Company: DDC
Filing Date: 2025-05-15
Form Type: 20-F
Source: 0001213900-25-043916
Chunk: 7

Company: DDC Enterprise Ltd
Filing Date: 2025-05-15
Form: 20-F
Item: Item 3
Chunk 7
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 efforts to expand internationally are not successful. These factors include changes in
market needs and product trends, economic fluctuations, political and social turbulence, relevant countries or regions’ relationships
with China, changes in legal regulations or other conditions and difficulties in employing and training appropriate local management and
employees. There is no assurance that our international market expansion strategy will succeed in the future.

Changes to the pricing of our products could
adversely affect our results of operations.

We aim to bring to consumers
affordable, healthy, and convenient food products. The pricing of our products is based on multiple factors, including, without limitation,
the pricing of the components, ingredients and raw materials, costs of product development, anticipated sales volume, manufacturing costs
and logistics service expenditures. Benefiting from our deep engagement with our customers, we are in a good position to analyze consumers’
preferences and demands, evaluate the market acceptance and potential sales volume of our new products to be launched, which enables us
to price our products at a competitive rate. Nevertheless, we cannot ascertain that we will adopt a competitive pricing strategy for our
products at all times. If we price our products too low, our profit margin will suffer. If we price our products higher than consumers’
expected price, we may not achieve the sales volume we expect, in which case revenues from the corresponding products may be negatively
affected.

Even if we properly price
our products at their launch time, we may need to offer substantial discounts, especially during the major shopping festivals such as
“618,” “ Singles’ Day” and “ Double Twelve,” to promote our brand awareness and to drive sales
volume, or cut down the price as our products advance in their life cycles to maintain such products’ attractiveness to consumers.
We may also need to reduce the prices to sell excess inventory in the event that we fail to accurately forecast demands. Any such price
cuts may not lead to the sales volume we expect and may negatively impact the demand for our other newly launched or higher-end products,
in which case our revenues could be negatively impacted. Furthermore, some customers may purchase our products in bulk when we offer substantially
discounted or promotional prices and then re-sell them through their proprietary or third-party channels. The market and pricing for our
products may be interrupted by the secondary sale pricing strategies adopted by such resellers and the possible negative shopping experience
they provide to consumers, which may negatively impact our brand image and our business.

Our business and prospects depend on our
ability to build our brands and