Shanghai – September 19, 2026 -- 111, Inc. (NASDAQ: YI) reported a net loss of RMB31.7 million (US$4.7 million) for the second quarter of 2026, more than four times the RMB7.3 million loss posted a year earlier, as the Shanghai-based healthcare platform accelerated its shift away from an asset-heavy distribution model.
Net revenue falls 28.3% as company sheds underperforming subsidiaries
Net revenue totaled RMB2.3 billion (US$339.0 million), down from RMB3.2 billion in the prior-year quarter. The company attributed the decline to last year's divestiture of several underperforming subsidiaries, part of a strategy to generate more service-based commission income and reduce operational and capital risk.
Promotional product sales surge 121% on pharmaceutical distribution deals
Net revenue from promotional products reached RMB60.7 million (US$8.9 million), up 121% year-over-year, with gross profit rising 120%. Levofloxacin Tablets (Cravit) from JNOVA Pharmaceutical (Beijing) Co., Ltd. drove much of the gain, with quarterly sales volume climbing from 364,000 boxes to 1,041,000 boxes and revenue increasing 157% to RMB28.1 million. Rivaroxaban Tablets (Pusitong) from Qilu Pharmaceutical Co., Ltd. and Xinkeshu Tablets from Shandong Wohua Pharmaceutical Co., Ltd. each sold 60,000 boxes during the quarter.
Marketplace service revenue climbs 18.2% for the first half of 2026
Total marketplace service revenue rose 18.2% year-over-year for the six months ended June 30, 2026, a figure the company cited as evidence of improved revenue quality under its platform-oriented model. Co-Founder, Chairman and CEO Junling Liu said the increase demonstrated "steady progress" toward high-quality, scalable and cost-efficient growth.
Total operating expenses drop 16.1% amid AI-driven workforce streamlining
Total operating expenses fell to RMB155.5 million (US$22.9 million) from RMB185.3 million, a 16.1% decrease. The company said ongoing investment in and adoption of AI agents enabled workforce streamlining, though it incurred substantial severance costs during the quarter tied to reductions in back-end support functions. Excluding share-based compensation and severance costs, operating expenses accounted for 4.2% of total GMV, down from 4.5% a year earlier.
Fulfillment expenses decline 29.5%, outpacing the revenue drop
Fulfillment expenses fell to RMB63.6 million (US$9.4 million) from RMB90.2 million, a 29.5% decrease attributed to network optimization and exits from underperforming fulfillment centers. As a percentage of net revenue, fulfillment expenses improved to 2.76% from 2.81%, a five-basis-point gain.
Loss from operations swings to RMB23.2 million from prior-year profit
Loss from operations was RMB23.2 million (US$3.4 million), compared with income from operations of RMB0.1 million in the same quarter last year. Non-GAAP loss from operations was RMB20.5 million (US$3.0 million), versus non-GAAP income of RMB3.0 million a year earlier. Net loss attributable to ordinary shareholders reached RMB39.1 million (US$5.8 million), up from RMB19.5 million, representing 1.7% of net revenues compared with 0.6% in the prior-year quarter.
Gross segment profit contracts 28.6% alongside broader revenue decline
Gross segment profit was RMB132.3 million (US$19.5 million), down 28.6% from RMB185.4 million a year earlier. Cost of products sold fell 28.2% to RMB2.2 billion (US$319.5 million), while selling and marketing expenses declined 12.2% to RMB58.1 million (US$8.6 million). General and administrative expenses rose slightly to RMB17.6 million (US$2.6 million), and technology expenses increased 28.0% to RMB19.0 million (US$2.8 million).