Zalando reported that the number of active customers increased by 14.1 percent year-on-year during the first quarter of 2019 to 27.2 million, with site visits rising by 29.5 percent to 924 million. The larger customer base placed more frequent orders than before. The number of orders per active customer grew by 11.5 percent as more customers are using the company's curated shopping service, called Zalon.
To further build on this momentum, the management announced that it will expand the geographical reach of Zalando Plus, which comprises a number of services aimed at making the shopping experience more convenient, such as easy returns and exclusive deals, for an annual fee of €19. This service is currently available for customers in Germany. A pilot project is live in Switzerland, with France and Italy to follow within the next twelve months.
The company's gross merchandise volume (GMV) jumped by 23.1 percent to €1,756 million in the quarter, while net revenues rose by 15.2 percent to €1,378 million. The management noted that the higher growth in GMV was partly due to the strong development of Zalando's Partner Program.
Zalando's adjusted Ebit margin improved by 0.5 percentage points to 0.5 percent, thanks to an improvement of 0.2 percentage points in the gross margin and a decline of 0.7 percentage points in the share of marketing expenditures. The Ebitda margin rose by 1.5 percentage points to 1.8 percent. However, the company ended the quarter with a net loss of €17.6 million, wider than the €15.1 million recorded a year earlier.
The management said the growth of its Partner Program was driven by brands intensifying their usage of the marketplace as well as by new partners, such as Calzedonia, Intimissimi and Margarete Steiff.
Zalando's marketplace focuses more than that of Amazon on branded fashion products, including active and casual sportswear, offering brands a window on its highly visited platform in exchange for a commission. The brands are able to control pricing and get data on customers' preferences. More than 250 partners participated in the program last year. In the quarter, about 30 percent of all Partner Program orders were handled via Zalando Fulfillment Solutions.
The company added that it has a newly acquired e-money license and will further strengthen and expand Zalando Payments Solutions by improving payment transactions on the Zalando platform.
The company confirmed its full-year guidance of GMV growth of between 20 and 25 percent, revenue growth at the low end of this range, an adjusted Ebit of between €175 million and €225 million and capital expenditure of around €300 million.