sell to pharmacies. These marketplace sellers primarily consist of traditional offline distributors. They leverage its platform and customer base to grow their business, while at the same time complementing its product offerings under direct sales model. Its marketplace business model under wholesale business is similar in many respects to retail business, including the charging model.
1 Health Membership Pharmacy Enablement Program
The company launched the 1 Health Membership program in May 2021 to reward and nurture relationships with the pharmacies that purchase products. 1 Health Membership program is a membership model that effectively connects pharmaceutical companies with pharmacies and patients to empower small-to-mid size pharmacy chains.
Cloud Pharmacy Services
The company helps offline pharmacies to build their online presence effectively and to extend the reach of their products to cover a broader consumer base through the Internet, thus expanding their market coverage and improving their service capabilities.
Cloud Clinic Services
The company enables offline pharmacies to provide online consultation and e-prescription services through cloud clinic services to patients.
Cloud Prescription Services
Pharmacies, especially independent pharmacies and small-to-medium sized pharmacy chains, often lack onsite doctors to offer prescriptions to consumers with minor ailments or chronic diseases visiting their stores. In 2018, the company began to use its cloud prescription services to leverage existing online consultation and e-prescription service platform to offer convenient online consultation services to these consumers onsite. Once consumers obtain their prescriptions from the company, they will be able to purchase prescription drugs from pharmacy customers. In return for services, it charges pharmacy customers a fixed amount of annual service fees. The annual service fees vary, depending on the number of online consultations performed, the number of e-prescriptions issued, and the number of drugs purchased in connection with services.
Products and Services to Consumers
Online Retail Pharmacy
The company’s online retail pharmacy is an integral part of its holistic online and offline platform. In 2010, founders of the company launched online retail pharmacy, 1 Medicine Marketplace, to fulfill the healthcare needs of consumers. 1 Medicine Marketplace is available through its 1 Medicine Marketplace app or website. It provides consumers with a wide variety of pharmaceutical products and other merchandise, including drugs, nutritional supplements, contact lenses, medical supplies and devices, personal care products, as well as baby products. It operates online retail pharmacy under either direct sales model or the marketplace model.
Direct Sales Model
In its online direct sales model, the company acquires products from suppliers and sell them directly to consumers. For this model, it needs to manage inventories to ensure effective inventory management and may adjust inventory level based on fluctuation in supply and prices, seasonality, popularity of a particular product, and also take into consideration the shelf life. Under this model, it also operates independent branded storefronts in leading e-commerce platforms in China, such as Tmall.com, JD.com and PDD.com. The company pays these third-party e-commerce platforms commissions as a percentage of sales.
Marketplace Model
The company introduced an online marketplace in 2016 to leverage brand recognition, large and growing customer base, and proprietary technology platform. Under its marketplace model, third-party sellers offer products to consumers over its online marketplace.
The company facilitates transactions between marketplace sellers and consumers through marketplace. It provides transaction processing and billing services on all orders on its online marketplace, while the marketplace sellers are responsible for inventory management, fulfillment and delivery.
Offline Retail Pharmacy
The company also operates a network of offline retail pharmacies branded as ‘Yi Hao Pharmacy,’ mainly in Guangdong province, which enables it, as required by the relevant laws and regulations, to operate online pharmaceutical retail businesses. The company had 12 offline retail pharmacies in Guangzhou, Tianjin, and Kunshan.
Services to Medical Professionals
The company provides medical professionals with services to enable them to better serve patients and improve service quality. This includes E-medical Record and Patient Management, creating and maintaining, in secured electronic storage, a copy of electronic medical records for certain consumers. These e-medical records allow consumers to access past consultation history and communicate with doctors for follow-up or new consultations. Its cloud-based platform and e-medical record services also enables more efficient patient management by doctors. Doctors use its systems for reviewing e-medical records with the patient’s consent.
Products
The company carries diverse and comprehensive products in its online retail and offline retail pharmacies. Its unique integrated retail and wholesale supply chain and inventory management combines the management of retail and wholesale SKUs. The merchandise offered by and the marketplace sellers can be broadly classified into the following major categories:
Drugs: The company displays drugs, including prescription drugs and over-the counter, or OTC, drugs, such as western medicines and traditional Chinese medicines.
Nutritional Supplement: The company displays nutritional supplements, including a variety of vitamins, and dietary products.
Contact Lenses: The company offers a comprehensive selection of contact lenses that cover all major brands.
Medical Supplies and Devices: The company offers a variety of general-purpose medical supplies and devices such as bandages and thermometers.
Other products: The company’s other products include personal care products such as skin care, birth control, sexual wellness products, as well as baby products.
The company also sells seasonal and promotional items tailored to local consumer demand for convenience and quality. Since 2017, it has expanded its product offerings by introducing more health and wellness products. Consumers can browse products by category or scan barcodes of drugs they find in store and easily find them on online retail pharmacy.
Sales and Marketing
The company’s marketing and promotion strategy is to build brand recognition, increase customer traffic, attract new customers, build strong customer loyalty, and develop incremental revenue opportunities by employing a variety of methods to attract potential consumers. Generally, it expands its user base on marketplace through search engines, social media, and word-of-mouth referrals. It offers incentives to new consumers and pharmacy customers who make purchases for the first time on its platform. It also offers flash sales and brand promotion events on its website and mobile application to engage with existing consumers in an effort to increase retention and repurchases. The company’s principal marketing programs includes advertising its solutions through mobile platform and other media.
The company acquires pharmacy customers primarily through effective on-the-ground sales operation to allow rapid expansion of wholesale business. It has full-time employees who visits independent pharmacies, pharmacy chains, and in-house pharmacies within clinics and private hospitals to promote online wholesale pharmacy and inventory management services. It also hires independent contractors who work for the company on a commission-basis to promote its products and services to pharmacies through the ‘City Partners’ program. It also coordinates market development and promotion efforts for pharmacy customers, which may include flash sales, seasonal sales discounts, and rebates.
Intellectual Property
The company relies on a combination of copyright, trademark, and trade secret laws and restrictions on disclosure to protect intellectual property rights. It has registered 30 software copyrights with the PRC National Copyright Administration; 28 registered domain names, including 111.com.cn and yaoex.com. As of December 31, 2023, the company had 327 registered trademarks. As of the same date, it had 23 authorized patents in the areas of digital health, big data analytics, and SMART supply chain technology with the China National Intellectual Property Administration.
History
The company was founded in 2010. The company was incorporated in 2013. It was formerly known as New Peak Group and changed its name to 111, Inc. in 2018.
