Zalando expands Zalando Prive and takes it to Spain

Zalando faces Privalia in its home. The German e-commerce group, one of the biggest pure players of fashion in Europe, has just released in Spain Zalando Privé, its platform for stocks sale exhibition. Equally to Vente Privee, promotor of this model in Europe, Showroomprive or Privalia, the web will offer discounts for a few days only of brands such as Adidas and Pepe Jeans, according to what the German group has told to Modaes.es

Zalando’s line of business took its first steps in 2010 under the name Zalando Lounge. It was the year in which the model exploded in Spain, with the arrival of players such as Showroomprive (VentePrivee had been operating ever since 200/) and Amazon’s acquisition of BuyVIP.

After a year operating in Germany and Austria, Zalando’s online outlet reached France, the cradle of this model around Europe, with the name Zalando Privé. Today, the platform is present in the Netherlands, Belgium, Finland, Denmark, Sweden, Switzerland, the United Kingdom, Italy and Poland.

Zalando Privé took its first steps in 2010 and is now present in thirteen countries

Why Spain? Martin Rost, vice-president of Zalando Lounge and Zalando Privé, explains that the “huge sensitivity” of Spanish people regarding fashion and the penetration of mobile phones in the country, one of the channels in which the platform is dedicating itself the most to, are two of the reasons why the group has decided to introduce the model in the country.

In total, Zalando Privé and Zalando Lounge have more than fifteen million registered users, and subscribing is not mandatory. The platform, which operates through the web as a mobile app, distributes 2,500 brands with discounts up to 75% and includes in its offer firms such as Adidas, Pepe Jeans or Desigual. The company is nurtured both from the stock of Zalando as from the brands themselves, and works with consignment stocking and buying firm, depending on the campaign.

Sales and promotions last from three to five days, and deliveries take from one to two weeks and cost 3.9 euros. Returns, on the other hand, have a fourteen days term.

The company irrupts into this segment in Spain at a time in which the model is undergoing a transformation

“That’s the price to pay for having bigger discounts than those you find, on average, in the street”, claims Rost. “They are different proportions of business; we offer a bigger discount but for a cost”, says the executive.

Orders are carried out from several platforms. Zalando Privé has its own warehouse outside the city of Berlin but leans on other logistics structures owned by its parent company, which has platforms all around the continent. The closest one to Spain is the one located in Stradella (Italy).

Zalando Privé enters Spain at a time in which the model of online outlets is under the spotlight, precisely because some of these differences in comparison to full price pure players (Zalando, for instance, became popular due to its policy of returns in one hundred days).

Martin Rost, vice-president of Zalando Lounge and Zalando Privé, claims that there is still a demand for the valuable proposal of online outlets, although admits that it is quite challenging.

Many players have reoriented their model, changing it or launching their own marketplaces. “The model is definitely not dead; perhaps the model of purchasing clubs is more challenging for companies that operate by themselves, but we can lean on the resources of Zalando and that gives us a great advantage”.

In Spain, the sector has been concentrated due to the disappearance of platforms such as BuyVIP and the acquisitions of huge groups like Ofertix, which was joined by three of its rivals: LetsBonus, Groupalia and Offerum.

Although the sector’s top M&A was that of the French group Vente Privee, acquiring in 2016 the Spanish Privalia for 444.1 million euros, the equivalent of 24 times its gross operating product (EBITDA). Today, the Vente Privee-Privalia group reigns in the so-called flash sales sector around the Spanish market, followed closely by the also French Showroomprive.

Rost states that competitivity does not scare him, because they, as Zalando Prive, consider themselves as fashion specialists. “We are not afraid of other players -states the executive-; we operate differently: we are committed and focused on the fashion business: sizes, delivery experience, everything. It is all thought for fashion”.

Spain, under Zalando’s spotlight

Zalando has a close relationship with the Spanish market. The company, which has several Spanish executives in its team, operates in an office in Elche (Valencia, Spain) destined for sourcing of its directly operated brands, grouped together in the zLabels division.

The group’s e-commerce platform landed in the country in 2012, piloted by a team of Spanish people, and became the second e-commerce to revenue the most in the country, according to a research carried out by the sectorial fair Eshow titled 300 Ecommerce en España.

Zalando Privé operates both with the stock of full price platforms as with the stock of brands

The report, standing El Corte Inglés out as the main online commerce in base to its revenue, claims that Zalando’s sales in the Spanish market ascended up to 202.1 million euros.

Zalando ended the first nine months of the fiscal year with a revenue of 3.72 billion euros, 18% more than in the same period last year. The group’s net profit grew to 1.55 billion euros, going up by 14.5%.