Zalando Goes from Strength to Strength in 2020

2020 has been an excellent year so far for Zalando as more brands than ever before are using the services of the European e-commerce company. The online retailer, based in Germany, sells fashion and lifestyle products to customers across seventeen European markets.

Within the first of of 2020, the company has reported particularly strong profit growth. Not only has revenue grown by 19.6 percent to 3.56 billion euros, but the customer base has also expanded by 20.4 percent. It is clear that the online fashion platform has benefitted from the necessary movement towards online shopping during the global pandemic; there was even an increase in average basket size to £56.90.

The Chief Financial Officer of Zalando, David Schroder stated that “in the past months we have proven the strength and agility of Zalando in many ways, no matter how challenging the environment…Many of our partners have intensified their business on our platform in the last months, and we have managed to successfully grow together”.

Interestingly, Zalando has also appeared to have fared better than their top rivals; British online retailer ASOS. In spite of ASOS reporting a 10% increase of sales in the first four months, the company has remained cautious as the lack of social events and further government may still have an effect on sales.
Zalando has also begun to offer brands logistics and marketing services through a partner programme. In an attempt to become the ‘starting point for fashion’, the company increased their partner and connected retail programmes during this period which has allowed retailers to sell on its site much more easily.

The partner programme includes several initiatives in order to support brands struggling due to the impacts of corona virus. This has included waiving the commission fee for all new and existing physical stores as part of the connected retail programme. Furthermore, they will also provide support for those brands in need of immediate cash relief. As well as these programmes clearly attracting more brands to utilise the companies services at a time of need, they have also provided a higher margin of business than if the company has remained solely as an online retailer.

By Sophie Easton