Zalando puts launch in the US on hold

Ecommerce fashion giant Zalando is planning to launch in the US next year. To do so, it will invest at least one hundred million euros. However, current disappointing financial results have put the plan on hold.

German online fashion platform Zalando has been secretly working on ‘project Kangaroo’, which entails a launch in the US, sources told Business Insider. More than 100 employees are currently working on the project. According to them, Zalando will invest a minimum of 100 million euros in order to launch activities in the US.

‘Zalando wants to launch in the most wealthy regions first.’

The company wants to launch in the northeastern states, such as Connecticut, Maine, Massachusetts, New Hampshire, New Jersey, New York, Pennsylvania, Rhode Island and Vermont. These regions are said to be the most wealthy. Additionally, it will use influencer marketing to create brand awareness. Competitor About You has already been using this tactic in its markets.

Distinguishing from US competitors difficult

While influencer marketing is slowly becoming more mainstream in the EU, this marketing method is commonly used in the US. Employees are worried that Zalando will not be able to distinguish itself from competitors. While the platform’s free returns and large product range are selling points in the EU, these selling points are also more mainstream within the US.

‘Zalando revenue decreased 1.5 percent in Q1 2022.’

Another obstacle is the company’s current financial situation. While Zalando generated a total revenue of 10.4 billion euros in 2021, its revenue decreased by 1.5 percent in Q1 this year. Additionally, its market capitalization decreased from 26.35 billion euros by July 2021 to 9.4 billion in May this year.

Project Kangaroo on hold

Because of persisting inflation and supply chain disruptions, the company expects more negative financial results. As a result, ‘project Kangaroo’ is currently on hold. However, according to insiders, the launch is still set to take place in 2023. A spokesperson from Zalando said: “In the current economic situation, we are concentrating on serving our customers and partners in existing Zalando in the best possible way.”