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    Xipeng Feng • China International Capital Corporation

    Xipeng Feng's questions to 111 Inc (YI) leadership

    Xipeng Feng's questions to 111 Inc (YI) leadership • Q4 2024

    Question

    Xipeng Feng from China International Capital Corporation asked about potential further expense control actions in 2025 and the primary drivers for revenue growth, especially while needing to maintain healthy profit margins in the current market environment.

    Answer

    Executive Haihui Wang responded that cost optimization is integrated into the company's DNA and will continue in 2025 through the use of AI and internet technologies to achieve structural improvements. For revenue growth, Wang outlined a two-sided strategy: on the supply side, expanding the decentralized fulfillment center model and using a digital competition mechanism to secure competitive pricing from suppliers; on the demand side, focusing on high-value chain store customers through programs like 'Growing Together' and 'Flash Sales' to increase share-of-wallet and enhance profitability.

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    Xipeng Feng's questions to 111 Inc (YI) leadership • Q2 2024

    Question

    Asked for long-term guidance on the operating expense ratio and inquired about the drivers for achieving operating profit in Q2, as well as the net profit outlook for the year.

    Answer

    The company's profitability is driven by its 100% digital, in-house operating system which enhances operational efficiency. They are confident they can reduce the OpEx ratio to under 5% once revenues reach RMB 20 billion. The strategy for sustained profitability in 2024 involves leveraging this efficiency, providing a rich product selection with competitive prices to drive customer loyalty and ARPU, assuming stable market conditions.

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