Zalando, a European e-commerce giant based in Berlin (Germany), is winding up its apparel sourcing from India.
Quite expected! Its private-label segment ‘zLabels’ has not been performing well for quite some time in India and is now closed.
With the closure of zLabels, Zalando has announced the inclusion of an ‘everyday essentials’ apparel offering.
As of now, zLabels is just sourcing men’s shirts from a Bangalore-based vendor and knitted garments from a Tirupur-based exporter.
In apparels, the company used to source mainly high fashion garments (knitted as well as woven) from 8 to 10 exporters of India. Its sourcing amounted to about 20 million euros per year as every month it used to place an order of 300-400 SKUs (stock keeping units) and every SKU had a minimum order of 1,000 pieces. In many cases, it went up even higher.
However, from now on, zLabels will be doing its sourcing of shoes from India and basic garments from Bangladesh.
Coming back to a short brief on the company, zLabels started in 2010 with around 11 brands in apparel and footwear category to cater to its niche customers. “These 11 private label brands – Anna Field, Even & Odd, Friboo, Fullstop, Kiomi, Mint & Berry, Pier One, Twintip, Your Turn, Zalando Essentials and Zign – will be kept for the time being and reviewed in line with this new assortment strategy at a later point,” the company said earlier in 2019.
Notably, zLabels once had 272 sourcing partners and 450 factories across 24 countries.
A person familiar with all the matter told Apparel Resources on the request of anonymity, “Most of the apparel sourcing for the company is now done from Bangladesh which is expected to grow. In India, whatever orders we have committed, are supposed to be shipped soon.”
He further informed that there is very less probability that zLabels will start apparel sourcing from India again and this might happen only in case it thinks about offering value-added garments.
Once having a team of around 9 people in India, 5 of them have been retrenched with the remaining being assigned to manage leather bags and shoe sourcing from Bangladesh.
Hiring for Bangladesh is in process as business is increasing there. Another person familiar with the company told that the company’s operations in India from now on will be under Germany-based M+V marketing and sales having its office in Gurgaon.
With a platform approach and focus on fashion and lifestyle products, the company has its reach in 17 European markets. It believes that zLabels was launched to ‘fill the blank spots’ in the company’s assortment, offering products that were not being provided by the company’s partner brands.