Revolution Race is continuing strong growth while Zalando lags in growth
The Swedish outdoor brand Revolution Race (RVRC) reported another set of strong results for Q1/2024 with a +15,5% revenue growth. This growth was achieved on all fronts. Nordics has been the most difficult market for growth. Despite that, RVRC reported a third quarter of growth in the region.
As the other markets have grown faster, the company's original home market (Nordics) has become its smallest market. While in Q1 2021, Nordics represented 41% of RVRC's sales, it now represents only 20% of revenue.
While the sales in the Nordics have remained almost flat since the start of 2021, the German-speaking DACH region has grown almost threefold. The same applies to the Rest of the World region, which has grown in three years from one-third of the revenue in the Nordics to bigger than the Nordics.
This expansion has enabled RVRC to double revenues to 1,8 billion SEK. This rapid growth has been achieved with strong profitability (21,1% in Q1/2024).
The company states that strong social media and customer involvement are essential to this strong growth. The customer product reviews fuel the product development and also fuel further growth on the social media platforms.
“Our global community grew to over 1.7 million social media followers during the third quarter, and the number of unique product reviews increased to over 600,000. Feedback from customers builds trust and is crucial not only for helping others find the right products but also for providing us with insights that enable development and significant improvements in our product range.”
Zalando with more lackluster growth, albeit improving
Zalando reported a fourth straight quarter of declining revenues. At the same time, the marketplace has started to recover. It reported a +1,3% growth after three quarters of decline. This indicates how Zalando is moving from 1st party retailer to a marketplace.
The company illustrated this by starting to report separately B2C and B2B revenues. The consumer-facing business saw declining revenues, whereas the business-facing operations reported strong growth of +13,4%.
The company is doubling down on the marketplace business as it hopes to get significant part of the revenue from that.
“The partner business continued to outperform our own retail business that were putting us on track to reach our partner business target share of 40% to 50% of B2C GMV by 2028.
This quarter, our Beauty, Sports, kids and family as well as our Lounge by Zalando proposition delivered the strongest GMV growth”
