Z A L A N D O

C O N V E N I E N C E

C A P I T A L M A R K E T S D A Y 2 0 1 7

D A V I D S C H R Ö D E R

M A S O O D C H O U D H R Y

1 9 - 0 6 - 2 0 1 7

2

T A B L E O F

C O N T E N T S

1. WHERE WE WANT TO GO

2. HOW WE WILL MAKE IT HAPPEN

3. WHICH ROLE MÖNCHENGLADBACH PLAYS

4. Q&A

3

O U R M I S S I O N AS Z AL A N D O O P E R AT I O N S I S T O B E C O M E

T H E B E S T F U L F I L M E N T P AR T N E R F O R F AS H I O N I N E U R O P E

OPERATIONAL

EXCELLENCE

CUSTOMER

SATISFACTION

SUSTAINABLE

GROWTH

4

Z AL AN D O C O N V E N I E N C E S U P P O R T S T H E

Z AL AN D O P L AT F O R M W I T H T H R E E K E Y S E R V I C E S

• Payment processing

• Payment customer care

• Dunning & collection

• Fraud prevention

• Receivables accounting

• Deferred payments offering

P A Y M E N T S L O G I S T I C S C U S T O M E R C A R E

• Warehouse logistics

(inbound, storage, parcel

outbound)

• Returns handling

• Transportation & shipping

• Network planning

• Warehouse engineering

• Mail & phone support

• Chat

• Social Media

• Self-help / Smart FAQ

5

Satisfaction in % Satisfaction in % Satisfaction in %

Note: Customer satisfaction in percent of customers evaluating service as 1 or 2 on a scale of 1 to 5 with 1 = very satisfied , 5 = not satisfied.(1) YoY as per Dec-2016.

C L E AR C U S T O M E R C E N T R I C I T Y F O C U S L E AD S T O

S I G N I F I C AN T I N C R E AS E I N C U S T O M E R S AT I S F AC T I O N

P A Y M E N T L O G I S T I C S C U S T O M E R C A R E

2 0 1 4 2 0 1 6 2 0 1 4 2 0 1 6 2 0 1 4 2 0 1 6

+ 4 % + 4 % + 1 1 %

NPS at all-

time high

+5 points1

CAGR

6

Number of transactions in m Number of shipments in m Number of contacts in m

C O N T I N U E D C AP AC I T Y E X P AN S I O N

S U P P O R T S B U S I N E S S G R O W T H

P A Y M E N T L O G I S T I C S C U S T O M E R C A R E

2 0 1 4 2 0 1 6 2 0 1 4 2 0 1 6 2 0 1 4 2 0 1 6

+ 3 8 % + 2 8 % + 1 7 %

CAGR

7

Total Payment costs in € / order Logistics costs in € / item Contact rate in % of orders

C O N T I N U O U S I M P R O V E M E N T C U L T U R E

D R I V E S O P E R AT I O N AL E X C E L L E N C E

P A Y M E N T L O G I S T I C S C U S T O M E R C A R E

2 0 1 4 2 0 1 6 2 0 1 4 2 0 1 6 2 0 1 4 2 0 1 6

- 1 0 % - 3 % - 8 %

CAGR

8

T A B L E O F

C O N T E N T S

1. WHERE WE WANT TO GO

2. HOW WE WILL MAKE IT HAPPEN

3. WHICH ROLE MÖNCHENGLADBACH PLAYS

4. Q&A

9

LOGIST ICS NETWORK EXPANSION

10

ONLINE RETAILERS UNDER PRESSURE

FROM GENERATION CONSUMERS FOR

CHEAPER AND MORE CONVENIENT

FULFILMENT OPTIONS

Note: (1) Source: PWC, „Total Retail Survey“ 2016, n=22.618, Q: „Thinking of your favorite online retailer, why do you shop h ere?“

