Zalando Grows Sales and Users in Q1, Named TikTok Shop's Logistics Partner in Key Markets
PARIS – Zalando's ecosystem strategy is paying off with a strong first quarter, rebounding from losses in 2024.
In the three months to March 31, revenue at the German online shopping giant grew 7.9 percent to 2.4 billion euros.
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'Our ecosystem strategy is progressing well, and customers and partners are embracing our expanding offerings,' said co-chief executive officer David Schroeder.
It has boosted sales, with consumer revenue hitting 2.18 billion euros in the quarter, up from 2.02 billion year-over-year.
Consumer sales were driven by bargains at the end of the season, and the company added 2.9 million active users for an all-time high of 52.4 million customers in the quarter. Gross merchandise volume (GMV) was up 6.5 percent to 3.5 billion euros.
The company launched a strategy to expand its offerings and move into lifestyle categories one year ago, including adding entertainment into its site to drive engagement and inspiration beyond the simple search-click-buy.
That strategy included adding Pinterest-like curated boards, a functionality that has attracted more than 1 million users since it was rolled out to all markets. Zalando will continue to build out this function with users able to create their own boards and interact with other user-generated content to drive engagement.
It's also working on creating its own content and livestream shopping channels to further keep shoppers in its ecosystem for entertainment purposes.
For example, Gentz said, since the launch of lifestyle-related 'Stories' in 2023, Zalando has told 500 stories, utilizing 700 brands and 7,000 products. That kind of content has an impact on sales.
Other key drivers have been the continued expansion of its loyalty program Zalando Plus, now available in 13 markets including Germany, Italy, Spain, France and the Netherlands. Fifteen percent of its users in those markets have already enrolled.
Zalando has sought out more upscale partnerships as well. Moves have included becoming the exclusive retail partner for Diane von Furstenberg in Europe, which was backed by a huge marketing campaign touting the platform's fashion credentials, as well as adding Marc Jacobs to its mix in the quarter.
The company said it logged 'double-digit growth' in the designer category. The average basket bumped up to 61.1 euros per order, from 60.4 euros in the same period last year, with 58.5 million orders – 3.3 million more year-over-year.
Zalando said it sees no signs of slowing down, despite choppy economic waters, with sales in the second quarter off to a 'promising start.'
Behind the scenes, logistics and fulfilment arm ZEOS has continued to grow its reach. The company scored big when it was selected as TikTok Shop's preferred logistics partner for fashion and lifestyle in Germany, France and Italy. The first rollout was completed for Germany in the first quarter, as the company expands into social commerce support.
Revenue in that category was up 11.6 percent in the first quarter to 240 million euros.
'In B2B, we are delighted to see a continuation of our double-digit growth trajectory as we are working to advance our ZEOS offering with a particular focus on logistics and software solutions this year,' Schroeder added.
The company said it wouldd continue to roll out its platform to new markets such as Portugal, Greece and Bulgaria and sees a positive outlook 'despite the fast-changing geopolitical and macroeconomic environment.'
Zalando confirmed its full-year guidance, anticipating revenue to ramp up between 4 and 9 percent over 2024, with adjusted EBIT at 530 million to 590 million euros.
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