Zalando’s Marketplace Evolution: Growth, Challenges & The Road Ahead
On March 6, 2025, Zalando released its full-year financial results for 2024, revealing growth in revenue and profitability, but also raising key questions about its marketplace strategy and B2B ambitions. The report naturally focuses on Zalando’s strengths, highlighting a bright future – but do the numbers reveal if you dig deeper? And what do they mean for marketplace people from the fashion industry who rely on Zalando as their key marketplace? Follow me on a Zalando deep dive right into the hidden parts of the fashion giant’s financial report.
Zalando Deep Dive into the Marketplace Numbers
A Change in Reporting—Harder to Compare Marketplace Growth
In FY 2023, Zalando changed its calculation method, making it impossible to compare marketplace share before and after 2023. Now, revenues are separated into B2C (Retail Business, Partner Business (Partner Program (PP) and Connected Retail (CR)) and Zalando Marketing Services (ZMS)) and B2B (ZEOS, ZFS, Tradebyte, Services), making it difficult to assess how much of Zalando’s growth is actually marketplace-driven.
A Profitable B2C Business – But Not Driven by Marketplace Growth?
While Zalando’s B2C segment grew in 2024, profitability improved even more significantly:
- B2C adjusted EBIT surged from €311M (3.3% margin) in 2023 to €489M (5.1% margin) in 2024.
- Gross margin increased to 43.5%, driven by higher retail profitability and better operational efficiencies.
However, the key question remains: Is this success coming from a growing marketplace model, or is Zalando still prioritizing its retail-driven business?
How Big is Zalando’s Partner Business Really?
Zalando has big ambitions for its Partner Business, positioning it as the core of its marketplace evolution. But is it actually moving in that direction?
- In 2023, Zalando stated that its Partner Business GMV share was roughly 34%, with a target of 40-50% by 2028.
- In 2024, this only grew slightly to 34.3% (2023: 33.6%), showing slow marketplace expansion.
- GMV from the Partner Business grew by just 6.7% YoY, raising concerns about whether the 40-50% target is achievable.
A Curated Marketplace – Or a Closed Club?
Zalando is tightening control over its brand partnerships rather than expanding its marketplace.
- In July 2024, Zalando removed numerous brands, citing vague criteria related to brand awareness and assortment quality.
- In December 2024 and May 2025, more brand removals are planned, affecting both new and existing partners.
- Brand approval is increasingly difficult, making it harder for brands to enter Zalando’s marketplace.
This raises concerns about whether Zalando’s marketplace model is truly scaling or if it remains a controlled, closed ecosystem where only selected brands can participate.
The About You Acquisition: A Marketplace Power Move or a Risky Merger?
In December 2024, Zalando announced its largest acquisition ever—a €1 billion+ takeover of About You, set to finalize in summer 2025.
Zalando claims both platforms will remain independent for at least three years, but:
- 30% of their assortments already overlap.
- Logistics, tech, and finance teams are being merged, signaling deeper integration.
- SCAYLE (About You’s B2B SaaS solution) will be integrated into Zalando’s B2B segment from summer 2025.
Impact on Brands: What Will Change?
1. Retail Business: Budget Allocation & Pricing Control
For brands selling wholesale to both Zalando and About You, key concerns include:
- Will wholesale terms merge, forcing brands to operate under the same conditions on both platforms?
- How will budget negotiations change if both platforms align pricing and assortment expectations?
- Will Zalando use its data advantage to negotiate tougher terms for brands?
2. Marketplace Sellers: Loss of Flexibility & Increased Dependency
For brands using the partner model on both platforms, the changes raise critical questions:
- Will marketplace fees & T&Cs be standardized across both platforms?
- If Zalando harmonizes pricing or assortment, will brands lose control over their multi-platform strategies?
- What if Zalando applies its aggressive brand removal strategy to About You?
B2C Growth: Zalando’s Platform Expansion
Zalando is expanding in three key areas:
- New Markets: Launching in Portugal, Greece, and Bulgaria, growing to 28 countries.
- New Brand Onboarding: Adding Versace Menswear, Marine Serre, Fjällräven, and On to strengthen its premium & sports assortment.
- Beauty & Lounge Expansion:
- Beauty now expanded to Spain and Finland, reaching 13 markets.
- Lounge by Zalando expands to five more countries, reaching 22 markets.
Beyond geographic expansion, Zalando is also investing in:
- More personalized shopping experiences and content-driven fashion storytelling.
- Stronger loyalty programs to increase customer retention.
B2B Growth & Challenges
Zalando continues to expand its B2B segment, with ZEOS (Zalando E-commerce Operating System) positioned as a multi-channel logistics solution. While ZEOS now supports 10 external sales channels, including About You, Otto, ASOS, and Amazon, adoption remains slow.
Despite onboarding 40+ partners, including Pepe Jeans and NEXT, growth has fallen short of expectations. Major brands already have established logistics solutions, while mid-sized brands—its key target—are hesitant due to high costs and dependency risks.
ZFS (Zalando Fulfillment Solutions) remains the primary B2B revenue driver, offering cost-efficient fulfillment for Zalando Marketplace orders, whereas ZEOS struggles with higher pricing and limited scalability.
Financially, B2B revenue grew 11.5% YoY to €953M, but B2B EBIT dropped from €39M to €23M, with margins falling to just 2.4%. With SCAYLE (About You’s SaaS business) set to be integrated in summer 2025, Zalando needs to prove that B2B can become a scalable and profitable growth driver rather than a costly side project.
Outlook – What’s Next?
2025 Growth Expectations
What will our Zalando deep dive for 2025 look like? Zalando projects GMV and revenue growth of 4-9% in 2025, with adjusted EBIT expected to rise to €530M – €590M. Despite macroeconomic challenges, the company remains focused on scaling its platform ecosystem across both B2C and B2B segments.
Finalizing the About You Acquisition
- The full integration of SCAYLE into Zalando’s B2B segment is planned for summer 2025.
- While About You and Zalando will operate separately for now, internal departments like logistics, tech, and finance are already merging, signaling deeper structural integration.
- How Zalando manages the coexistence of both platforms will determine the long-term impact of this acquisition.
B2B Expansion & Challenges
- ZEOS growth remains a key focus, but adoption has been slower than expected. Will 2025 bring more mid-sized brands into the system, or will ZEOS remain a niche logistics solution for a select few?
- B2B margin recovery is essential—Zalando aims for 10-13% profitability, but with margins dropping to 2.4% in 2024, it remains uncertain how quickly this can be achieved.
With marketplace expansion, new logistics solutions, and a major acquisition in progress, 2025 will be a defining year for Zalando’s position as Europe’s leading fashion platform.
🎙️ Want deeper insights? Tune in to Episode 103 of our Podcast “Let’s Talk Marketplace”, where we break down Zalando’s B2B growth, challenges, and what’s next for its logistics expansion.