Fashion
Zalando Q3 sales up on premium, lifestyle fashion
Zalando‘s Q3 group revenue climbed to €2.4bn from €2.27bn in the same period last year and its adjusted group EBIT was €92.7m compared to €23.2m in Q3 last year. Its net income was €44.3m compared to -€8.2m in the prior year period.
Zalando said it “recorded strong growth” in both its growth vectors Business-to-Consumer (B2C) and Business-to-Business (B2B) in the third quarter, which it believes was driven by “increasing consumer demand amid an industry-wide strong start to the autumn/winter season”.
It also shared that its number of active customers increased by about half a million quarter on quarter, bringing the total number of active customers to 50.3m in Q3.
To capture further growth opportunities Zalando is investing in key areas of its ecosystem strategy, such as driving customer loyalty, expanding lifestyle propositions, making fashion discovery more entertaining, and further strengthening its European logistics network.
Zalando chief financial officer Dr. Sandra Dembeck explained: it is investing in initiatives such as evolving its Plus loyalty programme, offering more inspiring content, ramping up its tech hub in China and driving localised convenience for customers via its European logistics network.
Zalando uses premium fashion to differentiate from Shein, Asos
GlobalData senior apparel analyst Louise Deglise-Favre says the 4.3% rise in Business-to-consumer (B2C) sales in Q3 is on the back of Zalando continuing to add in-demand premium brands such as A-Cold-Wall*, Marine Serre and Remain to its product offering.
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She explains: “This allows it to differentiate from other online fashion players such as Shein and ASOS, by targeting a different consumer base which is slightly older and more financially stable.
“Zalando also capitalised on the streetwear trend in October, launching a campaign called “Cultural Ties”, featuring interviews with trendsetters and product style guides, as well as exclusive items in collaboration with Adidas Originals. Plus, the retailer continued to grow its lifestyle proposition, seeing strong growth within its sportswear, beauty and childrenswear offering.”
Deglise-Favre is also keen to point out the retailer’s use of technology also sets it apart from its competitors.
“In October it expanded its AI-powered shopping assistant to all of its markets following positive consumer feedback from its initial launch in countries such as Germany and the UK.
“The retailer also added four more cities to its Trend Spotter tool, now allowing shoppers to discover emerging trends and popular products in 10 fashionable cities across Europe, such as London, Milan and Amsterdam.
“Zalando also evolved its Plus loyalty programme in Spain, France and Austria, removing its annual membership fee and pivoting to a points-based system, with plans to expand this change to more markets in 2025,” she shares.
Zalando’s comprehensive logistics and fulfilment offering through the ZEOS platform is continuing to attract new clients.
Through ZEOS, Zalando offers solutions to retailers and brands looking to strengthen or develop their online capabilities but lacking the expertise or resources to do so efficiently alone.
While the B2B division still represents a minor share of Zalando’s revenue, Deglise-Favre asserts “it presents a highly lucrative opportunity and will likely remain a key development area for the retailer”.
Zalando Q3 key results
- Zalando’s Q3 group revenue was up 5% to €2.4bn from the same period last year.
- Its adjusted group EBIT was €92.7m compared to €23.2m in Q3 2023.
- Zalando’s net income was up €44.3m from -€8.2m in Q3 2023.
Zalando’s outlook
In FY24 the company expects gross merchandise volume (GMV) to grow between 3% and 5%, revenue to increase between 2% and 5% and adjusted EBIT to grow to between €440m and €480m.
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