Zalando listed about 10% of its shares in the public offering on the Frankfurt Stock Exchange yesterday. The company`s €21,50 issue price was set at the upper end of its bookbuilding range, but their debut was described as disappointing by analysts yesterday. It seems like they all are preparing for the coming battle in this e-commerce business. Zalando is a big e-commerce retailer in Europe.
Zalando is founded in 2008 by David Schneider and CEO Robert Gentz. Zalando is a multinational e-commerce company that specialises in selling shoes, clothing and other fashion and lifestyle products online. In addition they are a tech powerhouse, leading Berlin`s startup scene to the Frankfurt floor.
It is a German company and has since their start expanded to offer its retail services in a total of fourteen European countries. The company`s headquarter are in Berlin. They are inspired by US online retailer Zappos.com.
They started initially specialised in the sale of footwear but has since grown to encompass other areas of fashion, lifestyle and sports. Schulze said that Zalando is a European online retailer and not a pure German one.
Zalando`s offering is one of Germany`s most significant e-commerce IPO to date. Revenue from online shopping in the country is expected to grow 22% this year and 16% next year ($73,5 billion). More than half of Zalando`s revenue comes from Germany, Switzerland and Austria. They had 2 billion euros in sales for the 12 months ended in June.
Zalando shares rose 14% in their IPO debut in Germany. Nothing compared to Alibaba`s smashing success. As you know, Alibaba now are flush with cash and I think they will spend most of it in the overseas markets.
This could leasd to M&A activity. Wayfair.com is still unprofitable, but they will try to raise $350 million and that is about 2x estimated 2014 revenue. That`s a $2,35 billion valuation. Zalando is a Zappos.com clone in Europe, but both Wayfair.com and Zalando are growing fast, and much faster than Overstock in the U.S. Zalando`s sale rose 30% in the first six months this year. 3X revenue for Zalando will be about $7 billion valuation. Far away from Alibaba.
A lot of things will happen in this market in the future. M&A is the key to grow fast and be big and I will be impressed if Alibaba can deliver the goods as fast as they do in China. The same day, within a few hours. Impressive! This is the reason why eBay was kicked out of the market in China, according to Jack Ma. It will interesting to follow this business in the future. This is only the beginning of a success story.
Web investor Rocket Internet is also poised to list today.
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Ket Garden
Shiny bull 