Zalando said its focus on cultivating a dominant ecommerce platform for fashion and lifestyle across Europe has been central to its progress. This strategy encompasses both direct-to-consumer (B2C) and business-to-business (B2B) components as key drivers of growth.
Zalando 2024 performance
Despite a subdued economic climate, Zalando said it identified opportunities for expansion, evidenced by a 4.5% rise in gross merchandise volume (GMV) to €15.3bn ($16.51bn) and a 4.2% uptick in revenue to €10.6bn.
The company’s focus on profitable growth led to adjusted earnings before interest and taxes (EBIT) of €511m, up from €350m the year before.
Additionally, Zalando saw its adjusted EBIT margin climb from 3.5% in 2023 to 4.8% in 2024, bolstered by operational efficiencies and a substantial increase in B2C gross margin to 43.5%.
The company’s net income for FY24 was €251.1m, increasing significantly from €83.0m in FY23.
The retailer also reported a record number of active customers, reaching 51.8m by year-end, marking a 4.5% increase from the prior year. Number of orders also grew to €251.0m in FY24 from €244.8m in the prior fiscal year.
The company’s product assortment expanded significantly in 2024 with the addition of prestigious brands like Versace menswear and Marine Serre, among others. Zalando also became the exclusive European retailer for Diane von Furstenberg and improved online product presentations while innovating digital customer experiences like tailored size advice.
Zalando doubled its Adaptive fashion selection in 2024, offering over 600 styles catering to diverse needs across multiple categories. The company’s strategy to position itself as a lifestyle destination saw increased customer engagement across various propositions including Fashion, Lounge by Zalando, Beauty, Kids & Family, and Sports.
Furthering its third strategic B2C pillar — personalised inspiration and entertainment— Zalando enhanced its content hub ‘Stories on Zalando’, which has featured more than 500 stories since late 2023.
In line with its sustainability targets for 2025, Zalando achieved an 82% reduction in greenhouse gas emissions from operations and a 48% decrease in emission intensity from private label products since 2018.
The company maintains ambitious goals for net-zero emissions by 2040 for its operations and private labels, aiming for net-zero across its entire platform by 2050.
Zalando exceeds revenue and profit expectations thanks to strong premium assortment
GlobalData senior apparel analyst Louise Deglise-Favre says Zalando’s revenue growth continued to accelerate in the last quarter of FY2024, allowing its full year revenue to rise 4.2% to almost €10.6bn.
She suggests this is because “its superior product assortment of highly desirable premium, sportswear and beauty brands allowed it to appeal to more consumers”.
Deglise-Favre adds business-to-consumer FY2024 sales rose 3.8%, as Zalando continued to improve its product offering by adding desirable premium and luxury brands such as On, Versace menswear and Marine Serre.
She explains: “This allows it to operate in a more elevated landscape than other online fashion players such as Shein and Asos and target an older and more financially secure consumer base.
The retailer will continue this strategy in 2025, while also expanding its lifestyle proposition, including categories such as beauty, home and sportswear to enhance its destination appeal.
“As such, Zalando will expand its beauty proposition to Spain and Finland in 2025, and its outlet shopping site Lounge by Zalando will be rolled out to five additional markets, catering to price-conscious consumers looking for bargains,” she says.
Deglise-Favre points out Zalando also continued to differentiate itself from rivals through technology, launching and expanding innovative features throughout the year, such as its AI-driven shopping assistant and its Trend Spotter tool to help shoppers identify emerging trends.
Zalando also made great strides within its business-to-business segment, which rose 11.5%, as its comprehensive logistics and fulfilment offering through its ZEOS platform continued to expand, now servicing clients in 12 markets across ten different channels including their own websites and nine marketplaces. The retailer plans to continue expanding this offering, notes Deglise-Favre as it “already announced in November 2024 that it will launch as Next’s fulfilment partner in continental Europe from Q4 2025, allowing it to enter ten new markets”.
Zalando’s 2025 Outlook
The company projects an increase in gross merchandise value (GMV) and revenue of 4% to 9% over the previous year, with adjusted earnings before interest and taxes (EBIT) expected to land between €530m and €590m.
To bolster its vision of leading the fashion and lifestyle e-commerce ecosystem, Zalando announced plans in December to collaborate with ABOUT YOU for approximately €1.2bn.
Its 2025 projections do not include potential impacts from the ABOUT YOU acquisition, which should be completed in the summer and Deglise-Favre suggests it “will further strengthen its position in the European online fashion landscape”.
Zalando will continue to enhance its B2C offerings with a commitment to quality and customer experience.
Deglise-Favre asserts that in 2025, Zalando also plans to release the pilot for an outfit builder tool named StyleIt, which will allow shoppers to build complete outfits on a virtual avatar of their choice.
Plus, she says the retailer will also continue rolling out its updated loyalty programme Zalando Plus, which now operates with a points-based system rather than annual membership fees.
The retailer is also poised to enter new markets such as Portugal, Greece, and Bulgaria.
