Record order numbers boosts Zalando’s Q2 trading results

The fastest growth in online site visits for six years has helped revenues surge by 20.1% to €1.6 billion at European eCommerce giant Zalando.

Site visits climbed by 34.3% annually to reach 986.4 million – 83.5% of which came through mobile devices – resulting in the record number of 36.1 million orders in Q2 2019.

The online platform also posted its strongest active customer growth for any second quarter, increasing the number of active shoppers across its 17 European markets to 28.3 million, a year-on-year rise of 15.2%.

Gross merchandise volume (GMV) grew by 23.7% to €2.0 billion, and the Berlin-headquartered retailer said it was raising its profitability outlook to the upper half of its €175-€225 million forecast range.

“We are very happy with our performance in the second quarter and first half of 2019,” noted Zalando CFO David Schröder on an earnings presentation call this morning. “We have delivered the third strong quarter in a row, have continued to gain market share and have seen positive development of our key customer KPIs.”

The average number of orders per active customer at the e-tailer also grew from 4.2 to 4.6 in Q2. But the average basket size fell slightly from €56.80 to €56.40 – a decline that Schröder described as a “historic trend”, but one that was slowing.

Zalando also announced it had doubled the number of same-day or next-day parcel deliveries in Germany compared to Q1. However, Schröder declined to reveal precise volume figures, instead partly attributing the rise to a growth in the country’s ‘Plus’ customers – premium subscribers who receive a fashion advice service and faster deliveries.

Schröder added that the company was making other investments in its fulfilment operations to meet consumer demand, including the trial of same-day evening deliveries in Switzerland, increasing the number of pick-up and drop-off points in Italy and Poland, and the construction of a new warehouse in the Netherlands.

This Rotterdam-based facility will be up and running by mid-2021, expediting delivery times to Zalando customers in the Benelux region and northern France, and giving the firm the potential to handle up to €14 billion in GMV.

The company has also recently committed to upping its green credentials, announcing the launch of a variety of ‘sustainable brands’ on its marketplace this summer. It is also introducing two-factor payment authentication for online customers, to meet the upcoming requirements of the revised Payment Services Directive (PSD2).

Founded in 2008, Zalando now has a workforce of around 14,000 people in Europe and today said it was hiring for a further 500 positions across the business. It sells over 1,900 brands on its platform – with plans to add beauty retailer FeelUnique in the UK – and its partnership initiative has expanded to include 1,300 offline stores.

“The growth of our Partner Program leads to a more attractive and diverse assortment for our customers,” Schröder concluded. “We will continue to see GMV growing faster than revenues, fully in line with our long-term strategy.”