Company: DDC
Filing Date: 2025-05-15
Form Type: 20-F
Source: 0001213900-25-043916
Chunk: 106

Company: DDC Enterprise Ltd
Filing Date: 2025-05-15
Form: 20-F
Item: Item 5
Chunk 106
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 stores                                                         428,051                —                          —                —           
  Total Revenues                                                        179,586,066                205,481,904                273,333,957      37,446,599  

Cost of Revenues

Our cost of revenues primarily
consists of (i) product costs, (ii) personnel costs, (iii) lease expenses, and (iv) other costs. The table below shows
the cost of revenues in absolute amounts for the periods indicated.

                              For the Year Ended                                                                                         
                              December 31,                                                                                               
                              2022                                     2023                       2024                                   
                              RMB                                      RMB                        RMB                                    
 ─────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────
  Product costs                                       131,376,909                152,732,863                194,463,997      26,641,459  
  Personnel costs                                       2,424,475                    943,640                    856,669         117,364  
  Lease expenses                                          643,311                          —                          —               —  
  Others                                                1,214,502                    350,088                    370,599          50,772  
  Total cost of revenues                              135,659,197                154,026,591                195,691,265      26,809,595  

Product Costs:

“ Product Costs” represents costs of consumer products sold
online and offline. Product costs were 73.2%, 74.3% and 71.1% of total revenues for the year ended December 31, 2022, 2023 and 2024.
Due to an increase in competitors during COVID-19, the fierce competition affected our online sales during the period of early 2022. The
Group offered discounts to customers to maintain and grow its market share, but at the same time was able to transfer part of that cost
to suppliers who offered more competitive product costs.

Personnel Costs:

“ Personnel Costs”
represents the costs directly related to the revenue such as operation employee of experience store and retail shops. Due to COVID-19,
we had to close all our experience stores in 2022. The closure of all retail locations also corresponded to a decrease in the revenue
from experience stores.

Lease expenses:

“ Lease expenses”
represents (i) the lease expenses associated with the farm land located near Shanghai, and (ii