How to achieve growth in e-commerce ?

⏐Growth hacking⏐ Zalando ⏐ Asos ⏐Case study

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Growth issues in e-commerce

•  Growth is a very important strategic issue –  Break-even point requires high volume (fixed costs issue) –  Volume increases profitability by enabling purchasing

price reduction (negotiating power gross margin)

•  How to achieve growth ? –  Diversification (i.e. catalog extension) –  Internationalization

•  From local to Europe •  Global from scratch

–  Economy of scale generation –  Marketplace

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Amazon growth model

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Source: Amazon

A european strategy Source: all data from Zalando public financial statements

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Zalando Business Model

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Zalando Business Model

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Web site

Mobile (40% MAU)

Shop (Berlin)

Private Label

Online marketing

Data-driven

Sourcing

IT platform

Warehouse

Brand

Intl payment platform

Third party fashion brands

(data driven relations)

11 logisitics

partners

Marketing costs 13,6% Fulfillment costs 23,4%

14 european countries Women

Men

150 000 styles

1 500 brands Local Global Fast

Private Label

High Avaibility Better selection

Free delivery &

returns

Personalized shopping

experience

Gross Margin 40 to 60 % Net margin 1,2 %

Steps in business development

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© H. Isaac Source: Zalando

European growth strategy

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© H. Isaac Source: Zalando

Market size⏐ Brand awareness

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Zalando Key metrics

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53,2% 41,5%

+11,5%

37%

Increased Brand awareness & quality of execution increase

Repeat purchase

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Economy of scale generation⏐1

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© H. Isaac Source: Zalando

Economy of scale generation⏐2

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© H. Isaac Source: Zalando

Marketing costs ⏐Loyalty

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Group EBIT Margin

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Zalando Key Success Factors

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© H. Isaac Source: Zalando

Zalando Growth’s vision

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© H. Isaac Source: Zalando

Zalando: Concluding remarks

•  High level of economy of scale –  Fulfillment capacities –  IT platform

•  Diversification in assortment •  European markets extension •  Strong branding that reduces Customer cost of

acquisition •  Quality in operations execution that drives customer

loyalty Ø High level of scalability

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ASOS Business Model

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A global strategy Source: all data from Asos public financial statements

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A worldwide strategy

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Source: ASOS

ASOS Business Model

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9 Web sites

Mobile (46% MAU)

Sourcing

Warehouse

800 Third party brands

Tmall (China)

Marketing costs 5,7% Fulfillment costs 22%

Worldwide (200

countries) 20

somethings Women

75 000 items Newness

Gross Margin 49,5% Net margin 4%

Private Label (50%)

As seen On me Recommendations

Rewards Personal stylist

ASOS Internationalization

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Source: Javelin Group, Planning for Europe, eCommerce futures, 5th February, 2014

A worldwide expansion

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Source: ASOS

International strategy

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Source: Javelin Group, Planning for Europe, eCommerce futures, 5th February, 2014

A difficult path to master operational costs

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Source: ASOS

ASOS Key metrics

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Source: ASOS

ASOS Vison of Growth strategy

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Source: ASOS

Growth : audience monetization

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ASOS: concluding remarks

•  From UK to Worldwide sales •  Categories extension •  Opening China market with Tmall

•  Marketplace opening

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