 Great, thank you. My name is Ian Martin. I'm the Europe news editor for Forbes Thank you for joining us and joining Robert for talk about e-commerce and the history of Zalanda and what we can learn about Changes in the sector. So Robert, thanks back to 2008 when you co-founded Zalanda Like what was happening in Berlin at the time? Like how do you set out to build this business? Yeah, yeah, thank you. Thank you for being here Yeah, so I think we started last around 15 years ago. So it was It was a very different time at the at the when we started it's like me and my co-founder We were kind of 23 when we started and I think if I look back I think in retrospect I think what really helped or what was really happening at that time I think there was this generation shift. It was like, you know, billionaires like such as me like born after after 1980 were actually entering into into retail or entering into into a workspace We're really becoming like important for for consumption And I think that's that really created I think a lot of Kind of kind of growth for e-commerce in general and as well for e-commerce in fashion lifestyle And that's I think very much I think what we what we had like 2009 when we when we started out and basically what we what we did if I would now Recall in retrospect. I think what really has later foundation for for our success in the very early days was I think number one that we Democrat democratized fashion so that you can actually have Have access to fashion wherever you are like if you're living like in in Helsinki or if you're living like in North of Finland or if you're living in Italy doesn't really matter. You have the same access to like a huge selection And so the second thing that we that we catered Was actually that we worked on every single problem that people might have in order to not order. Yeah, so like the risk So taking away the risk of it So we worked on the third payment so that you don't have to pay Before you actually really want to this view if you decide at home that you want to have it or we worked on On return so we actually made it very easy for people to return So basically there's nothing really left in terms of not trying it out And then I think the third aspect was very much that we were very Very quantitative and very analytical and very number space so that actually allowed us to invest much more Through the cycle in terms of marketing in terms of customer lifetime Value that we were actually out Yeah, like like outbidding many of our commits because we just knew of how to actually Of how actually return on investment of these areas are so I think that was that was pretty much I think the the biggest source of the first years of success Let's go to him I think kind of Zalando has kind of changed and evolved like from a pure e-commerce player now You've sort of have in-person retail like sort of how how is that kind of journey shaped? Like is that kind of reflecting what your customer wants? They're kind of a different experience in person or have more of a relationship with Zalando Sorry, didn't we? Oh, sorry. There's a little bit difficult here on stage So I think Zalando has changed quite a lot over those 14 years like from being a pure e-commerce player Now you have physical stores and increasingly focused around brands Is that reflecting a change in what the consumer wants from you and from e-commerce? Yeah, I think You know, I think there is Like as I said, I think there's seen there's been these shifts. I think in the in the early days. I really brought I think a lot of a lot of the growth To us and I think over time I think you always have to adapt a little bit what I actually next kind of what what I kind of next kind of shifts That you that you're seeing and I think especially now in these years The next kind of shifts that we that we see in the really effect the fashion lifestyle space is First of all, I think there's now a new generation shift. They're coming out. So the millennials that there was like my generation And and now there's actually second generation the the generations that like those ones that really were born with When the internet was there So where that way they grew up with mobile phones. They grew up with social media They grew up with very different kind of experience. They didn't we'd have to trust issues I think towards internet as much as like, you know, the previous generation. Yeah, so and they and this generation actually now is Is entering as well like the the workforce and becoming like important for for retail for Life's e-commerce and there comes a lot of Different perspectives and things for that. So this is a hugely affecting at the moment the the fashion lifestyle space a second big shift that we see is Is sustainability? Yeah, so the fashion lifestyle space is is an area that Is a polluter on many many aspects and and this really Brings of forces for good like the industry to think much more different about like how to actually Yeah, how to enable better solutions them and our circularity around The the usage of materials so sustainability is a big disruptor. I think in the in the overall space For good and the third aspect is as well a big big theme is generative eye. It's technology because if you think about fashion and lifestyle there is so much space on on on on visual consumption on on on textual consumption on on on discovery on on On on visualization on emotions and And what's computer vision and general in general if I as well texture base what it can and what it will do Will be usually disrupted for how digital Lifestyle e-commerce can be can be thought in the next couple of years. So these are kind of three big shifts that come together into Big mega shift. I think in fashion as it makes it. I think usually usually