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111 , Inc. InvestorRoom 111 , Inc. Announces Second Quarter 2021 Unaudited Financial Results SHANGHAI , Aug. 27 , 2021 / PRNewswire / -- 111 , Inc. ( " 111 " or the " Company " ) ( NASDAQ : YI ) , a leading tech - enabled healthcare platform company committed to digitally connecting patients with medicine and healthcare services in China , today announced its unaudited financial results for the second quarter ended June 30 , 2021 . Second Quarter 2021 Highlights • Net revenues were RMB3.0 billion ( US $ 468.4 million ) , representing an increase of 86.5 % year - over - year . • Operating expenses ( 1 ) were RMB323.4 million ( US $ 50.1 million ) , representing an increase of 82.2 % year - over - year . Operating expenses accounted for 10.7 % of net revenue this quarter as compared to 10.9 % in the same quarter of last year . • Technology expenses were RMB52.6 million ( US $ 8.2 million ) , representing an increase of 186.0 % year - over - year . 111's increased investments in technology are yielding results , as the company has been awarded 18 patents by relevant government authorities . • Non - GAAP net loss attributable to ordinary shareholders ( 2 ) was RMB118.0 million ( US $ 18.3 million ) . As a percentage of net revenues , non - GAAP net loss attributable to ordinary shareholders decreased to 3.9 % this quarter from 4.9 % in the same quarter of last year . • Cash and cash equivalents , restricted cash and short - term investments amounted to RMB 1.2 billion ( US $ 186.7 million ) as of June 30 , 2021 . ( 1 ) Operating expenses consist of fulfillment expenses , selling and marketing expenses , general and administrative expenses , technology expenses and other operating expenses . ( 2 ) Non - GAAP net loss attributable to ordinary shareholders represents net loss attributable to ordinary shareholders excluding share - based compensation expenses . Mr. Junling Liu , Co - Founder , Chairman , and Chief Executive Officer of 111 , commented , " The second quarter represents another period of strong growth , as net revenue increased 86.5 % year - over - year to RMB 3.0 billion , marking the 12th consecutive quarter of year - over - year growth for 111 since the company's IPO . Our top- and bottom - line growth this quarter was driven by our B2B business , which saw year - over - year revenue and gross profit increases of 99 % and 120 % , respectively . " Mr. Liu added , " Also during the second quarter and as a growing trend in 2021 , we have seen significant increased demand for 111's service offerings , such as marketplace vendor services , online medical consultations , cloud and e - prescription services , digital marketing , supply chain management , and others . We are pleased to report that service revenue grew 125 % year - over - year during the second quarter , contributing to a diversified revenue stream for 111 , and demonstrating successful execution of our strategy . " " Additionally , our supply chain continued to grow substantially during Q2 2021. We greatly expanded our partnerships with both domestic and global pharmaceutical companies , now totaling 381 partners , up from 259 partners in the prior year . We are happy to report similar growth across other performance indicators for 111 , including the coverage of number of pharmacies in our network , which has grown to 355,000 , a significant increase from 260,000 in the second quarter of 2020. As our market coverage continues to increase , now encompassing approximately 65 % of China's total retail pharmacies , our customers are able to benefit from this scale . Purchases from existing customers made up 95 % of our revenue this quarter , demonstrating growing customer loyalty and satisfaction . " " In the second quarter we continued to invest in our industry - leading technology . Technology expenses increased 186.0 % year - over - year , accounting for 1.7 % of net revenues this quarter as compared to 1.1 % in the same quarter of last year . We are proud to announce that these increased investments in technology are yielding results , as we have obtained a total of 18 patents for our internally - developed proprietary technology in areas of digital health , big data analytics , and SMART supply chain technology . Our cutting - edge technology solutions not only support our internal efficient supply chain infrastructure , but also enable our customers , including the pharmacies in our network , to better serve their consumers using our suite of SaaS enterprise solutions . In addition , we continue to offer more innovative solutions to healthcare providers . For example , our 1 Clinic , which offers e - hospital service , is seamlessly connecting doctors and patients through our digital solutions , making 1 Clinic an attractive platform for pharmaceutical companies looking to launch and commercialize new drugs in China . Notably , we have already begun to partner with numerous pharmaceutical companies looking to leverage our technology and network to commercialize their products . These partnerships include Eli Lily's Trulicity , Taltz , and Verzenio , which treat diabetes , severe plaque psoriasis , and metastatic breast cancer , respectively , as well as Novartis ' Consentyx , which treats plaque psoriasis , and Sanofi's Dupixent , for the treatment of eczema . " " Other notable highlights from the second quarter , " continued Mr. Liu , " include the growth of our digital franchise initiative , which we branded as 1 Health Membership rewards program , which reached a key milestone of eclipsing 10,000 participating stores in Q2 2021. This exclusive loyalty - driven program features an annual fee and allows our members access to numerous privileged benefits and has shown to be popular with the retail pharmacies within our network . Member stores are able to enjoy centralized and streamlined procurement , as well as access to tools such as our SMART CRM system , that helps manage their businesses and customers , and assists in expanding their businesses . " " To conclude , " stated Mr. Liu , " we will continue to focus on growth , not only top - line growth , but also growing our margins . We will continue to strengthen our team , provide innovative services , and capitalize on our technology - enabled infrastructure . We are committed to advancing China's healthcare system , improving access to medicine and medical services , and ultimately delivering excellent value to our shareholders . We are well - positioned to continue to transform the healthcare landscape in China , operating in an environment where regulatory and industry tailwinds fly in our favor . " Second Quarter 2021 Financial Results Net revenues were RMB3.0 billion ( US $ 468.4 million ) , representing an increase of 86.5 % from RMB1.6 billion in the same quarter of last year . As of June 30 , 2021 , the Group had two reporting segments , Business to Business ( " B2B " ) and Business to Consumer ( " B2C " ) . Revenue contribution from the Company's E - Channel was previously disclosed as a separate segment , but has been incorporated in the B2B segment since the third quarter of 2020. The Company revised prior comparative periods to conform to the current period segment presentation as follows : ( In thousands RMB ) For the three months ended June 2020 30 , 2021 YoY B2B Net Revenue Product Service 1,451,209 3,249 2,880,613 16.150 98.5 % 397.1 % Sub - Total 1,454,458 2,896,763 99.2 % Cost of Products Sold ( 3 ) 1,404,942 2,787,871 98.4 % Segment Profit Segment Profit % 49,516 3.4 % 108,892 3.8 % 119.9 % For the three months ended June ( In thousands RMB ) B2C Net Revenue 2020 30 , 2021 YoY Product Service 161,206 6,152 122,351 4,968 ( 24.1 % ) ( 19.2 % ) Sub - Total 167,358 127,319 ( 23.9 % ) Cost of Products Sold ( 3 ) 132,129 101,635 ( 23.1 % ) Segment Profit 35,229 Segment Profit % 21.1 % 25,684 20.2 % ( 27.1 % ) ( 3 ) For segment reporting purposes , purchase rebates are allocated to the B2B segment and B2C segments primarily based on the amount of cost of products sold for each segment . Cost of products sold does not include other direct costs related to cost of product sales such as shipping and handling expense , payroll and benefits of logistic staff , logistic centers rental expenses and depreciation expenses , which are recorded in the fulfillment expenses . Operating costs and expenses were RMB3.2 billion ( US $ 497.6 million ) , representing an increase of 87.4 % from RMB1.7 billion in the same quarter of last year .