Zalando Overview 2014

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Zalando – Europe’s leading online fashion destination May 22, 2014 Zalando AG
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Zalando Overview 2014

Transcript of Zalando Overview 2014

  • 1. Zalando Europes leading online fashion destination May 22, 2014 Zalando AG
  • 2. 1 Why are we here? Customer value: We believe online technology offers superior ways to the customers to shop fashion in terms of convenience, selection, personalization and inspiration. Proven model: When we started, our friends asked us: Who would buy shoes online? Today they ask us: Can I get another friendship-voucher? Mega trend: Almost everyone growing up in Europe today is a digital native. In the future, the majority of fashion purchases will be inspired and made online. Disruptive company: Over the last five years we have changed the way Europeans shop fashion. But when we look at Zalando today we think it still is small compared to what it could be. We are still at the beginning of our journey! Great team: We are a group of young, entrepreneurial and ambitious people. We want to continue to disrupt and shape the fashion industry, and to offer our customers the worlds best online fashion experience.
  • 3. 2 2.0bn run-rate revenue (1) at record breaking speed 332m visits in Q114 ~38% from mobile devices at end of Q114 13.5m active customers (2) ~89% brand awareness (3) 150,000+ styles 1,500+ brands Zalando at a glance (1) Annualised Q1 2014 revenue. (2) Active customers have shopped at Zalando at least once during the past 12 months. (3) Countries with Zalando shop launched before 2012. Zalando survey March 2014.
  • 4. Zalandos key milestones 3 2008/09 Building Germanys online leader in shoes Broad product selection (no discount model), convenient shopping Fast brand building 2010 Category expansion Expansion into other fashion categories (clothing, sports, accessories) Expansion into private label 2011/12 Geographic expansion Presence in 15 markets reaching more than 400m people (1) Market leader in online fashion retail in majority of served countries 2013/14 Operational excellence and innovation Growth investments in technology and logistics to support future growth Front-end innovation to drive customer activity (1) Luxembourg followed as 15th countryy in 2013.
  • 5. 4 Unwrapping Zalando whats inside Online fashion is a massive and highly attractive market opportunity1 Zalando is in the pole position to win the online fashion market in Europe2 Significant top-line growth at scale with history of profitability in core DACH region3 Visionary founder-led team with proven track record of scaling at speed4
  • 6. 5 e-Commerce fashion Europe Largest online consumer product category with highly attractive margin profile Early on the curve of online adaption Europeans have high fashion spending per capita and high density of fashion spending Early on the curve of online penetration Intersection of attractive category and geographic market Targeting very sizable market opportunity for long-term growth Zalandos sweet spot Online fashion is a massive and highly attractive market opportunity 1
  • 7. 6 Unwrapping Zalando whats inside Online fashion is a massive and highly attractive market opportunity1 Zalando is in the pole position to win the online fashion market in Europe2 Significant top-line growth at scale with history of profitability in core DACH region3 Visionary founder-led team with proven track record of scaling at speed4 Zalando is the online fashion leader in Europe by brand awareness and website visitors Scale enables us to deliver the best value to customers and brands Highly localised operations in 15 regional businesses Integration of fashion, technology and operations creates disruptive business model
  • 8. Zalando H&M Bonprix Myntra Nike Asos Inditex LaRedoute Zappos Dafiti Spartoo Sarenza Yoox Net-a-Porter 7 Zalando is the online fashion leader in Europe by brand awareness and website visitors (Relative position by un-aided brand awareness (1)) Strong brand driving top-of-mind awarenessMost visited fashion website outside China 2 Source: Zalando survey March 2013 (right), ComScore (left). (1) Relative position relative to following competitor. Simple average of relative positions across markets assumed. (2) Poland and Netherlands (survey not conducted for UK and Belgium on an ongoing basis). 1.4x (Global Online Retail Websites Worldwide Unique Visitors, 2013) 2.4x 2.3x 1.6x 1.2x Southern Europe DACH Nordics Europe Other (2)
  • 9. 8 Broad selection of brands and styles Inspiration and emotional engagement Fast delivery and customer support Mobile experience Significant economies of scale More data leading to better insight Leverage in key areas: Marketing bidding Purchasing Logistics Access to 400 million Europeans Zalando as strategic partner to lead brands in online age Trusted brand experience Not a discount model Customers (>13.5m active customers) Brands (>1,500 brands) Scale enables us to deliver the best value to customers and brands Creating a compelling customer experience Helping brands to win online 2 Generating scale driven network effects (1) Annualised Q1 2014 revenue. Zalando Scale (2bn run-rate revenue (1))
  • 10. Local payment methods: InvoicePrepayment Highly localised operations in 15 regional businesses Multi-lingual: Multi-currency: Local logistics partners: 12 Languages 7 Currencies 2 Local brands: Hundreds of local brands Over 20 methods Over 12 partners Multi-country: 15 Countries GermanyFrance ItalyAustria Belgium Denmark Finland Luxembourg Netherlands UKSwitzerlandSwedenSpainPolandNorway 9
  • 11. 10 Zalando dimensions Customer experience Successful integration of fashion, technology and operations creates disruptive business model 2 Brand & Customer Base Online & Mobile Operations Fashion Technology & Big Data
