Zalando: Tradebyte acquisition boosts marketplace development

German fashion e-tailer Zalando just announced that it acquired 100 percent of German IT specialist Tradebyte for an undisclosed sum. Thus, the online retailer from Berlin is a step closer to its goal to becoming a worldwide, independent marketplace.

Zalando and Tradebyte have been cooperating since 2012, when the latter helped Zalando to implement its platform strategy. Tradebyte specialises in two main areas: technical support for clients who want to set up an e-commerce marketplace and the connection of brands and (r)e-tailers to those marketplaces.

“With this partnership, Tradebyte wins Europe’s leading online fashion platform as strong companion, supporting us with its excellent reputation and know-how in order to accelerate our further growth and development. Zalando’s investment will allow us to reach a new level in our positioning as a vital player in the global digital commerce business”, commented Matthias Schulte, Tradebyte's managing director.

Partnership will strengthen online platform

Tradebyte, founded in 2009, started with connections to various German mail order companies like Quelle, Otto and others before doing business with Amazon.de in 2010. Among its clients today are well known fashion brands like Falke, Gerry Weber, Guess, Hallhuber, O'Neill, Trigema, Street One and Tom Tailor as well as Zalando competitors like AboutYou (a subsidiary of Otto Group) and Klingel. According to Zalando, Tradebyte will still act „completely independently“ and remain an established brand, complete with all its partners, clients and managment team. In addition, Tradebyte will continue with sales channels for brands and manufacturers outside of Zalando's realm.

For Zalando, integrating Tradebyte means the company will now be able to work on its marketplace restructuring internally. „We have worked with Tradebyte in the past but interconnectedness is so important to us that we prefer to work on it in-house,“ confirmed Malte Dous, director of Zalando's partner programme.

Zalando started the partner programme a while ago and has around 50 partners in Germany to-date, while it works with around 100 partners in 15 countries as part of its brand solutions programme. Through "brand shops", they can avail of Zalando's channels to sell their products. Thus, Zalando has left the stage of mere online seller and has become a marketplace by offering other brands through independent sellers.

"This partnership strengthens the abilities of both partners to digitalise a partners’ stock and to connect it to different channels – also beyond Zalandos possibilities,“ announced Tradebyte on its website, while Zalando's press release of 12th May mentioned the following reason for intensifying the partnership: "to strengthen its ability to digitalize this partner stock and connect it to retail channels.“

In the future, Zalando may work on its connection between brick and mortar and online stores (for example when fulfilling online orders with store inventory) or on making its partners more independent when it comes to fulfilling and sending out orders. In a recent interview with FashionUnited, Zalando confirmed that it was aiming to become "the sports x fashion destination" for Europe.

Images: Zalando / Tradebyte