Zalora quietly profitable amid the rise of Shein, TikTok Shop

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IN FOCUS

In today’s newsletter, we look at:

• How Zalora achieved profitability as a vertical ecommerce in Southeast Asia
• The potential partnership between TikTok Shop and Tokopedia in Indonesia

Hi there,

Fashion is one of the top-selling categories in ecommerce. Personally, I prefer shopping for clothing online to going to offline stores.

The reason is convenience. I can check the product catalog and see whether my preferred sizes are available, all from the comfort of my home.

It’s impossible not to mention Zalora when speaking of fashion ecommerce. The company, founded in 2012 and backed by Rocket Internet, has become profitable – a goal that its ecommerce peers have yet to achieve.

Last year, the marketplace reported a positive adjusted EBITDA margin of 0.7%, with 2.9 million shoppers purchasing at least one item from the platform. This translated into US$451.4 million in net merchandise value.

In this week’s Big Story, my colleague Melissa examines how Zalora managed to achieve profitability amid the rising popularity of Shein and TikTok Shop in Southeast Asia.

One factor is that Zalora not only focuses on the marketplace model but also provides ecommerce solutions such as warehousing, fulfillment and logistics, as well as marketing.

Meanwhile, I analyze the potential collaboration between TikTok Shop and Tokopedia that is brewing in Indonesia. TikTok is looking for ways to revive its ecommerce operations in the country, and partnering with a local player is one of its options.

— Jofie

THE BIG STORY

Now profitable, Zalora bets on B2B, subscriptions for growth

Image credit: Timmy Loen

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