German retailer Zalando saw its group revenue decline 1.9 per cent in fiscal year 2023 (FY ’23), however it hopes its new pan-European strategy will expand its share of the European fashion market moving forward.
According to Zalando, company revenue for the fiscal year that ended on 31st December 2023 (FY ’23) decreased from € 10.34 million to € 10.14 million (US $ 11.09 million).
The store has also disclosed that it is changing its approach to become an ecosystem rather than a platform in an effort to expand into the business-to-business (B2B) and business-to-consumer (B2C) markets.
The retailer reported that, in what it called a “challenging year for online fashion retail,” it met its updated guidance for Gross Merchandise Volume (GMV) and sales in FY ’23 and reached the upper end of its adjusted EBIT range.
Zalando’s CFO Sandra Dembeck stated that the company is improving and investing in its “strategic priorities” of an “ecosystem vision” with its “healthy balance sheet”.
This covers the standard of the consumer experience, fresh takes on fashion and lifestyle, the use of technology to boost client interaction, and the growth of its business-to-business portfolio.
Zalando thinks that by strategically evolving from its present platform, its new ecosystem model would enable it to capture a greater portion of the fashion and lifestyle e-commerce market and strengthen ties with partners and customers in both B2B and B2C contexts.
Zalando wants to make a name for itself in the B2C market by putting quality first, improving current categories like Sports and Kids & Family, and providing customers with tailored entertainment and inspiration.
By utilising its software, logistical infrastructure, and service skills, the retailer is also broadening its reach into the B2B market by turning itself into a “crucial facilitator” for e-commerce transactions, whether they take place on Zalando’s platform or not.
Zalando believes that the B2B growth vector will eventually evolve into a multibillion-euro industry in the middle term. The company stated that it will support new financial targets through 2028 and that its modified strategy lays out a roadmap for growth in the medium future.
Zalando stated that it hopes to eventually account for 15 per cent of the € 450 billion European fashion market, which includes both B2C and B2B sales.
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