Company: DDC
Filing Date: 2025-05-15
Form Type: 20-F
Source: 0001213900-25-043916
Chunk: 10

Company: DDC Enterprise Ltd
Filing Date: 2025-05-15
Form: 20-F
Item: Item 3
Chunk 10
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 by us.

The PRC government, media
outlets and public advocacy groups have been increasingly focused on consumer protection in recent years. The products sold by us
or may be defectively designed, manufactured or of quality issue, or cause harm and adverse effect to the health of our customers. The
offerings of such products by us may expose us to liabilities associated with consumer protection laws. Pursuant to the Law of PRC on
the Protection of Rights and Interests of Consumers (the “ Consumer Protection Law”), business operators must guarantee that
the commodities they sell satisfy the requirements for personal or property safety, provide consumers with authentic information about
the commodities, and guarantee the quality, function, usage and term of validity, etc. of the commodities. Failure to comply with the
Consumer Protection Law may subject business operators to civil liabilities such as refunding purchase prices, replacement of commodities,
repairing, ceasing damages, compensation, and restoring reputation, and even subject the business operators to criminal penalties when
personal damages are involved or if the circumstances are severe. Although we would have legal recourse against the manufacturer of such
products under PRC law if the liabilities are attributable to the manufacturer, attempting to enforce our rights against the manufacturer
may be expensive, time-consuming and ultimately futile.

We do not maintain product
liability insurance for products we sold. Even unsuccessful claims could result in significant expenditure of funds and diversion of management
time and resources, which could materially and adversely affect our business, financial condition and prospects.

We face risks related to instances of food-borne
illnesses, health epidemics, natural disasters and other catastrophic events. The outbreak of any severe contagious diseases, if uncontrolled,
could adversely affect our business and results of operation.

Our business is susceptible
to food-borne illnesses, health epidemics and other outbreaks. We cannot guarantee that our internal controls and trainings will be fully
effective in preventing all food-borne illnesses. Furthermore, we rely on third-party suppliers in our operations, which may increase
such risk. New illnesses resistant to any precautions or diseases with long incubation periods could arise on a retroactive basis. Reports
in the media of instances of food-borne illnesses could, if highly publicized, negatively affect our industry and us. This risk exists
even if it were later determined that the illness in fact were not spread by our products. We also face risks related to health epidemics.
Past occurrences of epidemics or pandemics, depending on their scale of occurrence, have caused