Company: DDC
Filing Date: 2025-08-05
Form Type: F-3/A
Source: 0001213900-25-072059
Chunk: 69

Company: DDC Enterprise Ltd
Filing Date: 2025-08-05
Form: F-3/A
Chunk 69
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The majority of our product
transportation was provided by independent third-party logistics service providers. Disputes with or a termination of our contractual
relationships with one or more of our logistics companies could result in delayed delivery of products or increased costs. There can be
no assurance that we can continue or extend relationships with our current logistics companies on terms acceptable to us, or that we will
be able to establish relationships with new logistics companies or expand our logistics team to ensure accurate, timely and cost-efficient
delivery services. If we are unable to maintain or develop good relationships with logistics companies or expand our logistics team to
cover new territories, it may inhibit our ability to offer products in sufficient quantities, on a timely basis, or at prices acceptable
to our customers. In addition, as we do not have any direct control over these logistics companies, we cannot guarantee their quality
of services. If there is any delay in delivery, damage to products or any other issue, our sales and brand image may be affected.

Any improper handling of our
products by the logistics service providers could also result in product contamination or damage, which may in turn lead to product recalls,
product liabilities, increased costs and damage to our reputation, which may in turn adversely affect our business, financial condition
and results of operations.

The transportation costs of
our logistics service providers are subject to factors beyond our control, such as the fluctuation in the gasoline price, increases in
road tolls and bridge tolls, and changes in transportation regulations. Any increase in the service costs of our logistics service providers
may lead to an increase to our fulfilment expenses, which may in turn negatively affect our results of operations.

We may face the risk of inventory obsolescence.

As of December 31, 2024 and
as of December 31, 2023, we had inventories of RMB 4.7 million (US$0.6 million) and RMB10.1 million respectively. Our inventory
turnover days were 13.7 days and 21.2 days respectively. See “Management’s Discussion and Analysis of Financial
Condition and Results of Operations.” Our business relies on consumer demand for our products, which depends substantially on factors
such as (i) consumer spending patterns, (ii) consumer preferences and tastes, (iii) consumer income, (iv) consumer
perceptions of and confidence in our product quality and food safety, and (v) consumer lifestyle. Any change in consumer demand for
our products or the