Zalando: Online fashion giant reports strong growth after push into AI
Online shopping giant Zalando reported strong growth in the second quarter as it leaned into artificial intelligence (AI) in search of a bigger share of the e-commerce fashion and lifestyle market.
Adjusted earnings before interest and taxes (EBIT) rose to €171.6m (£147.3m), an 18 per cent rise from £144.8m year on year in the second quarter of 2024.
The German-based retailer operates two main arms: consumer sales business-to-business e-commerce solutions.
It focused on enabling artificial intelligence for consumers during the period , using GenAI to “lower costs [and] increase customer engagement”.
In 2023, Zalando launched the Zalando Assistant, “powered by the large language models of AI research and deployment company OpenAI,” the company said.
The rise in use of AI comes after the company said last year it would axe hundreds of job roles across its team, after an over-hiring spree during the pandemic and a challenging economic climate has rattled the business.
Revenue in the business-to-consumer segment rose 2.8 per cent to 2.4 billion euros in the second quarter compared with a year ago.
The number of active customers grew by 300,000 to 49.8m from the end of the first quarter of 2024, the company said.
Zalando reported business-to-business growth of 10.3 per cent after Zalando expanded its infrastructure, software and service capabilities.
“Our ecosystem strategy empowers us to cover a larger share of the fashion and lifestyle e-commerce market, and the positive response from customers and partners in the second quarter validates our vision,” said Robert Gentz, Zalando co-chief executive.
“Our business-to-consumer customers are excited by the quality brands we are adding, spending time with our new digital tools and content, and embracing our expanding lifestyle offerings in areas such as sports, designer and beauty.
We also recorded double-digit growth in business-to-business, demonstrating that both our growth vectors are delivering,” he added.
AI has brought rapid change to the e-commerce industry, with personalized products recommendations, automation and pricing optimization all key developments in the industry.
Zalando kept it full-year guidance unchanged, with EBIT expected to be between €380m and €450m.
Its share price rose by nearly three per cent in early trades on the German Stock Exchange.