Zalando revamps strategy to build pan-European e-commerce ecosystem

In the B2C domain, Zalando seeks to distinguish itself by focusing on quality to enhance the shopping experience, elevating categories like sports and kids and family into distinct offerings, and providing personalised inspiration and entertainment. On the B2B front, Zalando plans to leverage its logistics, software, and service capabilities to become a pivotal facilitator for e-commerce transactions for brands and retailers, aiming to develop this into a multi-billion-euro business in the mid-term, the company said in a press release.

Zalando has set ambitious financial targets through 2028, aiming for a compound annual growth rate of 5-10 per cent for both gross merchandise volume (GMV) and revenue. The company targets an adjusted EBIT margin of 6-8 per cent by 2028 and aspires to capture the equivalent of 15 per cent of the European fashion market.

Significant growth in the retail channel has been noted, representing about 75 per cent of the group's turnover, along with increasing revenues from e-commerce due to digital investments. As of December 31, 2023, Zalando's distribution network includes 345 directly operated stores and 99 franchised stores.

The B2B strategy, known as ZEOS, positions Zalando as an essential enabler for fashion and lifestyle e-commerce across Europe, offering logistics and software solutions to brands and retailers. ZEOS is already a profitable venture, generating 0.9 billion euros in revenue.

Zalando's refreshed strategy charts a path for growth. The company is committed to achieving net-zero CO2 emissions for its operations and private label business by 2040, and across its entire business by 2050.

“Our ambition is to return to strong growth and continue our margin expansion, as reflected in our new mid-term guidance,” said Robert Gentz, co-CEO of Zalando. “In B2C we will move beyond transactions by giving our 50 million customers across Europe even better-quality experiences and products that fit their lifestyle and personalised content, inspiration and entertainment. In B2B, we will power the businesses of partners and merchants on and off Zalando, leveraging our unique logistics infrastructure.”

Fibre2Fashion News Desk (DP)