Zalando – the slightly different 10 years challenge
“Ordering shoes on the internet without trying them on? That’ll never work!”1
While the financial crisis was keeping everyone busy in 2008, two student buddies, Robert Gentz and David Schneider, laid the foundation for one of the biggest online fashion empires in Europe: Zalando. An online fashion company that today has 300,000 different products on offer, more than 26m active customers and over 3.1bn site visits per year2. A success story that is also measurable by looking at the revenue development: Within ten years, the online fashion empire skyrocketed to reach a revenue of almost €5.4bn.
One of the main reasons for the success is that Zalando set new standards: free delivery and a 100-day right of return, as well as an aggressive expansion strategy especially within the first years – country and product range wise.
Back in 2008/09, Zalando was only focused on selling shoes online in two different countries: Germany and Austria. Shortly after, clothes and bags were added to the product range and so were other regions in Europe. The first countries to follow were the Netherlands and France in 2010 – an expansion that taught the founders a lesson: Things that work in one country don’t necessarily have to work in another. The famous TV spot “Scream with joy”, which had proven to be a success in Germany, won the award for the year’s most irritating ad in the Netherlands1 – twice in a row. A learning for the founders. Service and communication were adapted to local habits and the expansion continued. In 2011, Italy, Switzerland and the UK followed, and the revenue increased to over half a billion euros in the meantime. Within the following two years, 2012 and 2013, Zalando entered the Scandinavian market – Denmark, Finland, Norway and Sweden – as well as Belgium, Luxembourg, Spain, and Poland. At the time, the one billion in turnover had already been cracked. The revenue increased continuously, and another two countries followed in 2018: Czech-Republic and Ireland. Impressive. Nevertheless, you might ask yourself: Are we talking about the most dominant fashion player in Germany or even in Europe? The answer is simple: zalando.de takes the first spot in German online fashion. Probably for years to come.
In other relevant markets, such as France which Zalando entered in 2010 or Spain which they entered in 2012/13 they are covering a top 3 spot. U.K. alone poses a challenge to the Berlin fashion player. Although they entered the market back in 2011, they are still not able to compete against next.co.uk, johnlewis.com or asos.com.
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