Zalando
€10.6B fashion platform leveraging network-effects and niche-construction, with ZEOS logistics enabling B2B expansion while targeting 10% of €450B European market.
Fashion platforms face the paradox of abundance: more inventory attracts more customers, but excess choice paralyzes decisions and destroys margins. Zalando generated €10.6 billion in 2024 (up 4.2%) serving 51.8 million active customers across 25 European markets, demonstrating network-effects where platform value compounds with each brand and buyer added. Gross merchandise volume hit €15.3 billion while adjusted EBIT surged 46% to €511 million, suggesting the platform escaped linear growth to reach ecosystem tipping points. The company operates dual flywheels: B2C connects consumers to 7,000+ brands (adding Versace, Marine Serre, On, Fjällräven in 2024), while B2B leverages ZEOS logistics infrastructure across 12 markets to fulfill for other retailers and TikTok Shop Germany. This demonstrates niche-construction: Zalando built fulfillment capabilities to serve its own marketplace, then monetized excess capacity by servicing competitors—the digital equivalent of leafcutter ants cultivating fungus gardens that feed the colony. The ABOUT YOU acquisition (closing July 2025) expands platform reach through a dual-brand strategy targeting different customer segments, projected to generate €17.2-17.6 billion GMV and €12.1-12.4 billion revenue in 2025. Zalando Plus loyalty program launched in seven countries to increase order frequency and basket size through costly-signaling: members pay for commitment that reduces shopping elsewhere. Yet fashion platforms face disruptive threats: TikTok Shop combines content and commerce; Shein demonstrates r-selection with extreme product velocity; AI personal stylists could disintermediate discovery. Zalando's strategy mirrors adaptive radiation into adjacent niches—beauty, home, premium luxury—while defending the core €450 billion European fashion market where it targets 10%+ share. The platform invested in Discovery Feed AI to surface products algorithmically, recognizing that curation creates value when choice overwhelms. In biology, keystone species structure entire ecosystems through disproportionate influence. Zalando bets that logistics infrastructure, brand relationships, and customer data create defensive moats that newer platforms can't replicate quickly enough to matter.