Financial Comparison Amazon and Zalando

UNIVERSITY OF ILLINOIS MBA

HIGH ENGAGEMENT TEAM ASSIGNMENT 1

1. Provide a brief company background including a description of the products, services, divisions, number of employees, and other information you may find relevant.

In 2008, building upon the success of Zappos in US and extensive market research, Zalando is founded in Berlin as an e-commerce platform for the German market, focused on shoes. Its first advertisements promoted the idea of free shipping and free exchange if the merchandise did not fit. By reducing the risk perception and offering competitive prices, it has gained the trust of the market and expanded to cover sports-wear and general fashion items.

Since then, Zalando expanded in 15 countries in Europe with spin-offs and subsidiary companies. 2014 marked the year of the IPO, ZLDO.F on the German Stock Exchange, while in 2015 the stock was included in the MDAX index. 2014 is also the first year to register a profit (the numbers have been red and the company relied on state subsidies before that date).

Zalando's success builds on three main pillars: Fashion, Technology and Operations. To these it adds competencies that are spread across Europe: with Germany at the core of the company, technology hubs in Dublin (Ireland) and Helsinki (Finland), and operations in key logistics potions across Europe (3 physical outlets and 7 distribution centers). Zalando boosts itself by sustaining that any customer is only a 9-hour drive away from one of their distribution centers.

The company focuses on four strategic areas: Consumer Products, Brand and merchant Products, Intermediary Products, and Core Capabilities. The company does not only cater for the needs of consumers, but also serves brands, merchants and other stakeholders with the same platform.

Around 13,000 employees are currently working for Zalando. The company registered in 2015 89,6 million euro in operating income and 2,958 billion in revenue. The Zalando Shop currently offers clothing, shoes and accessories for women, men and children, with products from a world of more than 1500 brands, including global and local brands and 15 private labels. Lately it has expanded to home items and examines with close attention the home furniture market. The shop is tailored to country-specific customer preferences. The end customers are promised the best prices and discounts, thus easy ways to access fashion.

The ‘Zalando Lounge” was proposed as an outlet version of the online store, but with its own philosophy: time constraint discounts for batches of fashion labels that vary every day. This side of the platform feeds into the addition of any shopaholic and ensures customers "stay tuned".

It is no wonder that the numbers add up: in 2015 over 17.8 million active customers placed an average of 3.1 orders through the website or apps.

2.  Provide the same information in 1. for the competitor(s) that you chose to analyze.