Zalando wants to reach luxury and second-hand buyers

The rapidly spreading corona virus also employs well-known online retailers. “So far we have had no material effect on our business,” said the head of the fashion platform Zalando, Rubin Ritter, on Thursday in Berlin. “But the situation could develop very dynamically in the coming weeks, that's something we have to reckon with.” All goods for the summer are already in the stores. However, it remains to be seen whether the novel corona virus (Sars-CoV-2) will have an impact on consumer demand. After a satisfactory business year, Zalando intends to position itself significantly stronger in two segments: in the luxury fashion business and in second-hand clothing.

“We are a fairly large company,” said Ritter , “But compared to the opportunities ahead, we are still small.” Zalando estimates the global fashion market as a whole at around 450 billion euros. Around a quarter of these are implemented online. Zalando plans to expand its market share to five percent in the coming years. “That shows how much growth is still possible,” said Ritter.

Luxury is a growth market online

No segment online is currently growing so strongly like luxury brands. By 2023 Zalando therefore plans to double its premium range. “The premium category has grown fastest in recent months and we see great potential to build on it,” said Zalando co-chair David Schneider. Zalando primarily targets younger customers. “The company has recently started selling brands such as Moschino Couture and Alberta Ferretti,” it said. Further offers are to follow.

In addition, the business with sustainable and second-hand clothing is to be expanded. Already customers can use an app to take photos of their used clothing and sell it to Zalando. From autumn this option will also be opened to all other customers via the Zalando platform. However, the company does not pay money, but issues vouchers.

20 percent growth

In the past financial year, Zalando increased sales by a good 20 percent to 6.5 billion euros. Gross goods volume, which includes total customer expenditure for both Zalando goods and those from the partner program with other retailers, rose by just under 24 percent to 8.2 billion Euro.

All in all, Zalando earned almost 99 million euros, almost twice as much as in the previous year. Zalando grew significantly, particularly in the final quarter, which also includes the Christmas business. The company expects further sales growth in the current year. However, the forecast does not include any negative effects from the corona virus.

However, other construction sites remain: the number of orders per customer was 4.7, 6.5 percent above the level of the previous year. At the same time, the average shopping cart size decreased slightly with 56, 6 euros. More orders cost more. The company is therefore interested in larger shopping carts and fewer individual orders. “We have therefore introduced minimum order values ​​in 9 of our 17 markets,” said Ritter. Germany is not included.

The stock exchange reacted cautiously to the solid figures. Zalando's papers recently dropped by 7 percent to 41, 73 euros, putting them at the bottom of the list MDax of medium-sized values. In the meantime, the share certificates had dropped by more than 9 percent, the lowest level since the beginning of December. The main reason for this may be the subdued outlook of the successful company from the point of view of the dealers. (AP)

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