Following the news that Zalando is acquiring About You for €1.13bn: Pippa Stephens, senior apparel analyst at GlobalData, a leading data and analytics company, offers her view: “Zalando’s acquisition of online rival About You will allow it to increase its hold of the European online apparel market. It has faced increased competition from About You over the past few years, as while it is still a much smaller player, the two online pureplays serve similar regions and customer demographics, as well as offering a comparable selection of third-party brands. That being said, after outperforming for several years due to its rapid expansion into new markets, About You’s growth has notably slowed since 2023 due to weak consumer sentiment and heightened competition from ultra-fast fashion players like Shein and Temu. Therefore, Zalando will need to work on improving the retailer’s desirability and customer engagement in order to bring it back to full strength.
“While the two retailers will continue to operate through separate websites and maintain their own unique identity, the acquisition will have the greatest benefit on their business-to-business (B2B) segments and backend operations. About You’s SCAYLE e-commerce software, which it sells to other retailers such as Harrods and Deichmann, has been extremely fast-growing, and will complement Zalando’s own B2B offering, allowing it to become a powerhouse in this area. With consumers increasingly looking for faster and more convenient payment and delivery options, the convergence of both companies’ expertise and technologies will help to make them more competitive in these respects as well.
“Zalando has emphasized the benefits of this acquisition by reiterating its medium-term outlook for the combined group, with both GMV and revenue anticipated to rise at a 5-year CAGR of between 5% and 10% out to 2028. To achieve this, both retailers would need to see a significant improvement on current trading, with Zalando and About You’s revenue in their most recent quarters increasing just 5.0% and 2.4% respectively. GlobalData also only forecasts the total European online apparel market to experience a CAGR of 3.7% from 2023 to 2028, so reaching its target may prove a challenge for Zalando.”