T H E E U R O P E AN E N V I R O N M E N T I S C O N T I N U AL L Y C H AN G I N G

THE CUSTOMER IS BECOMING

MORE AND MORE DEMANDING

THE MARKET IS BECOMING MORE AND

MORE INNOVATIVE AND COMPETITIVE

“ THESE SIX-WHEELED DELIVERY

ROBOTS ARE STARTING TRIALS IN

EUROPE

ECOMMERCE EUROPE SHAPES THE

FUTURE OF CROSS-BORDER PARCEL

DELIVERY

AMAZON IS LOOKING TO EXPAND ITS

TWO-HOUR PRIME NOW DELIVERY

SERVICE IN EUROPE BY ESTABLISHING

1,300 NEW WAREHOUSES

FAST DELIVERIES TO GROW BY 40

PERCENT YEAR-ON-YEAR UNTIL 2025,

SAYS NEW STUDIE

THE ASOS SUPPLY CHAIN CHARMS THE

MILLENNIAL SHOPPERS

GOOD PRICES

BRAND TRUST

BROAD AND EXCLUSIVE

SELECTION

CONVENIENT RETURNS

FAST AND RELIABLE DELIVERY

EASY TO USE

IN-STORE AVAILABILITY

CHECKABLE

GREAT LOYALTY PROGRAM

STORE PRICES MATCH ONLINE

PRICES

SUPERIOR CUSTOMER REVIEWS

11

W E W I L L C O N T I N U E T O P L AC E O U R C U S T O M E R S F I R S T AN D W E W I L L

E N AB L E N E W P AR T N E R S T O S C AL E T H E I R B U S I N E S S O N O U R P L AT F O R M

FREE & FASTER

DELIVERY AND RETURNS

PERSONALIZED

CONVENIENCE

OPEN UP OUR

LOGISTIS CAPABILITIES

• Preferred delivery & returns option to

95% of our customers

• Personalized recommendation of

delivery and returns services

• Being able to reach 95% of our

customers within 1-2 days

• Leading returns proposition

• Free 24hr service for good customers

• Provide logistics solutions to help our

partners to scale their business on our

platform in a cost efficient way

• Increase convenience level of Zalando

Partner Program for our customers

MACRO

NETWORK DEVELOPMENT

MICRO

NETWORK DEVELOPMENT

ZALANDO

FULFILLMENT SOLUTIONS

! !!

12

W E AR E E X P AN D I N G O U R L O G I S T I C S O P E R AT I O N S T O A

T R U L Y E U R O P E AN N E T W O R K

EXISTING FOOTPRINT HUB BUILT -OUT

Purpose: Scale, flexibility and process efficiency

Serving majority of our markets (10-15 markets)

High degree of automation

SPOKE BUILT -OUT

Purpose: Reduction of lead times to customers

Serving only local markets (1-3 markets)

Low-medium degree of automation

TOTAL CAPACITY OF ~€8BN IN REVENUES

SZCZECIN HUB

~130,000 m2

Start in autumn ‘17

BRIESELANG HUB

~30,000 m2

Start in 2011

ERFURT HUB

~130,000 m2

Start in 2012

M’GLADBACH HUB

~130,000 m2

Start in 2013

!

MILAN SPOKE

~20,000 m2

Start in 2016

PARIS SPOKE

~20,000 m2

Start in 2017

LAHR HUB

~125,000 m2

Start in 2016

STOCKHOLM SPOKE

Start end of 2017

13

W E C O N T I N U AL L Y S T R I V E T O P R O V I D E E V E N B E T T E R S E R V I C E S

T O O U R C U S T O M E R S AC R O S S E U R O P E

2011 2018

go-live

Brieselang

... 2019

go-live

Moissy (FR),

Brunna (SWE),

Gardno (PL)

Planned extensions

!

Same day reach (LH1 < 2hrs), in % Next day reach (LH1 < 9hrs), in % 2nd day reach (LH1 < 18hrs) in %

1

19 20 22

31

66 69

7972

959292

2017

(1) LH = line-haul

14

W E C O N T I N U AL L Y S T R I V E T O P R O V I D E E V E N B E T T E R S E R V I C E S

T O O U R C U S T O M E R S AC R O S S E U R O P E!!

CUSTOMER NEEDS OUR SERVICE OUR NETWORK

Free Standard

Delivery & Return

Free Delivery

& Return

Reliable

Delivery

Convenient

Delivery &

Return

Fast Delivery

& Return

Express Delivery

Timeslot Delivery

Wish-day Delivery

Pick-up &

Drop-Off Points

Same Day Delivery

&

Return on Demand

Local Delivery

Network

LDN

Carrier,

Express &

Parcel Network

CEP

15

STR ON G FOC U S ON

DEFERRED PAYMENT METHODS

16

W E AL R E AD Y O F F E R A B R O AD V AR I E T Y O F P AY M E N T M E T H O D S . . .

CHEQUE

INVOICE

PREPAYMENT

OVER 20 PAYMENT METHODS

TAILORED TO LOCAL NEEDS

PERSONALIZED OFFERING

17

INVOICE CREDIT CARD

. . . W I T H A S T R O N G F O C U S O N D E F E R R E D P AY M E N T M E T H O D S

CHARGES CUSTOMERS ONLY FOR THE GOODS THEY KEEP AFTER A CERTAIN TIME PERIOD

DEFERRED PAYMENT METHODS

HOW do

you

want

to pay?

WHEN do you want to provide the funds?

payment term creditimmediately

BANK TRANS.

CREDIT CARD

DIRECT DEBIT

PAYPAL

CASH ON DELIVERY

INVOICE INSTALLMENTS

PAYLATER

credit

CREDIT CARD

DIRECT DEBIT

PAYLATER

All funds transferred automatically

Low merchant side risk+Order needs to be paid directly

Large orders require high credit card limits--

+Only pay what you keep

No risk as customer+Hassle of bank transfer

Risky for merchant to offer--

+PAY LATER CREDIT CARD

COMBINES THE BEST OF TWO

WORLDS

FIRST TESTS IN FRANCE SHOW

PROMISING RESULTS

INVOICE

We already offer a strong invoice

product in 9 countries!

