Zalando’s Takeover of About You: Expanding Into Eastern Europe

A huge announcement in German fashion eCommerce: Zalando is acquiring its rival About You from parent company Otto for €6.5 (US$6.8) per share. The deal values About You at €1.13 billion (US$1.19 billion).

The move has shaken up an entire industry that has struggled to remain on top of the global game, particularly in the face of competition from companies that operate at a significantly lower price point than Zalando or About You. The similarity of the two brands in their home market of Germany has traditionally pitted them against each other: In a head-to-head comparison, Zalando takes the lead over About You.

According to Zalando’s press release, the takeover is of complementary nature, both in regards to the B2C and B2B segments of the two companies. About You’s competitive advantage lies in its presence in Eastern Europe. With the acquisition, Zalando will expand its presence by proxy in previously untapped markets, like Bulgaria, Portugal and Greece. Zalando's strategic decision to gain a stronger foothold in Eastern Europe was signaled by former CEO Ritter back in 2018. Today's news represents a further step in this endeavor.

It is not just a question of presence, however: Zalando also gains the upper hand by acquiring its competitor in markets in the region where Zalando operates with a lower market share than About You. This applies to markets such as Croatia, Hungary and Lithuania.

The acquisition will have its ripple effects on all parties involved, as well as on the industry as a whole. The About You brand will continue to exist and its B2B software Scayle added to Zalando’s operating system ZEOS. How this will affect the Otto Group and Zalando Group remains to be seen.