Zalando's growth outlook above overall fashion market

May 12, 2020 by
Sanne Leenders
growth

Zalando expects to grow its business at double-digit rates in 2020. The overall fashion market expects to show significant negative growth this year. The online fashion platform aims to grow its Gross Merchandise Volume (GMV) by 10-20%.

Zalando expects its revenue to grow within the same range, but slightly lower than the Gross Merchandise Volume due to the fast growth of the platform business. The online fashion platform expects to be profitable with an adjusted EBIT between €100 and €200 million. In addition, the online fashion platform plans investments between €230 and €280 million.

Factors of Zalando's growth

Zalando's growth is expected to be driven by the accelerated consumer shift from offline to online. Zalando's ability to invest independent of demand fluctuations and a challenging environment, as well as its accelerated platform transition are also factors for Zalando's expected growth. In addition, Zalando's Partner Program grew by 4.4%. Brands are transferring more of their business online to reach their customers during the COVID-19 outbreak and the governmental restrictions. Around 50 new partners joined Zalando's Partner Program in the past three weeks.

Confident in dubble-digit growth

Rubin Ritter, co-CEO, said the following: "We are confident that we will grow double-digit and at a clear profit in 2020. This will allow our partners to grow and gain market share in a challenging economic environment by building their business on Zalando. Many of them have significantly increased their activities on our platform in the past weeks, and we will continue to make it easier for them to reach customers across Europe".

Customers shop for more sustainable products

Zalando experienced more customers shopping for more sustainable fashion. Almost 30% of customers bought more sustainable fashion in March. More sustainable fashion makes up around 10% of Zalando's current Gross Merchandise Volume.

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