145 million orders, more than 4 billion site visits and 4.6 million additional active customers: Zalando has significantly grown its business in 2019. A record number of 31 million customers (2018: 26.4 million) have ordered from Zalando in the past year, bringing the company closer to its vision to become the Starting Point for Fashion in Europe.
The strong development of customer KPIs translated into strong financial growth. For the full year, Europe’s leading online platform for fashion and lifestyle grew its GMV (Gross Merchandise Volume) by 23.6% to EUR 8.2 billion (2018: EUR 6.6 bn), its revenues by 20.3% to EUR 6.5 billion (2018: EUR 5.4 bn) and achieved an adjusted EBIT of EUR 224.9 million (2018: EUR 173.4m). Growth was especially pronounced in the fourth quarter with GMV up 24.3% to EUR 2.5 billion and revenue up 19.5% to EUR 2 billion at an adjusted EBIT of EUR 110.4 million, pushed by record-breaking results during Cyber Week.
“We look back at a very successful year. We achieved strong financial results in every single quarter,” says Zalando CFO David Schröder. “While delivering those results, we have made strong progress on our strategic agenda.”
In line with its platform strategy, Zalando significantly grew the share of the Partner Program, which at the end of the year accounted for 15% of Zalando’s Fashion Store GMV. Growth was enabled through scaling services that make it easier for brands to be successful on the platform such as Zalando Fulfillment Solutions (ZFS) and Zalando Marketing Services (ZMS). In the fourth quarter, around 40% of Partner Program items were shipped through ZFS.
In 2020, Zalando will make several investments that underline its ambition to become the Starting Point for Fashion. Firstly, the company will expand its premium segment to include luxury brands. In order to gain more market share in the EUR 38 billion market for premium fashion, Zalando plans to double its premium and luxury assortment before year end 2023. The company has recently added Moschino Couture and Alberta Ferretti, and will further expand the category by creating an inspiring and relevant experience for both customers and brand partners.
“Especially younger customers like to mix and match high-street fashion brands with sports and designer pieces. Premium has been our fastest-growing category in the past months, and we see a huge potential to build on that,” says David Schneider, Zalando co-CEO.
Additionally, the company will scale its pre-owned fashion pilot and launch “Pre-Owned” as a new category on the Zalando destination. Starting in the third quarter of 2020, customers will be able to buy curated pre-owned fashion, as well as sell their pre-owned fashion items to Zalando. The category launch supports Zalando’s ambition to build deep customer relationships by creating even more customer touch points, and brings the company closer to the goal to become a sustainable fashion platform.
Zalando will furthermore extend its European logistics network by opening a local warehouse in Spain. With this warehouse, Zalando will significantly improve its convenience offering and thereby unlock future customer growth in the region.
In line with its growth strategy for 2023/24, Zalando expects to grow its GMV between 20 and 25% and it expects revenues to grow between 15 and 20% in 2020. The company expects continued profitable growth and an adjusted EBIT between EUR 225 and 275 million, as well as capital expenditure of around EUR 330 million. These expectations exclude a potential negative impact caused by the Coronavirus.
Notes to Media and Capital Markets
The company will host a press call at 09 a.m. CET today. Zalandos annual report 2019 and the earnings presentation for analysts and investors is available on the Zalando Investor Relations website. Zalando will report results for the first quarter of 2020 on May 7, 2020.
Zalando is Europe’s leading online platform for fashion and lifestyle. Founded in Berlin in 2008, we bring head-to-toe fashion to 31 million active customers in 17 markets, offering clothing, footwear, accessories and beauty. The assortment of international brands ranges from world famous names to local labels. Our platform is a one-stop fashion destination for inspiration, innovation and interaction. As Europe’s most fashionable tech company, we work hard to find digital solutions for every aspect of the fashion journey: for our customers, partners and every valuable player in the Zalando story. Our goal is to become the starting point for fashion.