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111 runs an online pharmacy and a digital network that helps drugmakers sell and deliver medicines to patients and pharmacies across China.
111 is a Chinese digital health company that does two related jobs: it sells medicines online to consumers and small pharmacies, and it provides the software and logistics that let drugmakers and hospitals reach patients directly. Most people meet it through its consumer pharmacy app, where you can order prescription and over-the-counter drugs and have them delivered, often within hours.
The core of the business is a licensed online pharmacy. China tightly controls how medicines are sold, so holding the right licenses is a real barrier to entry. 111 connects drugmakers and distributors on one side with patients and neighborhood pharmacies on the other, taking a cut on the products that move through its platform. It also earns fees from pharmaceutical companies for helping them sell directly to patients and manage prescriptions digitally, which is the higher-margin, more interesting part of the story. Its main problem is that selling medicines online is a thin-margin, price-competitive business, and 111 has struggled to turn a profit. It competes with far larger players like Alibaba's health arm and JD.com, which have deeper pockets and bigger customer bases. To stand out, 111 has leaned into partnerships with hospitals and drugmakers and into its direct-to-patient services, betting that the valuable data and relationships sit closer to the prescription than to the delivery box.
In 2010, a company called 1ε·θ―η½ set out to sell medicine on the internet. The idea was simple: people needed drugs, and the web could deliver them. It would later become known as 1 Pharmacy.
A few years later, the company renamed itself 1 Pharmacy and crossed a million buying customers. It also launched the first mobile app in China's online drug business, putting a pharmacy in people's pockets.
Gang Yu and Junling Liu had built an online shopping company, 1ε·εΊ, then lost control of it to Walmart and walked away. They started over, and in 2015 Yu took the CEO job at 1 Pharmacy. This time they kept a tight grip, using special shares that gave them almost all the voting power.
The company had been selling to ordinary shoppers. In 2017 it added 1 Medicine, a wholesale platform that helped pharmacies buy drugs and move them around. Now it served both the customer and the corner drugstore.
In 2018 the company listed on Nasdaq, but the market was not impressed. The stock fell below its offering price on day one and kept sliding. The problem was plain: nobody could yet show how the business would actually make money.
Years later, the company shrank on purpose. It sold off weak parts, revenue fell sharply, and it pushed toward a lighter model built on services and an AI-powered health platform. Some service and promotion revenue grew, but the aim was clear: fatter margins and real profit.
With the business smaller and margins thin, the two founders and a sponsor proposed to take the company private, offering a premium to the market price. They already controlled most of the votes. But investors doubted the deal would close, and the stock traded far below the offer, as if the market had already said no.
The company is based in Shanghai and listed on NASDAQ. It is a small, speculative outfit that has burned cash for years, so the key question for investors is whether its higher-margin services can grow fast enough to outweigh the brutal economics of selling pills online.
Saved answer Β· last researched 3 Nov 2026