German e-commerce giant Zalando has reported exceptional growth for the full year of 2021, with gross merchandise volume (GMV) increasing by 34.1% to €14.3 billion. The company’s revenue also rose by 29.7% to €10.4 billion, and its adjusted operating profit reached €468.4 million, up from €420.8 million in the previous year. Net profit saw an increase from €226.1 million to €234.5 million. Zalando attributes its impressive performance to significant customer growth, with over 10 million new customers added last year.
While Zalando’s report does not explicitly mention the Ukraine crisis, the company acknowledges that it expects sales growth to slow down in 2022 due to the normalization of life and the lifting of shopping restrictions at physical stores. Zalando forecasts sales to increase by 12% to 19% in 2022, reaching between €11.6 billion and €12.3 billion. Adjusted operating profit is expected to be between €430 million and €510 million. However, Zalando aims to achieve a GMV of €30 billion or more by 2025.
Looking back at 2021, Zalando expresses satisfaction with its faster-than-expected growth and emphasizes its focus on strategic initiatives to drive future growth. The company attributes its GMV growth to strong consumer demand for online offerings and increased adoption of its platform services by partners. However, as European economies gradually reopened, Zalando’s financial performance began to normalize during the second half of the year.
Zalando’s Co-CEO, Robert Gentz, highlights the effectiveness of the company’s strategy regardless of the market environment, as demonstrated by its strong results. He also emphasizes the significant customer growth and strategic progress achieved in 2021, indicating a vast opportunity ahead for Zalando. The company currently serves more than 48 million active customers across 23 markets.
Zalando’s membership program, Zalando Plus, played a crucial role in building deeper customer relationships and contributing to the company’s success in 2021. Plus members visited the site twice as often and spent three times more than non-Plus customers. The program reached over 1 million memberships in early 2022 and has plans to expand to more markets by the end of 2023.
Zalando also highlights the importance of its Partner Program and Connected Retail offers, which accounted for 30% of Zalando’s Fashion Store GMV. This underscores the increasing significance of partnerships in the company’s growth strategy. With over 5,800 brand partners and nearly 7,000 connected stores, Zalando aims to achieve 50% of Fashion Store GMV through its Partner Program and Connected Retail.
To support its growth and expansion plans, Zalando plans to invest further in its European logistics network. Currently, the network consists of 12 fulfillment centers in seven countries, and four new centers will be added by 2023. Zalando expects its total capital expenditure for 2022 to range between €400 million and €500 million.
Overall, Zalando’s impressive performance in 2021 reflects its strong customer growth, strategic initiatives, and effective business strategy. The company’s focus on partnerships, membership programs, and logistics expansion positions it well for continued growth in the e-commerce sector.
Links:
1. For more information on Zalando’s performance: https://www.zalando.com/corporate/ir-newsroom/analyst-and-investor-call/Q3_2021/data/Q3_2021.pdf
2. Zalando’s official website: https://www.zalando.com/
