Zalando’s best business doesn’t sell clothes.
Hi,
on 3 November, Zalando reported its third quarter. The headline was a record 63.2 million customers. The number I kept going back to was further down: how much Zalando keeps from every €100 of revenue.
In the fashion store you know, it kept €2.30 in adjusted operating profit, before one-off costs. In the business that runs warehouses and shop software for other brands, it kept €11.90. That second business is 11% of Zalando’s revenue, and it now earns 40% of its profit.
If you sell fashion online in Europe, Zalando is likely your partner, your competitor, your supplier, or all. More and more, it sells what sits behind other companies’ clothes: the warehouse, the shop software and the ad space. From 2027, it adds an agent that buys in their stores.
THE NUMBERS
Zalando's third quarter, against the same quarter last year (2025):
Group: GMV €4.54 billion, +7.5% (+6.1% like-for-like, counting ABOUT YOU in both years). Revenue €3.17 billion, +5.1% (+3.3%). Adjusted EBIT €106.5 million, a 3.4% margin.
Below the adjusted line: Reported EBIT was €13.1 million. The €93 million gap to adjusted EBIT is mostly restructuring (€58M, mainly the Erfurt site), share-based pay, and ABOUT YOU deal costs. After interest and taxes: –€18 million.
B2C (the shop you know): Revenue €2.83 billion, +2.8% (+0.9% like-for-like). Adjusted EBIT fell from €76.6 to €64.4 million, so the margin went from 2.8% to 2.3%.
B2B (the shop behind other shops): Revenue €354 million, +27.9%. Adjusted EBIT more than doubled, from €19.6 to €42.2 million, an 11.9% margin.
Customers: 63.2 million active (+2.9%), still ordering 4.9 times a year, the same as last year. Growth came from bigger baskets (€63.3, +2.7%), not from people ordering more often.
Put the segments side by side, and B2B is 11% of revenue and 40% of adjusted EBIT.
Why B2C profit fell: gross margin dropped from 41.8% to 41.0%. Zalando calls it "targeted investments in attractive offers", especially in sneakers. That means discounts. On top of that, it started the autumn campaign earlier and spent on World Cup marketing.
Zalando Q3 Earnings Call Presentation: Group: Q3 delivers improved GMV and revenue growth alongside increased adjusted EBIT
WHAT ZALANDO IS SELLING
Take the business apart, and there are three things it sells to other companies.
1. The shelf. Partner brands sell directly on Zalando, and Zalando takes a commission. Partner GMV grew 17.8% and is now 33.6% of B2C GMV, up 2.9 points in a year. By my math from the slides, about 70% of this quarter's GMV growth came from partners. That’s why B2C revenue (+0.9%) lags GMV (+6.1%), both like-for-like: on a partner sale, Zalando books only the commission.
2. The warehouse. ZEOS Fulfilment stores and ships for brands, on Zalando and on their own channels. It is the biggest B2B revenue stream, and its gross margin rose from 18.4% to 20.6%. New logistics clients this quarter include Lascana, LC Waikiki and Champion.
3. The software. SCAYLE is the shop system that grew out of ABOUT YOU, now used by N Brown in the UK and Rue Gilt Groupe in the US. Tradebyte connects brands to marketplaces.
The shelf has a fourth line attached: retail media. Ad revenue reached 2.0% of B2C GMV. That’s roughly €90 million of revenue in the quarter.
One thing to keep in mind when reading that 40%. Take a €100 pair of sneakers. If Zalando buys and resells them, B2C books €100. If the brand sells them on Zalando itself and ships from Zalando’s warehouse, B2C books only a commission, and B2B books a fulfilment fee. Same shoe, same customer, same app, but the profit moves from one segment to the other. So not all of B2B’s 40% comes from other retailers. A part is brands selling on Zalando’s own app and paying it to ship.
THE NEXT SHELF: ZALANDO EXTENDED
The announcement most media and commentators picked out isn't a number. From 2027, Zalando's AI agent will shop in other online stores while the customer stays in the Zalando app. Westwing is the first pilot in Home & Living.
In the agent issue, Amazon’s answer to who buys on the customer’s behalf was: our agent may shop elsewhere, but outside agents can’t shop with us. Zalando is building both directions. Its own agent will buy from other shops, starting with a partner rather than scraping the web. And it’s piloting Google’s Universal Commerce Protocol, the standard that lets outside agents check out. Westwing gets the sale and can buy ads on Zalando. Zalando keeps the customer in its app.
MY READ
Zalando’s fashion store earned a 2.3% margin this quarter. The warehouses, software and ad space it built to run that store earn more when other companies use them too. The store is becoming the showroom for the infrastructure.
It works because the cost is shared. Zalando had to build fulfilment centres, returns handling and a shop system for itself anyway. Every brand that rents them makes each parcel cheaper, which is exactly what the slides credit for the B2B margin. The brands get European scale they couldn’t build alone. Both sides earn on the same warehouse.
For any retailer, the takeaway is a question most strategy decks skip: which of your internal capabilities would another company pay for? For Zalando, it was logistics. For a grocer, it could be its delivery network, its ad space, or its store footprint. Zalando built what it needed first and sold it second. That second step is now its fastest-growing business.
Which part of your business could someone else pay to use? Hit reply and tell me.
Sources: Zalando Q3 2026 results, earnings call presentation and fact sheet (3 Nov 2026), Handelsblatt, Retail-News
Talk soon, Luca
