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What Is Zalando SE? We Explain Here

David Schneider and Robert Gentz launched Zalando in 2008, and it now has around 49 million active users across 25 European nations. Zalando operates in a number of different business sectors, including multi-brand online shopping, the shopping club Zalando Lounge, stores in 11 German cities, the consultancy service Zalon, as well as logistics and marketing services for retailers.

Zalando links more than 7,000 physical and mortar stores to the online fashion platform through the Connected Retail initiative. With almost 17,000 employees, Zalando made 10.35 billion euros in revenue in 2021.

Robert Gentz and David Schneider started Zalando in Berlin in 2008 with funding provided by the three Samwer brothers. Gentz, Schneider, and Oliver Samwer became friends while attending the Otto Beisheim School of Management at WHU.

Zalando initially focused on the sale of footwear because it was inspired by the US internet store Zappos.com.

The business expanded its product line to include clothes in 2010 and began operations in France and the Netherlands. It launched online stores in the UK, Italy, and Switzerland in 2011. Zalando expanded to Sweden, Denmark, Finland, Norway, Belgium, Spain, and Poland the following year. Zalando expanded its operations outside of Germany in 2012 and started shipping goods to Austria.

Since 2013, Zalando has transformed into a European digital platform by following the lead of internet businesses from the East, particularly China.

Zalando began the process of transforming itself into a digital shopping mall by imitating Chinese businesses. This allowed fashion houses and merchants to earn sales through the Partner Program as well, frequently with no involvement from Zalando.

The MDAX has added Zalando since 22 June 2015. Zalando started working with Topshop in 2015 and started selling products online.

Zalando started turning a profit in 2014 after years of losses since its founding. The two most significant cost components for Zalando are fulfilment and marketing expenditures, which together account for 50% of total revenues without taking into account the costs of sales.

In 2010, marketing costs reached a high of 25%. Germany, Austria, and Switzerland, collectively referred to as “DACH,” account for about 50% of sales income.

Switzerland vs. COVID-19

Like all other countries, Switzerland has been, and still is, affected by the COVID-19 pandemic. Cases were as numerous as those in the most affected countries.

However, the number of victims is significantly lower, probably because of the quality of the Swiss health care system and better organisation and implementation of government measures.

The Swiss Federal Council is currently undergoing a gradual exit from the lockdown which will take place in three phases, on 28 April, 11 May and 9 June.

These measures seem all the more credible because containment has never been complete in  Switzerland: non-food stores and pharmacies were closed, as were restaurants, but outside these sectors population was authorised to move and work.

In terms of economy, the closure measures have, as everywhere, caused a great deal of damage and a drop in GDP of approximately 8% is expected in 2020.

This is the result of both the measures taken and the fact that, as the Swiss economy is very integrated with the economies of its neighbours, the loss of purchasing power will be felt in Switzerland.

However, GDP is generally expected to rise by the same amount in 2021, according to projections by most economists.

Assistance measures taken

The federal government and the cantons have also taken measures to support companies and employees.

These compensatory measures include direct aid to companies which had to close or those whose turnover has been significantly reduced, intervention in the payment of commercial rents, loans, loans guaranteed by the public authorities, easier access to temporary unemployment, etc.

It is recognised that these measures have been effective, although they are insufficient to compensate for the losses suffered by businesses. In addition, the Federal Government and the cantons have been very reactive, with aid sometimes being granted within only two or three days.

The future of the Swiss economy

As is the case everywhere, lockdown measures, although not comprehensive, will have medium- and long-term implications.

However, one of the important advantages of Switzerland is that the public authorities were very lightly in debt and therefore have a significantly higher borrowing capacity than most of the other European countries.

In addition, the federal budget has been in surplus in recent years, and the state wisely refused to listen to those who recommended the spending of the budget bonus.

Therefore, Switzerland has now a greater capacity to intervene without jeopardising the balance of public finances and without requiring new taxes from taxpayers.

Residence in Switzerland

This is probably one of the reasons why the establishment of a company in Switzerland, or the acquisition of a Swiss residence, is to be recommended today, provided that it corresponds to reality.

There is a concern that some other countries, including in Europe, will take very heavy fiscal measures, either at the end of this year or in the following years, in order to service their very heavy 2020 expenditure incurred.

It is highly unlikely that Switzerland will be forced to take equivalent measures.