Zalando and About You react to the success of Shein and Temu's direct delivery model. About You will offer items directly from factories. Zalando relies on its logistics network. Shein reported $45B sales, Temu's parent $37B in 2023.
About You is adopting the direct delivery model from factories, inspired by Asian competitors Temu and Shein. CEO Tarek Müller announced the plan to offer items directly from factories to provide lower prices. This aligns with Amazon's similar strategy. The goal is to reduce customer loss due to high competition from Temu and Shein, who spent billions on marketing to capture market share. In 2023, Shein reported $45B in sales, a 55% increase from the previous year, and Temu's parent company Pinduoduo reported $37B in sales with $8B in profit.
About You aims to use European and Turkish manufacturers instead of Chinese factories like Shein and Temu. Müller claims that About You is unique among its competitors, including Zalando, Boohoo, and Asos. However, experts like Alex Graf, CEO of Spryker, believe it’s nearly impossible to replicate the success of Shein and Temu quickly. Shein's head of strategy, Peter Pernot-Day, emphasized the ten years and $70M investment needed to develop their supply chain.
Zalando, in contrast, is emphasizing its logistics capabilities. David Schröder, COO of Zalando, warned against hasty adoption of direct delivery from manufacturers due to quality concerns. Zalando's strategy involves its new business unit, Zeos, which provides logistics services including 12 logistics centers, 20 returns centers, and 40 transport service providers. Zeos aims to support retailers who don’t sell through Zalando, promoting quality and brand trust.
E-commerce expert Alex Graf advises Western retailers like Zalando and About You to consider collaboration with Shein. Graf suggests they rent Shein's supply chain to ensure quality while reducing costs. Shein’s Pernot-Day mentioned that Shein plans to offer its supply chain as a service to other retailers. This could potentially allow production costs to be reduced by 20-40%. Despite these options, Zalando focuses on its logistics and luxury segments, maintaining that quality is crucial for customer trust and differentiates them from Asian competitors.
Can Zalando and About You compete with Shein and Temu?
Each week we select most important sector news and statistic
so that you can be up to speed