Online retailer Zalando has increased its 2020 revenue expectations

Zalando has increased its full year earnings guidance following a surge in online shopping during the Covid-19 pandemic.

German online fashion retailer Zalando has said it expects adjusted earnings before interest and tax of between €250m and €300m for 2020.

The company, which has a growing technology hub in Dublin, announced last night (15 July) an increase in its full year guidance, which is its estimated earnings for 2020.

Zalando's original target for gross merchandise volume (GMV) and revenue were both between 10pc and 20pc. However, as the Covid-19 pandemic has prompted more people to shop online, the Berlin-based retailer now expects GMV to grow by between 20pc and 25pc and predicts revenue will grow by between 15pc and 20pc.

In a statement, the company said customers are increasingly turning to digital services. “As a result, Zalando has seen the number of new customers grow significantly over the past months. In the second quarter, more than 3m new customers shopped at Zalando.”

Revenue rose to between €2.01bn and €2.05bn, compared with €1.60bn the previous year. “Due to the ongoing impact of the coronavirus pandemic, customers are increasingly turning to digital services. As a result, Zalando has seen the number of new customers grow significantly over the past months,” the company said.

New e-commerce opportunities

The Berlin-based company isn't the only one reaping the benefits. Online shopping has been soaring worldwide amid the Covid-19 pandemic, leading to many companies pivoting their physical commerce efforts to digital strategies.

Canadian e-commerce business Shopify announced that revenue was up 47pc year-on-year in the first fiscal quarter of 2020. Start-ups are also using this as an opportunity to help these companies make the transition to e-commerce, while other online retail start-ups such as Bezzu is now in a position to expand its operations.

In Ireland, the Government launched the Covid-19 Online Retail Scheme, a fund for retailers with a physical store looking to increase their digital presence. At the beginning of July, Tánaiste and Minister for Enterprise, Trade and Employment Leo Varadkar, TD, announced that 183 retailers were approved for a total of €6.5m in funding through the Covid-19 Online Retail Scheme.