The Zalando marketplace is huge in Germany with 95% brand recognition amongst adult shoppers and have expanded across Europe with a present in Germany, Austria, Switzerland, France, Belgium, the Netherlands, Italy, Spain, Poland, Sweden, Denmark, Finland, Norway and the UK. Well know for fashion, in their latest annual report they set their sights high pointing out that they’ve only captured a single digit percentage of their potential market.
“The European Union is home to a population of more than 512 million people, with an annual fashion spend of 430 billion euros. Today, we serve just north of 1.6% of this demand, and while many consider us a large com-pany, we still consider Zalando a small company compared to our potential.”
– Robert Gentz, David Schneider, Rubin Ritter, Zalando Annual Report 2018
Selling on the Zalando marketplace isn’t as easy as signing up on some other marketplaces, you’ll have to have operations in Germany, your own website, ship via Hermes and have superb photography and you’ll be competing with Zalando as a retailer. Ideally you’ll be selling fashion which Zalando don’t already sell as they’ll prioritise their own offers over yours.
Merchants and brands selling on the Zalando marketplace are growing fast though, with 250 now signed up to the Zalando Partner Program and accounting for about 10% of Zalando’s €6.6 billion GMV. Zalando aims to increase this share up to 40% by 2023/2024, with Zalando Fulfillment Solutions and Zalando Marketing Services playing key roles in successfully scaling the Zalando platform.
In 2018, Zalando grew GMV by 21.1% to €6.6 billion and their goal for 2019 is to maintain and accelerate their momentum growing GMV by 20-25% (Zalando describe GMV the total amount that customers spend on the Zalando platform on merchandise from both wholesale and Partner Program). With ambitious plans to grow partner GMV 40% while still growing their total GMV, Zalando have big plans for their merchant partners over the next five years and the marketplace side of their business will be increasingly important.
There is no point sugar coating the opportunity – starting to sell on Zalando will be a much more difficult course to navigate than setting up on a new eBay or Amazon country site. However for those that succeed the rewards for fashion retailers are there for the taking and you’ll be trading on a site where you can maintain your prices and margins without the constant worry of new competitors under cutting you next week or next month.
