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Zalando SWOT & PESTLE Analysis

ID : 52774953| Sep 2020| 15 pages

COMPANY PROFILE -Zalando

Business Sector :Fashion and lifestyle e-commerce

Operating Geography :Germany, Europe

About Zalando :

Zalando.se is a fashion and lifestyle e-commerce company that was founded in the year 2008 with headquarters located in Berlin, Germany. The company currently has presence in 17 countries and the net income for the year 2018 was estimated to be around 5.4 Billion euros with an EBIT amount of 119.2 million. In the year 2018 it fulfilled over 100 million orders from the 26 million active members on the platform. The company is a publicly traded and listed on the MDAX. The company has shown rapid growth with it currently having partnership with over 2000 brands, setting up of independent fulfillment program and centers and providing services to partner brands in Netherlands, Spain, Austria, France, Germany. Zalando has also been actively diversifying into setting up brick and mortar shops and outlets for beauty products as well as stores for fashion in specific locations. It is active is the seeding and development of new technology through its Grassroots Tech Innovation which includes projects such as Slingshot, Hack Week, Innovation Lab. They have cornered a large portion of the online retail business using adaptive marketing strategies such as single day delivery and a 100-day return policy, promoting eco-friendly business trends, and hosting conferences and events giving them mass popularity. Their commitment to robust growth backed by technological innovation, social consciousness, and a start-up like agility has allowed them to be the 17th largest global retailer by sales figures. The company has more than 15,000 employees as of early 2020.

Zalando Revenue :


EUR 5,387 million - FY ended Dec 31, 2019 (YoY growth of 20%)
EUR 4,489 million - FY ended Dec 31, 2018

Competitive Analysis of Zalando

SWOT
PESTLE
The SWOT analysis of Zalando is presented below:
Strengths
Weaknesses
1. Leading multi-brand fashion aggregator
2. Diversification into allied fields
3. Own warehousing and fulfillment centers
4. Strong focus on research and innovation
5. Consistent Profitability over the years
6. In house software research and development
1. Lack of follow through on projects
2. Slow business expansion and limited global presence
3. Dependence on brand partners
Opportunities
Threats
1. Brick and mortar stores
2. Immense market opportunity over next 5 years
3. Leasing of algorithms
4. Environment friendly clothing
1. BREXIT to impact Zalando operations
2. Lower capital reserves affect competitive ability
3. Stricter copyright regulations
4. Potential entry of Instagram in e-commerce
5. Increasing return rates in e-commerce
SWOT & PESTLE (combined)
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Detailed SWOT Analysis of Zalando

 

Strength

1. Leading multi-brand fashion aggregator: Zalando has emerged as a leading multi- brand fashion aggregator with a #1 ranking in Europe for ‘most visited fashion site’ in 2018. Studies have shown that nearly 45% customers prefer to shop on a multi brand platform. The company has a vast portfolio achieved through partnerships with numerous brands including verticals, sport specialists and premium luxury brands. In 2018, the company had over 400 brands included in its partner program and over 2000 brands under its Wholesale 2.0 business model. Major brands like L’oreal, Clinique, Swarovski, Maybelline, Mac, Hugo Boss and Bershka are only some of the more popular brands being showcased by the company. The Zalando in fact is well known for claiming “If it is not on Zalando, it does not exist.” The company’s foray into multi brand marketing on social media sites like FB and Instagram has helped also helped it increase demand and acquire new customers at a faster rate.

2. Diversification into allied fields: The company has been successfully been able to spin off several subsidiaries; this includes the launch of their own individual label selling their own clothing range which has been tailored and customized on the basis of the changing trends. They have launched their own fulfillment services for the partner that makes it more convenient for smaller brands to be a part of the larger brand and permits to keep them partners at fair terms. They have their own successful beauty and make up studios as well as the “Zalando lounge”. Many of these may be categorized under the same roof but the setup permits them to be independent and mold itself to the location where its set up but also allows Zalando to have absolute control and make sure it stands up to the norms set by the other arms of the company. It also has an established media service called “Zalando media services” which serves clients in 15 countries.

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Weakness

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Opportunity

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Threat

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Zalando SWOT & PESTLE Analysis - SWOT & PESTLE.COM

SWOT & PESTLE.com (2020). Zalando SWOT & PESTLE Analysis - SWOT & PESTLE.com. [online] Available at: https://www.swotandpestle.com/zalando/ [Accessed 28 Oct, 2020].

In-text: (SWOT & PESTLE.com, 2020)

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Zalando SWOT and PESTLE analysis has been conducted and reviewed by senior analysts from Barakaat Consulting.

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