Zalando: another year without growth

Zalando expects its revenue to be 0.5 to 3 percent lower this year compared to 2022, when the company already saw a 0.1 percent decrease in revenue. While the bottom line loss is narrowing, Zalando is struggling to attract buyers. Particularly in the DACH region, spending is under pressure.

These insights come from the third-quarter figures presented by Zalando. Revenue decreased by 3.2 percent, Gross Merchandise Volume (GMV) dropped by 2.4 percent. Zalando now attributes 39 percent of its trading to sales partners on its platform, which is 4 percentage points more than a year ago.

Zalando relies on 39% of its trading from sales partners

Despite the abundant offerings, fewer customers are being attracted compared to last year. The number of active Zalando customers decreased from 50.2 million to 50.1 million. They ordered less frequently, but spent more on average per order.

Challenging conditions

Zalando attributes the disappointing results to challenging macroeconomic conditions, leading to low consumer confidence and decreasing online spending. The company also points to the weather, citing ‘the warmest September ever recorded in Europe’, which caused consumers to delay their autumn and winter purchases. The DACH region, in particular, is where Zalando took a hit, with revenue decreasing twice as fast as elsewhere.

Zalando suffers the biggest blow on its home market

The DACH region is the most profitable for Zalando, where the company managed to secure a significant operational profit of 48.4 million euros. In the rest of Europe the company recorded a loss of 28.9 million euros. Overall, Zalando is operating positively (EBIT), but it reports a negative net income of 8.2 million euros. However, this result is an improvement from the previous year, thanks to cost-saving measures. “Our financial discipline allowed us to deliver another quarter of improved profitability”, Zalando’s CFO Sandra Dembeck states.

Storytelling, logistics, and technology

Zalando’s new figures follow disappointing second quarter results when revenue and GMV decreased by 2.5 percent and 1.8 percent, respectively. Essentially, Zalando, which recently removed product reviews and introduced fulfillment for third-party retailers, has continued its downward trend.

“Storytelling, logistics, and technology are key to boost our future growth”, according to Dembeck. “Our healthy balance sheet provides us with the financial flexibility to make these strategic investments.”