18

INTERACTIVE AND SEAMLESS

C U STOMER C ON TA C T

19

W H Y W E C R E AT E D AN I N T E R AC T I V E H E L P AN D C O N T AC T C E N T E R

REDUCE CUSTOMER CARE

Approx. 40% of inquires can be

solved with easy repl ies or

info the customer already has

FULFILL CUSTOMER NEED

Customers of ten search for

answers via search engines

FOCUS ON HIGH VALUE ADD

We want customer care to Focus

its resources on t rue value

add inquir ies

COLLECT & LEVERAGE DATA

Self -help usage data leads to

better insight and categorizat ion

of customer pain -points

20

W H AT W E O F F E R I N O U R H E L P AN D C O N T AC T C E N T E R

Does Zalando refund the

costs for express delivery?

CUSTOMER

QUESTION

1

2

3

21

T A B L E O F

C O N T E N T S

1. WHERE WE WANT TO GO

2. HOW WE WILL MAKE IT HAPPEN

3. WHICH ROLE MÖNCHENGLADBACH PLAYS

4. Q&A

22

Z AL AN D O L O G I S T I C S M Ö N C H E N G L AD B AC H AT A G L AN C E

20kmconveyor

system

~4 years oldoperational since 2013

>2,100employees

New

Bagsorter500.000 bags

130,000m²area of fulfillment center

23

M Ö N C H E N G L AD B AC H H AS AN I M P O R T AN T R O L E W I T H I N O U R N E T W O R K ,

E S P E C I AL L Y F O R W E S T E R N M AR K E T S

LOCATED IN THE MIDDLE OF THE

EU SERVING ALL OUR 15

MARKETS

OUR FIRST ZALANDO

FULFILLMENT SOLUTION

LOCATION, FULFILLING SINCE

02/16

LOCATED IN A HIGH DENSITY

AREA WITH 62 MILLION

INHABITANTS WITHIN A 3 HOUR

DRIVING TIME

HIGHLY AUTOMATED, WITH BAG-

SORTER IN RAMP-UP MODE

24

M Ö N C H E N G L AD B AC H – T H E L AY O U T

Retoure Dock Singe & Multi-Order

Pack Area

Outbound DockReceive Container Buffer

(High Dynamic Storage)

Hall 3 Hall 5Hall 4Hall 1

Picktower Picktower Inbound/ OutboundBagstore/

Bagsorter Outbound

Picktower /

Bagsorter Inbound

PHASE 1: UNITS 1 -3 (66K M ² ) , 2013 PHASE 2: UNITS 4 -5 (44K M ² ) ; 2017

Hall 2

Singe & Multi-Order

Bag Pack AreaInbound Bagsorter

25

M Ö N C H E N G L AD B AC H K E Y P R O C E S S E S

PICKING

SINGLE

PACKINGSORT

(MULTI ONLY)

MULTI

PACKING

SHIPPING

CUSTOMER

TRY ONPOTENTIAL

RETURN

RECEIVE

STOW

GOODS RECEIVE MANAGEMENT

& INBOUND & RETURNS PROCESS

CUSTOMER ORDER

& OUTBOUND PROCESS

CUSTOMER

ORDER

INBOUND

DOCK

26

27

C e r t a i n s t a t e m e n t s i n t h i s c o m m u n i c a t i o n m a y c o n s t i t u t e f o r w a r d l o o k i n g s t a t e m e n t s . T h e s e s t a t e m e n t s a r e b a s e d o n

a s s u m p t i o n s t h a t a r e b e l i e v e d t o b e r e a s o n a b l e a t t h e t i m e t h e y a r e m a d e , a n d a r e s u b j e c t t o s i g n i f i c a n t r i s k s a n d u n c e r t a i n t i e s .

Y o u s h o u l d n o t r e l y o n t h e s e f o r w a r d - l o o k i n g s t a t e m e n t s a s p r e d i c t i o n s o f f u t u r e e v e n t s a n d w e u n d e r t a k e n o o b l i g a t i o n t o

u p d a t e o r r e v i s e t h e s e s t a t e m e n t s . O u r a c t u a l r e s u l t s m a y d i f f e r m a t e r i a l l y a n d a d v e r s e l y f r o m a n y f o r w a r d - l o o k i n g s t a t e m e n t s

d i s c u s s e d o n t h i s c a l l d u e t o a n u m b e r o f f a c t o r s , i n c l u d i n g w i t h o u t l i m i t a t i o n , r i s k s f r o m m a c r o e c o n o m i c d e v e l o p m e n t s , e x t e r n a l

f r a u d , i n e f f i c i e n t p r o c e s s e s a t f u l f i l l m e n t c e n t e r s , i n a c c u r a t e p e r s o n n e l a n d c a p a c i t y f o r e c a s t s f o r f u l f i l l m e n t c e n t e r s , h a z a r d o u s

m a t e r i a l / c o n d i t i o n s i n p r o d u c t i o n w i t h r e g a r d t o p r i v a t e l a b e l s , l a c k o f i n n o v a t i o n c a p a b i l i t i e s , i n a d e q u a t e d a t a s e c u r i t y , l a c k o f

m a r k e t k n o w l e d g e , r i s k o f s t r i k e a n d c h a n g e s i n c o m p e t i t i o n l e v e l s .

D I S C L AI M E R