Technology of the week – Zalando vs. ASOS
Who has not used the Internet to purchase something, is more an exception than a normality these days. The Internet has forced companies to be more innovative as competition increases fiercely. In this article, we will provide you with an analysis of two pure e-commerce business models, namely Zalando and ASOS, and see how they compete through technological innovations.
Zalando business model.
In 2008, inspired by the American Zappos, Zalando was born. What started as an online retailer for shoes, become soon one of the biggest fashion web shops in Europe. Zalando is now active in 15 countries in Europe and offers over 1.500 different brands for men, woman and children. With a revenue of €2.214 million in 2014 and a customer base of 14.7 million people, it is hard to image the e-commerce business without Zalando. To stay a head of the competition, Zalando created a new feature, namely the “Image Search”. With this tool, customers are able to make a photo of a piece of clothing they want to posses, and the Zalando database will show all the possible options that are in line with this photo.
ASOS business model.
Another famous player in the online fashion industry is ASOS, AsSeenOnScreen. This UK based company is started in 2000 with selling beauty products and clothes, it now has more than 850 different brands and delivers in 237 countries all over the world. ASOS provides as they call it “Fashion Lovers” with the newest fashion. To achieve this, they added short movies of a model wearing the clothes, so that the customers know how the clothes move when wearing them. Furthermore, ASOS developed a new platform, called “Marketplace, where young designers and small vintages boutiques can trade their products. Even though ASOS has a large reach around the world, with 8,8 active customers and a revenue of €1.324 million, Zalando has caught up quite well these past years.
Even though the business models of these two major players in the fashion industry are very alike, there are some difference that may be the key to outperform the other. Both companies try to be as creative as possible in discovering new technologies to make the life’s of their customers even more easy. For ASOS, it might be a good idea to discover the options of expanding to other segments as well, meaning the less highly fashionable customers. Furthermore, in terms of marketing, they should consider also offline marketing, as it will expand their customer base. To keep up with Zalando’s image search, ASOS need to stay innovative, as otherwise will lose their market share.
Zalando on the other hand, has to be careful that it does not become too general, as it will lose their focus on the services they provide. Zalando needs to try to expand to the rest of Europe and even beyond to be able to keep up with the growing competition.
For both companies there are different challenges that needs to be tackled in order to maintain their position in this fast changing industry.
Mark Smeitink 344571
Philip van Zadelhoff 352591
Nikki Bueno de Mesquita 356897
Eva van Baarle 357812
Vera Suijkerbuijk 371212