👗 Zalando to Open Tech Hub in Shenzhen
Zalando, the German online fashion retailer, revealed plans to open a new tech hub in Shenzhen, China. This site will focus on harnessing local expertise in social commerce, a crucial area for e-commerce growth. However, Zalando’s Chief Financial Officer, Sandra Dembeck, emphasized that there are no immediate plans to expand their marketplace into China. This decision comes as Zalando continues to concentrate on the European market, serving around 50M active customers across 25 countries.
🏃♀️ Expanding into Premium Sportswear
Zalando has been strengthening its portfolio with premium sportswear brands like Lululemon, Hoka, and On Running, responding to increasing competition from low-priced retailers such as Shein. These brands are experiencing robust growth in China, driven by a rising interest in health and wellness activities like yoga and running. Still, Zalando remains focused on the European market rather than competing directly in China.
💰 Strong Financial Performance
Zalando reported significant financial growth in Q2 2024. Adjusted earnings before interest and taxes (EBIT) rose nearly 20% to $188.6M, while net profit jumped by almost 70% to $105.2M. This success is attributed to effective inventory management and lower logistics costs. The company’s GMV grew by 2.8% to $4.2B, and revenue increased by 3.4% to approximately $2.9B.
👩💼 CFO Departure
In addition to financial success, Zalando announced that CFO Sandra Dembeck will leave her position when her contract expires in February 2025. The company has begun searching for her successor. Despite this leadership change, Zalando remains committed to its strategic goals, with its new tech hub in China playing a key role in achieving future growth, albeit without entering the Chinese market directly.
Do you think Zalando should enter the Chinese market?
