Company: DDC
Filing Date: 2025-01-28
Form Type: 20-F
Source: 0001213900-25-007160
Chunk: 23

Company: DDC Enterprise Ltd
Filing Date: 2025-01-28
Form: 20-F
Item: Item 3
Chunk 23
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 31, 2023, our gross margin increased to 25.0% versus 24.5% for the year ended December 31, 2022.

Our ability to further increase
our research and development capabilities, selling and marketing capacity is critical to supporting our stable and continuous business
growth, which involves additional costs and uncertainties. In addition, to manage and support our growth, we must improve our existing
operational and administrative systems as well as our financial and management controls. Our continued success also depends on our ability
to recruit, train and retain qualified management personnel as well as other administrative and sales and marketing personnel, particularly
when we expand into new markets. We also need to continue to manage our relationships with our suppliers and customers. All of these endeavors
will require substantial management resources. As a result, our revenue and results of operations in future may fluctuate significantly
and our results for a given fiscal period are not necessarily indicative of results to be expected for our operations in future. We cannot
assure you that we will be able to manage any future growth effectively and efficiently, and any failure to do so may materially and adversely
affect our ability to capitalize on new business opportunities, which in turn may have a material and adverse effect on our business and
financial performance.

Furthermore, we may not be
able to achieve our expansion goals or effectively ramp up the sales of our new products. If we encounter any difficulty in expanding
our distributors and sales network, our growth prospects may be adversely affected, which could in turn have a material and adverse effect
on our business, financial condition and results of operations.

Our future growth may result
from improving our research and development capabilities, introducing new products, expanding our sales and distribution network and entering
new markets or new sales channels. Our ability to achieve growth will be subject to a range of factors, including:

  expanding our sales network;  

  enhancing our research and development capabilities;  

  hiring and training qualified personnel;  

  controlling our costs and maintaining sufficient liquidity;  

  prioritizing our financial and management controls in an efficient and effective manner;  

  exercising effective quality control;  

  managing our various suppliers and leveraging our purchasing power;  

  maintaining our high food-safety standards; and  

  strengthening our existing relationships with distributors.  

We face increased risks when
we enter new markets, or enter new sales channels, including social media and e-commerce channels. New markets and sales channels may
have different regulatory requirements, competitive conditions, consumer