Company: DDC
Filing Date: 2025-05-15
Form Type: 20-F
Source: 0001213900-25-043916
Chunk: 30

Company: DDC Enterprise Ltd
Filing Date: 2025-05-15
Form: 20-F
Item: Item 3
Chunk 30
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, integration, operational and financial risks, which may prevent us from realizing the full intended
benefit of the acquisitions we undertake.

We have in the past and may
continue to seek acquisitions that we believe strengthen our competitive position in our key segments and geographies or accelerate our
ability to grow into adjacent product categories and channels and emerging markets or which otherwise fit our strategies.

In addition, investments and
acquisitions could result in distraction of management from current operations, greater than expected liabilities and expenses, unidentified
issues not discovered in our due diligence, the use of substantial amounts of cash, potentially dilutive issuances of equity securities,
significant amortization expenses related to goodwill or intangible assets and exposure to potential unknown liabilities of the acquired
business. If the goodwill or intangible assets become impaired, we may be required to record a significant charge to our results of operations.

Further, the assumptions we
use to evaluate acquisition opportunities may not prove to be accurate and our investments or acquisitions may not yield the results we
expect. Even if our assumption is accurate, the integration of acquired businesses into ours may be costly and disruptive to our existing
business operations. The integration process involves certain risks and uncertainties, some of which are outside our control, and there
can be no assurance that we will be able to realize the anticipated benefits, synergies, cost savings or efficiencies. In the event that
our investments and acquisitions are not successful, our results of operations and financial condition may be materially and adversely
affected.

We rely on third-party logistics companies
to deliver our products. Any delivery delay, improper handling of goods or increase in transportation costs of our logistic service providers
could adversely affect our business and results of operations. If the third-party logistics business is interrupted, we may not have sufficient
resources to support our product transportation and face the risk of rising transportation prices.

We engage logistics service providers to store and transport products
to our customers. For the year ended December 31, 2022, 2023 and 2024, our fulfilment expenses were RMB10.6 million, RMB7.3 million and
RMB8.0 million (US$1.1 million), respectively, which represented 5.9%, 3.6% and 2.9% of our total revenue, respectively. The vast majority
of our products are delivered by trucks or trains. The services provided by our logistics service providers may be suspended or cancelled
due to unforeseen events, which could cause interruption to the sales