  • 12. 11 89%Zalando brand awareness in countries with Zalando shop launched before 2012 74%Zalando brand awareness in countries with Zalando shop launched in 2012 High brand awareness across markets (1) (1) Zalando March 2014 survey. (2) Excluding U.K (survey not conducted on an ongoing basis). (3) Excluding Belgium (survey not conducted on an ongoing basis). (4) Active customers have shopped at Zalando at least once during the past 12 months. Rapid growth in visitors Zalando is the go-to online fashion destination in Europe Rapid growth in active customers (4) 73 332 Q1'11 Q1'14 2.5 13.5 Q1'11 Q1'14 4.5x 5.4x (2) (3) In millions In millions Brand & Customer Base Online & Mobile Operations Fashion Technology & Big Data
  • 13. 12Source: Webtrekk. (1) Mobile is defined as tablets, mobile site and apps. (2) Textilwirtschaft (5.9.2014): Mobile-Studie: Zalando bei Tablets vorn Mobile is critical for driving: Anywhere, anytime access Incremental engagement & transactions In store comparison #2 lifestyle app on iOS store in Germany Best tablet site amongst fashion sites TextilWirtschaft (2) 4-Star user rating on iOS store in Germany Zalando is successfully riding the mobile wave Mobile share of Zalando traffic (1) App 1.0 Zalando.de first m.site App 3.0 201320122011 2014 End of Q114 38% Brand & Customer Base Online & Mobile Operations Fashion Technology & Big Data
  • 14. 13 150,000+ styles Local relevant brands Large global brands Zalando has created a go-to fashion destination with a broad and compelling offer Brand & Customer Base Online & Mobile Operations Fashion Technology & Big Data Private labels Fast fashion brands1,500+ brands Partner program Higher availability Better selection
  • 15. B MG EF Erfurt 120,000 sq.m. 14Note: Brieselang, Erfurt and Mnchengladbach represent Zalandos in-house operations, another warehouse in Grobeeren is operated by a service provider and not displayed. Grobeeren is expected to ramp-down / close by year-end. Centralised distribution from the center of Europe Total >250,000 sq.m. combined capacity Custom-tailored and semi-automated warehouses Capital-light investments through leasing of building Recent investments in logistic infrastructure are starting to pay off >50% of population and >80% of customers within radius of 750km (= 9 hour drive) from Erfurt Brieselang 30,000 sq.m. Mnchengladbach 75,000 sq.m. (+45,000 sq.m. expansion ongoing) Brand & Customer Base Online & Mobile Operations Fashion Technology & Big Data
  • 16. 15 Demand model Marketing vs. discount Cross-sell recommen- dation Payment option steering Return forecast Order forecast All business processes supported by best in class in-house technology and big data solutions Strategic ownership of technology platform Consistent use of big data Brand & Customer Base Online & Mobile Operations Fashion Technology & Big Data Examples 400+ IT professionals Plus 60+ data scientists
  • 17. 16 Unwrapping Zalando whats inside Online fashion is a massive and highly attractive market opportunity1 Zalando is in the pole position to win the online fashion market in Europe2 3 Visionary founder-led team with proven track record of scaling at speed4 Significant top-line growth at scale with history of profitability in core DACH region
  • 18. 17 Zalando has shown strong growth, reaching 2bn run-rate (1) after 5 years 142 377 773 1,056 6 2009 1 country 2010 3 countries 2011 7 countries (2) DACH = Germany, Austria, Switzerland. 2009: Only Germany. 2010: Added Netherlands and France. 223 284 Q114 15 countries 2012 14 countries 2013 15 countries Q113 14 countries 2011 Added Italy, U.K., Austria and Switzerland. 2012 Added Finland, Norway, Sweden, Belgium, Spain, Poland and Denmark. 2013 Launch of Zalando Luxembourg in November 2013 operated through Zalando Belgium. 3 1,159 510 154 6 372 +35% +129m 501 +28% +61m +45% +68m (1) Annualised Q1 2014 revenue. DACH (2) in millions Revenue development 1,762
  • 19. 18 20122011 (1) DACH = Germany, Austria, Switzerland. 2010 -15.0% -11.7% -7.2% -6.5% 2013 Q1 2014A and 2014E Track record of profitability in core DACH region with significant margin upside 3 percent Group EBIT margin development Group EBIT margin improved significantly year-on-year in Q114 Higher fulfillment productivity Increased marketing efficiency Good start into spring/summer season Q1 14 trends underline our plan to take a significant step toward, but not quite reach, EBIT break even at Group level in FY2014 Negative margins in DACH(1) due to fast brand building & scaling DACH breakeven as business model matures
  • 20. 19 Unwrapping Zalando whats inside Online fashion is a massive and highly attractive market opportunity1 Zalando is in the pole position to win the online fashion market in Europe2 Significant top-line growth at scale with history of profitability in core DACH region3 Visionary founder-led team with proven track record of scaling at speed4
  • 21. 20 Management Board David Schneider Zalando as a fashion company Robert Gentz Zalando as an online company Rubin Ritter Zalando as a process machine Management Board supported by strong second and third level management team Visionary founder-led team with proven track record and well capitalised business Anders Holch Povlsen Equity shareholder base (1) (1) Shareholder structure includes: Investment AB Kinnevik: 36.5%, European Founders Found: 17%, Anders Holch Povlsen: 10%. 4 Zalando is well capitalized: Net cash position >350m at the end of 2013
  • 22. 21 We want to provide the best online fashion experience Customer want more Innovate the customer experience Win in all contexts Thinking in usage situations Strategic brand partnerships Storytelling, Smart Data, etc. Desktop during the day Tablet in the evening Smartphone in the morning Advice and inspiration Process innovations Social shopping experience Relevant recommendations
  • 23. 22 Disclaimer This presentation and its contents may not, in whole or in part, be reproduced, redistributed, published or passed on to any other person by the recipient. The information in this presentation has not been independently verified. No representation or warranty, express or implied, is made as to the accuracy or completeness of the presentation and the information contained herein and no reliance should be placed on such information. No responsibility is accepted for any liability for any loss howsoever arising, directly or indirectly, from this presentation or its contents.