Zalando’s momentum keeps going, and the e-tailer is looking at new ways to grow after posting strong results for the fourth quarter of the year. One of the highlights was a jump in the number of site visits, which progressed by 31.9 percent to 960.7 million.
The company’s revenues grew in the quarter by 19.5 percent to reach €1,985 million, while the gross merchandise volume (GMV) rose by 24.3 percent to €2,500 million, thanks in part to record-breaking results during the Cyber Week.
The company saw a 14.8 percent increase in revenues in the DACH region (Germany, Switzerland and Austria), which accounted for 44 percent of total turnover. In the rest of Europe, the business grew by 21.7 percent from the year-ago quarter.
Online shops, which the company calls fashion stores, still represent the company’s main sales channel. The company’s web stores generated revenues of €1.820 million, up by 18.3 percent. The off-price segment – including Zalando Lounge, the company’s outlet store and its overstock management operation – achieved €206.6 million in sales.
The adjusted operating margin declined by 1.5 percentage points to 5.6 percent, while the net income soared by 52.2 percent to €85.4 million.
During the past year, the number of active customers reached 31.0 million, or 17.1 percent more than in 2018. They placed 145 million orders in total. The company also recorded more than 4 billion site visits.
In line with its platform strategy, Zalando significantly grew the share of its partner program, which at the end of the year accounted for 15 percent of the web stores’ GMV. The management attributed this to the launch of new services, such as Zalando Fulfillment Solutions and Zalando Marketing Services, that make it easier for brands to be successful on the platform.
Overall, the GMV jumped by 23.6 percent to €8,200 million, while revenues soared by 20.3 percent to €6,482 million. Net earnings reached €99.7 million, up from €51.2 million in 2018.
Based on these strong results, Zalando will make several investments in 2020 to boost its development. These include expanding its premium segment to include luxury brands, with a view to doubling its premium and luxury assortment before year-end 2023. The management pointed out that Premium has been the fastest-growing category in the past months.
The company will also scale its pre-owned fashion pilot and launch “Pre-Owned” as a new category on the Zalando site. Starting in the third quarter of 2020, customers will be able to buy curated pre-owned clothing, but also sell their pre-owned fashion items to Zalando. The group believes this is a step towards becoming a sustainable fashion platform.
Zalando will furthermore extend its European logistics network by opening a local warehouse in Spain.
In line with its growth strategy for 2023/24, Zalando expects to grow its GMV by 20 to 25 percent, contributing to total growth of 15 to 20 percent in 2020. These expectations exclude the potential negative impact of the coronavirus.