What: Zalando acquires rival About You for EUR 1.1 billion, securing Otto Group's 73% stake and offering a two-thirds premium over the market price, in a strategic move to strengthen its position against Chinese competitors in European online fashion retail.

Why it is important: This consolidation represents a significant shift in European e-commerce, as established players unite to compete more effectively against aggressive Chinese platforms like Shein and Temu while strengthening their regional market presence.

Zalando's acquisition of About You marks a major consolidation in European online fashion retail, with the company offering EUR 6.50 per share, representing a premium of two-thirds over About You's previous closing price. The Hamburg-based Otto Group, which holds 73% of About You's shares, will sell its entire stake to Zalando. The transaction, expected to close by summer 2025 pending regulatory approvals, aims to create a stronger European fashion commerce platform. About You, founded in 2014, has built its reputation through celebrity collaborations and innovative marketing. The deal comes as both companies face increasing competition from Chinese rivals Shein and Temu, whose aggressive pricing strategies have disrupted the European market.

IADS Notes: Following its recent success in outperforming the German market and focus on premium positioning, this EUR 1.1 billion deal aims to consolidate Zalando's position as Europe's leading fashion platform. The timing is crucial, as both companies face increasing competition from Shein and Temu, whose growth rates are predicted to decline in 2025.

Zalando buys rival About You in a consolidation effort to compete with Chinese platforms