interesting at the moment That's great here. I wonder if we can go a little bit deeper one of those points raised about the kind of trust gap with a younger generation of of consumers who are more focused on More focused on sustainability I want to know more about the products that they're buying. How do you bridge that as a landowner? It's very happy. It's very tough. Let's move a little bit closer. Yeah, perfect So hoping to go a little bit deeper on that kind of topic of the kind of trust gap With this new generation of consumers who are very focused On sustainability like how do you bridge that was the london? How we bridge the trust gap between between consumers I well, I think one of the Like one of the main themes I think for us how we how we see ourselves to To invest is actually that we provide quality e-commerce. Yeah, so in quality e-commerce Experience actually has a like this quality theme is a big theme for us because it has like sustainability that like long-term thinking it has enabling Overdelivering our expectations. So it has Working with partners as well that that that wants to like with with many thought and many brand partners that really want to Build long-term solutions. And I think this this aspect of of trust of quality Is very much tied with each other And so quality is a big is a big theme for us the second big theme that we are working on is Is actually moving much more upstream so to give much more information to the to the customers give much more sources of inspiration give much more Invest the through generative iron to much more areas of to explore So we launched for example zelano stories, which is a big theme where consumers can interact with the experience on In a very different way that actually is beyond the transaction that can just actually as well explore how how do you Shop more for sustainable for more sustainable articles. What what is what is this article about? What's the value chain of starting about him? So moving upstream investing into content is the second big theme And the third big theme that we're investing to us is actually enabling everything that we've done Now all the infrastructure we've built to brands and give them a meaningful way to To use our infrastructure to operate as well outside of zelano So that it can tap all the infrastructure themes that we've built And and yeah and run their own brands for europe out of our infrastructure And as well for their own e-com and outside of zelano Was there a challenge to kind of switch from being an expert in logistics and fulfillment and returns To building out this experience in storytelling or kind of content to kind of reach these new consumers Well, I think it's um, it's it's it's pretty much a journey. I think um As I said, I think the the first generation shift that we have had I think actually sustain it like the the The logistics and returns as you said infrastructure that has been like a big big theme of success and I think in the seconds in all the second wave of of the consumers Building out more experiences will matter even more. So yeah, so So we bought like a company high snobiety, which is an expert in the in that space and really has been the influences of influences and I think they they already help us quite a bit to generate like Like high quality content that we see actually people really engaging with and being Being being being more much more up to funnel for for people in their experience That's great for many founders. They view The IPO the public listing as maybe an exit or kind of like a milestone on the journey But like you've continued to execute past that now it's nine years After your listing in that time Many of your rivals from that generation have faced significant challenges in the public markets Yeah, what does it take to continue to execute quarter by quarter and to continue to grow the business over that time? Yeah, so yeah, so we started the launch 2008 and so I'm doing this now for 15 years And for the bigger parts of our life, we've been a public company and for a smaller part of our life We have been a private company now. So so after six years we we went public and and I think what it's What it what it really takes I think in these in these in these terms is I think some some level of resilience and And as well managing I think the curves Yeah, so managing the emotional curves that the company actually goes through and it's never like this It's always like a little bit. So when actually there's a lot of success I think you don't really have to get carried away and overpromise on things and actually when things are a little bit more More tough I think you actually have to have to keep on motivating yourself that it actually goes goes back again I think that's probably one of the recipes. I think that we that we as As leadership team have always tried to live by I think the covert times really brought like a tremendous growth for us Yeah, and I think it would have been easy to say that that was us But it wasn't and so it was because it was a lot of a lot of things happening And I think these times that we're not working through as well very disruptive But we keep on trying to do the right things and investing through a cycle and in these area three areas that I mentioned And I'm very sure that in the in the long term. It's it's going to be again back to about double digital growth That's great to hear I think slander is in you unusual in that you have a co-CEO structure Like has that been helpful in terms of working with your co-founder to have that resilience to keep performing over nine years as a public company Uh, yeah, I think it has it has been so um, we have So my co-founder and I um, we still run it as co-CEOs And we've always run it as co-CEOs. So from day one We are best