Company: DDC
Filing Date: 2025-07-22
Form Type: F-3
Source: 0001213900-25-066338
Chunk: 71

Company: DDC Enterprise Ltd
Filing Date: 2025-07-22
Form: F-3
Chunk 71
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 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.

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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 or delivery of our products.
In addition, delivery delays may occur for various reasons beyond our control, including improper handling by our logistics service providers,
labor disputes or strikes, acts of war or terrorism, outbreaks of epidemics, earthquakes and other natural disasters.

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