Zalando SE has big expansion plans for 2017.
The Berlin-based web-only e-retailer, the second-largest e-retailer in Germany behind Otto Group, generated 3.64 billion euros ($3.86 billion) in sales last year, up 23.0% from 2.96 billion euro ($3.14 billion) in 2015. It said this week it will invest some of its profit—it had 120.5 million euro ($127.7 million) in net income for the year—in expanding its fulfillment and services network across Europe.
The shoe and apparel e-retailer, which also lets brands sell through it as a marketplace, plans to open fulfillment centers in France, Sweden and Poland this year, bringing its total to eight. It operates four in Germany and one in Italy. The merchant, which began testing same-day delivery last year in four German cities—Berlin, Essen, Dusseldorf and Koln—says it currently can reach 20% of the European population with same-day delivery, and 95% within two days.
In addition to fulfilling orders consumers place with Zalando, the e-retailer offers Fulfillment by Zalando, a service similar to Fulfillment by Amazon, where the company stores and ships orders for merchants selling on the site. It is available on a limited basis—open to brands that Zalando carries—but the e-retailer plans to make it more broadly available in 2017.
“[In 2016], we have launched Fulfilment by Zalando, which has been successfully tested and rolled out to more markets, while we still continue to work an offline integration to also allow our brands to leverage, not only the inventory that they have with us, or in their own B2C warehouses, but also the inventory that they have in their offline retail locations,” said Rubin Ritter, Zalando co-CEO, on an earnings call earlier this week.
Zalando has about 1,800 brands and added 300 last year, including Kate Spade, Club Monaco and Abercrombie & Fitch Co. Kate Spade is No. 140 and Abercrombie is No. 58 in the Internet Retailer 2016 Top 500, which ranks retailers by their North American web sales.
Zalando also announced plans to acquire Kickz AG, which sells athletic shoes and apparel online and operates about 15 stores in Germany. Terms were not disclosed and the deal is expected to close by June. Zalando said the acquisition will help it strengthen its sports and lifestyle segment.
Other performance metrics help illustrate Zalando’s 2016 performance:
- 49% of 2016 revenue came from sales in Germany, Austria and Switzerland. 43% came from 12 other European markets in which Zalando operates. The remaining 8% of revenue came from other sources, including discount site Zalando Lounge, three outlet stores, and new initiatives, such as advertising services.
- Zalando has 19.9 million active customers, up 11.2% from 17.9 million in 2015.
- Mobile accounts for 65.6% of site traffic, up from 57.1%.
- It processed 69.2 million orders in 2016, and average order value was 66.6 euros ($70.56).
Zalando, launched in 2008, is No. 7 in the Internet Retailer 2016 European 500, and ranks No. 25 in the Global 1000.
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