friends. He's uh, he's uh, like, you know, he's godfather of my my kids and I'm of his and So we're best friends and we are We really I think over the years really balance it as their balance out very well So he hangs out a lot with the fashion brands. Yeah, so and In the in the buying and and supply piece of the business I do much more in the distribution and technology and these areas and investors and I think Such a co-CEO structure is is very well working if you trust each other from day one as we do Um, and if you actually balance each other strengths very well, and that's what we do I'm not sure if I would recommend it like for people that don't know each other because I think it actually needs a lot of Common heritage and history, but if it works out is it's very beautiful. It's very good That's great to hear And we've learned there's kind of been a shift and there's a focus among your consumers on sustainability and on brands But clearly there's a segment of the market that is still like very motivated by price and fast fashion I think is bigger than ever What does it take to be like a e-commerce player in kind of era where sort of Chinese fast fashion brands like sheen and timu are becoming increasingly Active in europe and beyond. Yeah. Yeah um, yeah, I think these these models have been have been Have been notably like very successful in last last couple of years. I think It's I think first of all, it's a very it's something very different than Zalano's like we work with six Now a thousand brands like it like a customer of Zalano over two years By it's 19 different brands with us. So we focus on on high quality e-commerce So it's a very local in in europe only active in europe um, so it's it's it's a very different thing first of all, so but um What what I think it is and what I make what I take from it is um It has I think three components probably so the first one is Um, especially now in these times consumers are trading down Yeah, so consumers are don't have as much money. So they're trading down in these in these price segments Um, and this happens at the moment at scale around the world. So a second A second thing that enables these these players to be very successful at moments is um regulatory loopholes So and you have like a little loopholes Um in in europe at scale at the moment So they don't pay any customs for example because like everything that's uh every shipment that goes directly into european union Below 150 euro is actually customs free and all other brands fashion brands that sell within europe Actually have yeah, they pay customs. So they have actually they have They have a they actually have a loophole there and that's well with regulatory Um Topics, um There's a different kind of level of scrutiny you can apply to players that are outside of europe than within europe So That's the second thing and then the third thing is um is how these companies use data in a value chain from customers to the To factories and back in upstream downstream Um, and I think this is actually very very good what they do in these these areas It's actually very disruptive and and and for positive So I think the first two arguments they the first two things they will fade away over time But I think the third one is here to stay and I think there's a lot to learn for the fashion industry from how to use data actually for for to improve things I mean, what would it take for some of european, what would it take to level the playing field here in europe or for european cabezas kind of competes with these challenges Yeah um, I think you know I think it's For the for the regulation of technology companies. I think in europe. I think one of the aims. I think I think should be that it should be If you work for europe, yeah, it should be better To be present in europe, then it's actually do not be present in europe So I think that should be I think some goal of regulation that it's actually a goal to be Headquartered in europe pay your taxes in europe and be like employ people in europe that you know that there's actually benefit from that and If I would see that as a as a mission or at least one part of the mission of regulation I don't see it's at the moment that it's there yet. Yeah, so we Just speaking of like this these other types of companies. We just talked about I think like, you know, we Salana we last year only we spent about 40 percent of our central tech resources on regulatory topics like local regulatory topics or like You level regulatory topics So there is a huge Investments that we actually do to comply with regulation and reporting them and I think the same amount of investments Are actually not not done outside of companies operating for europe So there's a lot of I think innovation that they can have outside of europe for the european market that actually the european Companies actually don't cannot do because they just You know work on regulation So much of their pipelines So I think that actually needs to change over time a bit more That's that's the regulation enables company that operate from europe actually have as well a reason for being here within the european union I'm curious I think there's kind of scrutiny around fashion play fast fashion players Grows and the kind of the regulatory concern grows around this as well Like is it possible for these kind of brands to use the platform and the customer base? They built to kind of move up markets to kind of upscale or kind of like upsell from where they are now Um, sorry Just to recap the question You know sort of these fast fashion platforms have built sort of a huge audience huge revenue base But scrutiny from consumer and the regulator Grows month by month Is it possible for them to move up the value chain to like kind of focus around sort of brands? With