Online retailer Zalando has said it is shifting from a ‘platform’ to an ‘ecosystem’ model as part of its new growth strategy.
Announcing its latest financial results, the company said it plans to focus on both Business-to-Consumer (B2C) and Business- to-Business (B2B) in an effort to increase its share of the fashion and lifestyle e-commerce market.
This will include elevating existing categories such as Sports and Kids & Family as well as offering personalised inspiration and entertainment in the B2C segment, the firm said. For the B2B, it is opening up its logistics infrastructure, software and service capabilities to be a key enabler for e-commerce transactions of brands and retailers, regardless of whether they take place on or off the Zalando platform.
With both B2C and B2B, Zalando believes it can cover in the long term the equivalent of 15 percent of the European fashion market, which is worth 450 billion euros. In the medium term Zalando is aiming for a compound annual growth rate of 5-10% for both Gross Merchandise Volume (GMV) and revenue over the next five years.
“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.
He added: “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, software and services.”
In 2023, Gross Merchandise Value (GMV) decreased 1.1% to €14.6 billion euros and revenue declined 1.9% to €10.1 billion. Full-year adjusted EBIT rose to €350 million from €185 million euros, resulting in an adjusted EBIT margin of 3.5%, up 1.7 percentage points from 2022.
The company achieved the top end of its adjusted EBIT range in what it said was a “challenging” year for online fashion retail.
……….
