Letter to shareholders 2024

Dear shareholders,

The year 2024 was one of substantial progress, both in evolving our strategy and in its execution. Since our early days, we have been driven by a relentless focus on the needs of our customers and partners, offering them best-in-class experiences to make Zalando the leading multi-brand fashion destination in Europe. And as societal shifts and the evolving needs of our customers and partners have created new opportunities, we are actively embracing and pursuing these.

Building a pan-European ecosystem

In March 2024, we announced our updated strategy to build a pan-European ecosystem for fashion and lifestyle e-commerce around our two growth vectors: business-to-consumer (B2C) and business-to-business (B2B). This will enable us to cover a larger share of the 450bn EUR European fashion and lifestyle market as well as deepen relationships with our customers and partners. The updated strategy will also help Zalando to be an enabler of positive change for a more sustainable and inclusive future in the fashion and lifestyle industry.

In B2C we are working to differentiate ourselves through quality to offer the best possible shopping experience in fashion and lifestyle, enhance our role in customers’ lifestyle journeys by elevating existing categories such as Sports and Kids & Family to distinct propositions, and offer personalised inspiration and entertainment. In B2B, Zalando is opening up its logistics infrastructure, software and service capabilities to be a key enabler in the e-commerce business of brands and retailers, regardless of whether it takes place on or off the Zalando platform. In the future we see the B2B growth vector developing into a multi-billion-euro business.

Successfully executing our vision

In the last year, we not only unveiled an updated strategy, we also started executing it to spur growth, further improve profitability and invest in key strategic areas to capture future growth opportunities.

In B2C we added more quality brands and introduced tools that improve our customers’ size recommendations based on their unique body measurements, helping to reduce size-related returns and textile waste. We also expanded our lifestyle offerings with strong growth in Sports, Kids & Family, Designer and Beauty, and rolled out our AI-powered Zalando Assistant to more markets, making it easier for more customers to navigate our assortment using their own words or fashion terms. We further evolved “Stories on Zalando”, the content hub that engages customers around exciting fashion and culture, and developed a trend spotter as a new source of inspiration that shows customers emerging fashion trends in the European fashion capitals.

Customers are at the heart of everything we do, and to reward their loyalty we have evolved our Zalando Plus programme by introducing a points-based system. The new approach, initially tested in Spain, was expanded to France and Austria later in the year. The programme will continue to roll out in additional markets in 2025. In Shenzhen, China’s tech heart, we opened a new complementary technology site, allowing us to leverage local expertise in social commerce and combine it with our deep understanding of the European market to offer European customers personalised inspiration and entertainment.

In B2B, our second growth vector, we successfully scaled our multi-channel fulfilment solution further by adding new markets and sales channels. ZEOS, our multi-channel offering, now serves over 40 partners. British fashion retailer Next has signed an agreement with ZEOS to fulfil most of Next’s online direct-to-consumer business in continental Europe.

ZEOS offers an attractive and growing suite of software and service solutions developed by our in-house engineering teams, along with Tradebyte, our leading marketplace integrator. Tradebyte has expanded its offering, and now provides brands with a comprehensive view of their multi-channel platform businesses. This allows clients to identify growth opportunities, enhance operational efficiency, maximise profitability and optimise marketing strategies — all through a single interface.

Accelerating growth, improving profitability and investing to create long term value

Through these initiatives, in 2024 we already demonstrated that we can deliver in terms of our strategy and growth ambitions. We accelerated our growth in both revenue and active customers throughout the year and exceeded our initial 2024 financial guidance. We are well-positioned for the months ahead, and 2025 will be defined by accelerating the execution of our strategy and further delivering on our growth ambitions.

At the end of 2024, we further doubled down on our strategy to build a pan-European ecosystem by announcing our intention to acquire the Hamburg-based e-commerce company ABOUT YOU. The transaction will bring together two founder-led teams with a strong cultural fit and entrepreneurial track record, and highly complementary capabilities. The proposed deal is driven by the shared goal of both companies to redefine fashion and lifestyle shopping by creating the best possible experience for customers and partners. We are excited about how — once the deal is approved and closed, expected in summer 2025 — we will together be able to provide an even better offering to our customers in both B2C and B2B.

Working together for a bright future

Finally, it would be remiss of us not to mention our employees. Their dedication and enthusiasm are the driving force behind our achievements. The entire Zalando team, spanning 140 nations from all over the world, consistently demonstrate their unwavering passion, drive and determination.

We would also like to thank you, our shareholders, for your continued support and partnership.

The Zalando management board is confident about the opportunities ahead, and we look forward to executing our shared vision for the company’s future success.

Berlin, 5 March 2025

Robert Gentz, David Schröder, David Schneider, Dr Astrid Arndt