Zalando Unveils Strategic Shift to Dominate European Fashion and Lifestyle E-commerce

Zalando SE announced a strategic evolution aimed at increasing its share in the European fashion and lifestyle e-commerce market by developing a pan-European ecosystem for both customers and partners. This ecosystem strategy focuses on enhancing Business-to-Consumer (B2C) and Business-to-Business (B2B) growth vectors to deepen relationships with customers and partners.

The company's B2C strategy focuses on offering high-quality shopping experiences, expanding into various lifestyle categories, and providing personalized inspiration and entertainment to make fashion discovery more engaging. In contrast, Zalando's B2B approach will open up its logistics, software, and service capabilities to support brands and retailers both on and off the Zalando platform, with the potential for the B2B sector to become a multi-billion-euro business.

Zalando aims for a compound annual growth rate of 5-10% for both Gross Merchandise Volume (GMV) and revenue over the next five years, targeting an adjusted EBIT margin of 6-8% by 2028. These objectives are supported by plans to capture the equivalent of 15% of the European fashion market, valued at 450 billion euros.

The company's B2C strategy is centered around distinguished qualities to boost customer engagement and retention, leveraging personalization and innovation to create more tailored digital experiences. For B2B, the focus is on leveraging Zalando's logistics and technology infrastructure to aid brands and retailers in navigating the complexities of cross-border e-commerce in Europe.

Additionally, Zalando reported its financial performance for 2023, meeting its revised guidance targets. Despite a challenging year for online fashion retail, the company saw GMV decrease by 1.1% to 14.6 billion euros and revenue by 1.9% to 10.1 billion euros, with an adjusted EBIT increase to 350 million euros. The strategic updates and financial discipline highlight Zalando's commitment to returning to growth and further improving profitability in 2024.