Analysis of Zalando share price
ZALANDO

Analysis before buying or selling Zalando shares

Analysis of Zalando share price
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The Zalando share is very popular with investors, so we offer you the opportunity to find out more about it with its live price, but also information about its activities.

Elements to consider before selling or buying Zalando shares

Analysis N°1

First of all, Zalando's expansion strategy will be monitored from a geographical point of view, i.e. the development of its activities outside Europe. Its presence in emerging markets will undoubtedly be the most important in the coming years.

Analysis N°2

The diversification of the products marketed by the group will also be an important element for its future growth. We will therefore keep a close eye on this.

Analysis N°3

Of course, the company's financial and economic publications, including growth and profitability figures, will be closely monitored.

Analysis N°4

Any change in consumer habits could also positively or negatively influence Zalando's share price.

Analysis N°5

We will of course carefully monitor the competition in this sector of activity, whether it is the large groups in direct competition or local competition which is proving to be increasingly threatening.

Analysis N°6

Zalando's pricing policy is at the heart of its marketing strategy. It goes without saying, therefore, that the slightest change in price will influence its profitability and sales.

Analysis N°7

Finally, the Zalando Group, like many others, is subject to the regulations and legislation of the countries in which it markets its products. Any change in these regulations could therefore have a significant impact on the evolution of its share price.

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General presentation of Zalando

The Zalando group is today a key player in the distance selling of clothing, shoes and accessories.

Created in 2008 in Germany, it has expanded to more than 14 European countries. It offers online sales services with the marketing of numerous brands, but also its own brand of shoes and clothing. Its turnover, which is constantly growing, will exceed €2.2 billion in 2014.

Zalando's share price does not currently include any stock market indices, as the stock was only recently floated on the stock exchange, in October 2014.

Since this introduction, the technical analysis of the charts shows us a broad upward trend, barely interspersed with a few slight corrective movements.

Analysis before buying or selling Zalando shares
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The major competitors of Zalando

The Zalando group is a major player in online sales, more specifically in the field of ready-to-wear and accessories in Europe. It is the European leader in this sector but is facing increasingly tough competition from a few companies operating in the same field.

Sarenza and Spartoo

This is notably the case of the Sarenza online sales site or Spartoo, which operate on an equivalent and almost strictly identical model to that of Zalando.

3suisses and La Redoute

We must also take into account the giants of online ready-to-wear clothing, 3Suisses and La Redoute, which also overshadow Zalando.

Amazon

Finally, although it has more diversified activities, including the sale of different ranges of products not found on Zalando, the e-commerce giant Amazon can also be considered as a direct competitor of Zalando.


The major partners of Zalando

Google

In 2016, Zalando and his partner, Google, launched a new project called "Project Muze" which is actually an artificial intelligence solution to create a clothing style according to one's personality and thus boost the e-merchant's sales.

Bestseller

In 2017, Zalando has also partnered with Danish fashion company Bestseller to create an online platform for shops to shop for clothing and accessories. Bestseller has sold half of its shares to Zalando, which will invest in the online platform to open up shopping to other fashion retailers. The amount of this exchange is still unknown.

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Positive factors for Zalando shares
The factors in favour of a rise in the Zalando share price:

Zalando's positioning in its preferred market, which is the sale of ready-to-wear and online accessories and shoes, is of course an undeniable asset of this company. Indeed, Zalando remains the current leader in this field in terms of sales, despite the recent appearance of several major competitors.

The rapid growth of this company in just a few years is of course also one of the strengths of this group. Zalando has been able to improve its results and significantly increase its turnover for several years in a row. This is of course very reassuring for shareholders and stock market investors.

The Zalando Group's highly diversified brand portfolio is, of course, another of its main assets. Today, the company offers no less than 1500 different brands, which enables it to respond to strong demand and to reach different targets.

The fact that Zalando operates throughout Europe is also an undeniable advantage as it allows it to protect itself against the risks associated with a single geographical sector in the event of a consumer crisis.

Finally, the very structure of this company, which is relatively small compared to those of some of its competitors, notably thanks to 100% online activities, is of course also appreciable as it allows for numerous savings.

Negative factors for Zalando shares
The factors in favour of a drop in the Zalando share price:

Let's find out the major disadvantages of Zalando and its main weaknesses:

  • For example, there are low investments in customer-oriented services, which could allow the competition to take market share. Similarly, the group's R&D investments are low.
  • Zalando's business model can also be easily copied by its competitors in the retail sector. Although the group was one of the forerunners of online clothing sales, it now faces competition from many other companies.
  • While the Zalando Group is trying to implement an attractive pricing strategy by trying to lower the price of its suppliers and supply chain, this is causing some problems with certain brands.
  • As the clothing retail sector is a faster growing sector than Zalando, the group is experiencing declines in market share and must continually develop appropriate solutions to stimulate future growth.
  • Finally, another major disadvantage of the Zalando group is the decline in unit income for the group. Indeed, the competitiveness of this sector of activity of the online sale of clothing and shoes exerts a strong downward pressure on the profitability of the company. As a result, even though the group's turnover is high, its net margin may be affected by the need for a price war.
The information supplied here is only for indicative purposes and should not be used without the completion of a comprehensive and complete fundamental analysis of this asset notably taking into account exterior data, future publications and announcements and all fundamental events and news that could influence the strengths and weaknesses or make them more or less significant. This information does not in any way constitute recommendations relating to the completion of transactions or a solicitation to buy or sell an asset.

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