Equity Story

  • Zalando’s business model is characterized by a strong logistic efficiency and warehouse network and a very broad product range with a high potential for diversification towards other countries or further fashion and beauty products, especially in the company’s core market Germany where overall sales grew by 16% (CAGR 2014-2019) in the last years.

  • Zalando is banking on its core competitive advantages such as strong affinity for customers’ demand (i.e. fashion trends and design with own labels), consciousness for environmental footprint (sustainable materials, enlarging product lifetime and data-driven production by demand) and services for customers and partners (CRM, consulting service for customers, fulfillment solutions for external partners as well as digital solutions).

  • Zalando’s fashion store registers high sales, but also high costs that curb the divisional margin to 2-3%. Zalando is investing in becoming a more tech-oriented business including 3D size's fit software, that can boost profitability and decrease e.g. shipping-cost of “wrong-size”-returns.

SWOT Analysis


  • Market leader in European online fashion retail

  • High logistics efficiency and warehouse network

  • High brand recognition in all operating markets

  • Cash-rich balance sheet to further expand tech leadership

  • Good CRM


  • All tech related services are in-house, which increases fixed costs

  • Customer target group is very wide, which may miss focus

  • Product range may overwhelm esp. in App

  • Large investments in innovations


  • New fashion adjacent product categories offer growth potential

  • Business model can be leveraged via entering new countries

  • Rollout on fashion platform adds new brands to its portfolio

  • New tech-oriented business lines could boost profitability

  • 3D size & fit software in development

  • Mobile Commerce


  • Very competitive market environment hampers margin growth

  • Customer acquisition costs may increase due to competition

  • Bricks and mortar retailers have compelling omni-channel capabilities

  • Partner Programme may not miss margin forecast

  • Government regulations in different countries

  • Dynamic and fast-paced market


Investment Score

Digital Score

Digital Community Champ

Digital Culture Provider

Digital Sales Maker

ESG Score


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