Zalando and About You Raise Positive Outlook for the Holiday Season

Zalando and About You in 2024: Key Insights

• Raising Positive Expectations for the Holiday Season: Due to the positive sales development of this year, Zalando and About You adjust their expectations for end-of-the-year sales to an upper level.

• Rising Order Numbers and AOV: Cold weather and strategic adjustments led to growing benchmarks this fall.

Zalando and About You expect sales growth for the holiday season and are raising their initial expectations for revenue growth. Both are among the top fashion platforms in German eCommerce. Zalando and About You have suffered losses in recent years as inflation weakened consumer spending and physical stores reopened, which reduced the immediate need for online purchases. 

Now, however, both companies have adjusted their forecasts. About You released its performance for the first half of 2024: Quarterly sales grew by 2.4% year-on-year, 8.6% in DACH. Growth rates in Germany rose to almost 10%. For Zalando, revenues grew by 3.4% year-on-year. Here is why.

About You and Zalando: Rising Order Numbers and AOV 

Both About You and Zalando saw an increase in customer orders as the weather turned colder and online shoppers ordered winter clothing. The average order value (AOV) increased along with the number of customers. About You's software-as-a-service platform, SCAYLE, is set to grow in scope to serve more stores and integrate additional features such as payment processing. 

Zalando also increased profitability and revenue growth. The company's positive outlook is driven by growing demand for its sportswear collections and an increased focus on the quality of its offerings. Similar to About You, AI integration and B2B are other growth drivers.

Zalando has traditionally generated more eCommerce net sales than its direct competitor, About You: At a level of just under US$3 billion, Zalando has maneuvered to return to growth after 2022. About You experienced a similar development, but at a lower level: Revenues have fluctuated between US$800 million and US$900 million in recent years.

Differentiation in the Market

About You and Zalando were faced with competition in international eCommerce, especially from the much-discussed Temu and Shein. Both platforms undercut About You and Zalando in terms of price and offer a larger product range.   

About You plans to introduce its own version of the C2M model, while Zalando focuses on a segment with more quality products. Zalando expanded its range of lifestyle products and improved the customer experience by reducing delivery times and personalizing the shopping experience. Given their differentiators, neither About You nor Zalando expect Temu or Shein to take significant market share away from them.

Sources: Comdirect: 1 2