the customer base they've built well, I think I think it could be um, I I think um I just think it's a very different model if you try to align your interests fully with brands um, then if you if you um If you actually build a brand Yeah, so that's that's why for example, like we have um, we've had like a big Private labels business in the past that will actually produce fashion brands Which um, which was not it's not a muster deep because we actually align our interests with events Our interest is to make a brand successful in europe and help them as a as a platform in between to To talk to more than 50 million people in europe and so we're 50 million customers across europe per year so So that's one of the key things that we do and I think that requires a lot of trust and interest alignment with brands and I don't I think I don't see how you can run the same Model when you actually at the same time actually have a huge Business that actually disrupts brands, so It's interesting early this year the european union announced new content rules called the digital services act Zalanda was named as one of the large or large online organizations as part of that as a sort of like your large customer base I know that you've launched a legal action to Challenge this classification like what is the impact of this law on Zalanda as a business? Yeah, it's again about regulation and and you know, we as you know, we um, we we've We um, we filed against not being considered as a very large online platform by by by the dsa Because I think it doesn't really take into full account our entire model Yeah, as a as as a retail at heart like with a very high quality content that we curate that we create on Zalanda and I think while the dsa doesn't Doesn't like is is of a is of a good purpose and actually solve something I think us being considered as a very large online platform under the dsa for various kind of legal reasons Is not what we think is the right thing to do and this uh, this judgment is still out, huh? That's good to know Maybe we kind of zoom back to 2008 like if you could talk to like a younger Robert back then before finding Zalanda What would you what would you tell yourself then? Back in the days you mean Would you do this again? Yeah Well, I've seen this the statement of the NVIDIA founder recently that who has asked this question and he said don't do it Is that like I will tell my youngest have to do it. I don't know I think I think starting a business it's scaling a business over like 15 years is a it's a it's a choice of a lifestyle it's a It's like, you know, you you you go to bed with the with the problems you wake up with the problems for 15 years So it's like it's a it's a choice of a lifestyle, but I think you do it for good You create something You you you play you employ many people and you I think as well look back and create something that you can be proud of yeah, so But yeah, it comes with a cost it comes with a cost on Sleepless nights it comes with the cost of pressure Comes with the cost of of a lot of responsibility and accountability And yeah, and but I would still say like, you know to my youngest I've do it Yeah, it's uh, it's a good thing to do and he will be proud of what you've done That's great to hear Now you're running one of the largest e-commerce businesses in europe I think you've changed the way that millions of europeans have shopped and experienced retail brands like, you know from your position now like What's it like sides you about sort of retail and e-commerce? What excites me? Yeah, well, as I said, I think these three shifts that we see in in in europe Fashion labs in europe like generation shifts the technology shifts and sustainability. They create a lot of opportunities for for companies to to reinvent themselves and And I think that's it was something that actually really excites me how we now with our huge structure of like, you know more than 50 million customers one is seven thousand brands that that we work with How we How we take on these these new shifts as opportunities that we now execute on And yeah, I think there's a lot of exciting stuff that we are working on very very passionate with the teams to To to see the progress that we're making on these areas If you're a young founder starting out again, like What would you would you focus again on e-commerce or like what in the e-commerce? Do you think you would focus on now if you start from scratch? um, well, I think The the fashion and lifestyle area is is an area that is different from many from the e-commerce space and in a way that It is actually not It is not as functional as like, you know selling books or selling electronics So you don't only with just a few information points actually um, actually Satisfy customer need. Yeah, and it has actually very very particular problems. So What challenges there? So one of the core challenges That we have for example in fashion Is the size of fit problem? That's how do you how do you actually really make? Make sure when a consumer orders something that it actually fits fits her and I think these problems they they require a lot of in-depth innovation that go into very difference In depth on the on the value chain in depth on on the consumer And these are very exciting problems to solve for that. I think you don't you don't solve for when you actually Yeah, just operate and cross the board. So yes, I think the fashion lifestyle space is an area that I think Offers a magnitude of very very interesting problems that are still at the moment unsolved for and yeah, and I'm Very passionate to solve these problems That's great to hear. Well, thank you to everyone for joining us today and thank you to robber for showing the insights on building the business Thank you. Thank you very much, sir