Online Retailer Zalando Goes Green to Ward Off Amazon
Online Retailer Zalando Goes Green to Ward Off Amazon
(Bloomberg) -- German online fashion retailer Zalando SE has a new tactic to gain more clients as it wards off Amazon.com Inc.: putting a greener gloss on a business model that’s been criticized for its carbon footprint.
Rubin Ritter, the co-chief executive officer of Europe’s biggest answer to the U.S. e-commerce giant, said that the sustainability push Zalando announced Wednesday will give it a competitive advantage. Companies that don’t embrace the trend will lose clients, he added.
E-commerce and fast fashion have been singled out for being environmentally unfriendly because of frequent deliveries, extra packaging for each shipment, and returns that can double the amount of transport. Zalando pledged to be carbon-neutral and will eliminate single-use plastics in packaging by 2023. The company also plans to make its in-house Zign label sustainable starting with next year’s spring/summer collection.
“We have been part of the problem,” Ritter said. “Going forward, our aspiration is to be part of the solution. We see a clear link between acting sustainably and continued commercial success.”
Zalando also will stop working with brands that don’t meet its ethical standards, Ritter said.
The push comes as Zalando reported a surprise profit in the third quarter Thursday as efforts to get more brands to sell on the site pay off.
However, Zalando shares fell 4% as of 9:44 a.m. in Frankfurt as some investors were disappointed the company didn’t raise its 2019 outlook. The stock has surged almost 80% this year after losing half its value in 2018.
Investing in its sustainability won’t “materially impact” profit this year and next, Chief Financial Officer David Schroeder said on a conference call.
The company said it has switched to renewable energy for 90% of its needs, and it began offsetting all its carbon emissions starting Wednesday.
--With assistance from Sarah Syed.
To contact the reporter on this story: Stefan Nicola in Berlin at snicola2@bloomberg.net
To contact the editors responsible for this story: Rebecca Penty at rpenty@bloomberg.net, Thomas Mulier
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