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Online growth the next goal for Zara owner Inditex

Zara owner Inditex today reported that net sales rose by 5% in the first nine months of its financial year compared to the same period in 2012, but as the business looks to continue its solid growth of recent years, much of its focus could switch online.

Sales for the period between 1 February and 31 October totalled €11.93 billion and profit was up 1% year on year to €1.67 billion, but David Alexander, retail consultant at industry research group Conlumino, says that there is still work to do online for the business to catch up with the likes of pure-play fashion retailer Asos.

Having entered new markets in Ecuador, Georgia, Armenia, Bosnia-Herzegovina and Macedonia in 2012, and then focused on refurbishments of its London, Madrid and Paris flagships in recent months, the company is expected to give more attention to its e-retail operations in the future.

The retailer – which owns eight fashion brands around the world – said this summer that it now sells goods online in 24 different markets, with Zara's online sales platform going live in Russia in August and the recent launch of a Zara Home/Massimo Dutti inaugurated web operation in Canada.  

Bershka, Massimo Dutti, Stradivarius and Oysho also rolled out online sites in Russia in the company's third quarter, too, while Zara plans to launch online in South Korea and Mexico next year.

Inditex's websites are not yet optimised for mobile devices, but there is a confidence that the company has significant potential to be successful online, despite being a relative latecomer to eCommerce when it launched its first transactional website in 2010.

"The fast-fashion business model is ideally suited to this channel and there is plenty of scope for growth," explained Conlumino's Alexander.

"Zara recently launched online in Russia following on from last year's launch in China and there is continued speculation that it will launch an online store on popular Chinese shopping website, Tmall."

Zara Home unveiled its inaugural stores in Canada, Sweden, Indonesia, Honduras and Thailand during the third quarter, but with the group now having entered a significant number of new territories over the last few years, international store expansion seems to be slowing down for now. Alexander argues that there is "a solid plan in place for the future", though.

"Focusing on expanding its online presence and on consolidating its position within existing markets looks like a sound strategy and should stand the retailer in good stead for the challenges ahead," he explained.

In the past 12 months, Inditex has created more than 8,000 new jobs around the world, including approximately 800 in Spain. The group's global headcount totalled 124,880 as of 31 October 2013.  

http://conlumino.com/

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