111 (YI) Status Update summary

Key challenges in China's pharmaceutical supply chain

• Market fragmentation with thousands of companies and distributors limits scale and efficiency.

• Lack of digitization and transparency creates friction and inefficiencies.

• Limited supply chain optimization leads to excess stock and high stock-out rates.

Technology and operational solutions

• Over 30 proprietary systems developed for supply chain management, including demand forecasting and price intelligence.

• Innovations have reduced procurement costs from over 5% to 2.6% of revenue in five years.

• Digital tools extend to partners, providing visibility and optimization for both upstream and downstream stakeholders.

Fulfillment network scale and models

• Operates 13 fulfillment centers, including five super hubs in major cities, covering all of China.

• Uses a mix of self-built, partner-transformed, and franchise models, all with standardized systems and quality control.

• New fulfillment centers reduce setup time by 70% through partnerships.