Company: DDC
Filing Date: 2025-01-28
Form Type: 20-F
Source: 0001213900-25-007160
Chunk: 103

Company: DDC Enterprise Ltd
Filing Date: 2025-01-28
Form: 20-F
Item: Item 5
Chunk 103
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 life-choices; and  

  Broader shift in consumer preferences, trends, and purchasing behavior to convenience without compromising on quality and/or nutritional value.  

Unfavorable changes in any
of the above factors could adversely affect demand for our products and/or services and impact our results of operations.

There are specific internal
and external factors that could impact our results of operations. These include (but are not limited to):

Sales Strategy - We
rely on both growing our own “ DayDayCook” branded product sales and private label product sales. This combined strategy was
prompted by the need to (i) improve our competitiveness in the RTC, RTH, RTE and plant-based meat food sectors, (ii) expand DayDayCook
own-branded in the market by new acquisition with more scope of offline distributors and (iii) improve the overall margin profile
of the business. Sales from RTC, RTH and RTE has increased from 29.5% of our revenue in the year ended December 31, 2022 to 36.1%
of our revenue in the year ended December 31, 2023. This was a result of acquisitions of companies focusing on offline distribution of
both DayDayCook own-branded and private label products, which generated higher net margins. We expect growth for the DayDayCook own-branded
product to outpace private-label product sales. This shift will require us to plan, develop, and successfully execute on multi-channel
sales, marketing, and distribution strategy.

Long-Term Consumer Trends
and Demand - As the China RTC market is expected to benefit from a shift in customer taste and preferences to
convenient cooking and meal options, the RTC market is expected to grow to RMB564.5 billion (US$83.5 billion) by 2026, a CAGR
(2021-2026) of 17.2%. While plant-based products are a nascent Fast-Moving Consumer Goods (“ FMCG”) category in China, there
is significant demand from younger customer segments for plant-based substitutes/alternatives. Demand for food products that are more
environmentally friendly and viable alternatives to/substitutes for traditional protein sources is expected to increase. As a result,
the market for plant-based products is expected to experience a CAGR (2021-2026) of 11.0%. Total revenue is projected to increase from
RMB5.1 billion (US$703.3 million) in 2021 to RMB8