Company: DDC
Filing Date: 2025-05-15
Form Type: 20-F
Source: 0001213900-25-043916
Chunk: 24

Company: DDC Enterprise Ltd
Filing Date: 2025-05-15
Form: 20-F
Item: Item 3
Chunk 24
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 brands and products and we
may need to build or increase brand awareness in the relevant markets and sales channels by increasing investments in advertising and
promotional activities than we originally planned. We may find it more difficult in new markets to hire, train and retain qualified employees
who share our business philosophy and culture. In addition, we may have difficulty in finding reliable suppliers with adequate supplies
of raw materials meeting our quality standards or distributors with efficient distribution networks. As a result, any products we introduce
in new markets may be more expensive to produce and/or distribute and may take longer to reach expected sales and profit levels than in
our existing markets, which could affect the viabilities of these new operations or our overall profitability.

We also sell our products
to major e-commerce platforms and online distributors. Our development of the e-commerce channel depends on many factors, most of which
are beyond our control, including: the trust and confidence level of China’s online consumers, as well as changes in consumer consumption
patterns, tastes and preferences; the growth of internet usage in China; and the development of fulfillment, payment and other ancillary
services associated with e-commerce sales. Any failure to respond to trends and consumer requirements in the e-commerce channel may adversely
affect our sales and our business and growth prospects in this sales channel.

Additionally, our expansion
plans and business growth could strain our managerial, operational and financial resources. Our ability to manage future growth will depend
on our ability to continue to implement and improve operational, financial and management information systems on a timely basis and to
expand, train, motivate and manage our workforce. We cannot assure you that our personnel, systems, procedures and controls will be adequate
to support our future growth. Failure to effectively manage our expansion may lead to increased costs and reduced profitability and may
adversely affect our growth prospects. In addition, as we expand our operations, we may encounter regulatory, personnel and other difficulties
that may also increase our costs of operations.

We depend on a stable and adequate supply
of raw materials which are subject to price volatility and other risks. Inadequate or interrupted supply and price fluctuation for raw
materials and packaging materials could adversely affect our profitability.

We source a majority of our
products from suppliers located in China and the United States, and our suppliers source raw materials and packaging materials within
China and the United States. Raw materials used within the production process include, for example, meat, rice, oil, soy beans, starch
and sugar. To date