More than ten years of success. And the end of this love story between the empire of Amancio Ortega and its digital expansion is still to be written. In view of the results, the online future of the Inditex group looks promising, revolutionary for consumer purchasing habits and essential for the company’s business.
The textile giant was late to the online sales game but with steady steps, without grandiose displays or a single mistake, convinced of its omnichannel strategy from the start, in perfect harmony with its offline experience. It has been a little over a decade and they have managed to integrate the online channel into the group’s main markets. Slow but steady.
Inditex debuts in e-commerce with Zara Home, one of the youngest chains, specialized in textiles, home, and decoration. It was the forerunner. It launched its online sales platform in 13 European markets and for three years served as a test for all subsequent openings planned by the company. Today, Zara Home is the fifth brand of the group with the best turnover and has just opened its own eCommerce in South Korea, thus being present in 37 online markets.
Zara’s debut. 35 years after the opening of the first physical store in A Coruña, the largest chain in the Inditex group by business volume begins selling online in September. At the end of the year, it operates online in 16 European markets.
Pablo Isla takes over as president of the Inditex group after six years as CEO. Pull & Bear, Bershka, Massimo Dutti, Stradivarius, Oysho, and Uterqüe join the online channel in different European markets, meaning that all the company’s brands, except Lefties, were already selling online. The commitment to e-commerce is definitive. From this moment on, the international expansion of its eCommerce platforms will be progressive and will advance at the same rate as the commercial surface area increases, with new establishments in classic and emerging markets. Zara starts selling online in the United States and Japan.
Inditex continues with its growth plans in the digital environment and once again focuses on a emerging market, a commerce giant with over 1.3 billion inhabitants and more than 200 million online shoppers.
On September 5, 2012, zara.cn begins operating in China, the country with record-breaking online sales, a market that will not stop growing in terms of customers, operations, and platforms.
This is a strategic decision by the Inditex group that seeks to reinforce its presence in the Asian market and expand its business in China, where it will close the year with 450 physical stores in addition to the recently launched eCommerce, making it the second market with the most points of sale behind Spain.
But not everything was focused on China: that year, Zara Home and Massimo Dutti present their online platforms in the United States. And Oysho becomes the first chain of the company to reach an agreement with the British ASOS, one of the largest European distributors online, to sell part of its collection online in the United Kingdom.
The flagship of the Inditex group continues to be unstoppable: it keeps growing and adding new online markets. In February, Zara opens its online store in Canada (along with Massimo Dutti and Zara Home), a country where the Galician company has been selling since 1999. In October, Zara launches its own eCommerce in Russia with the aim of strengthening its multichannel strategy, gaining sales potential and exposure. With the Russian market, Zara already has 25 online stores.
The Inditex group partners with Alibaba to open a new sales channel and boost its presence in China. In October, Zara opens its own store on the Tmall platform, the largest eCommerce site in the Asian giant with more than 400 million buyers, 50,000 stores and millions of products from more than 70,000 different brands.
As had already happened on ASOS with the entry of Oysho and Pull & Bear, Inditex begins to sell its fashion items in third-party stores to boost its online sales, in this case, on the Alibaba marketplace, where Bershka and Pull & Bear opened the way in 2013 for the main fashion chain of the Inditex group. China, the country with the highest online turnover in the world, remains a strategic market for the Arteixo company.
In addition, Inditex strengthens its presence in Mexico and South Korea, with the opening of the Zara online platform in the Asian country and Zara, Pull & Bear, Massimo Dutti, Bershka, Stradivarius, Oysho and Zara Home in Mexico.
The success in sales drives the various brands of the Inditex group to continue with their plans for international expansion and eCommerce growth. The Galician company includes Taiwan, Hong Kong, and Macao on its eCommerce map, adding three new markets in the valuable Asian region, for a total of 30 digital markets.
And although the fashion giant resists sharing its online business figures, it is the results from its eCommerce that lift Amancio Ortega to the top of the billionaire rankings. On October 23 of 2015, the founder and main shareholder of Inditex was the richest man in the world for three hours according to Forbes magazine, with a personal fortune of more than 78 billion euros.
In Europe alone, 5% of the company’s global revenue comes from online sales. Outside of Europe, the bet on eCommerce continues. Oysho, Massimo Dutti, and Stradivarius begin their particular third phase of expansion in China by combining their online stores with physical stores and sales through Tmall. Inditex ends the year with the opening of Zara Home’s eCommerce in Australia and Japan.
In 2016, the Inditex group continues to grow. They open physical stores for the first time in five new markets and begin operating online in eight more. In spring, they complete the online conquest of all European Union countries. In practice, all of the fashion chains of the Galician company have their own eCommerce in the 28 states and Turkey.
Inditex reaches 40 online markets worldwide, offering its customers the same products through the web that they can find in their physical stores, at the same price and with the same offer replenishment system that they use in commercial establishments.
The group’s online strategy works. Each year they inaugurate new eCommerce, sober and adapted to each country they bet on, taking care of every detail and imitating the offline shopping experience in an accredited functional environment for established brands. It is the triumph of omnichannel, the sum of synergies, the integration of online/offline services for customers, a model that allows them to see online collections, buy through the Internet, and pick up or return items in any physical store.
Ecommerce becomes the “strategic axis” of the company, according to Pablo Isla, and the Galician giant’s commitment to e-commerce increases as it gains importance within the group.
Following the example of Amazon and El Corte Inglés, it will end the year with Same Day Delivery services in six cities: Madrid, London, Paris, Istanbul, Taipei, and Shanghai; and Next Day Delivery in six other countries: Spain, France, the United Kingdom, Poland, China, and South Korea; strategic markets by turnover, eCommerce penetration, or number of stores.
In addition, the Inditex group has 16 logistics platforms distributed worldwide exclusively dedicated to supporting its online activity, and plans to build new warehouses to supply the demand for orders through the Internet.
The global expansion of the integrated model of physical stores and online sales is advancing. Markets where it already has a physical presence are beginning to operate online. India, Malaysia, Singapore, Thailand, and Vietnam launch zara.com; Bershka opens in the United States, Japan, and South Korea, where Oysho also begins sales through its own website.
And one more example of the value of omnichannel and integral management of the business model: Zara inaugurates in A Coruña a fully automated online order pick-up system in-store. A pilot test that avoids the customer going through the checkout, with the capacity to manage 700 packages at once and an optical QR code reader for instant collection of an order within 30 days.
Goodbye mystery. The Inditex group finally reveals how much it sells with a click. “It was the right time, since online is an element that contributes significantly to the company’s growth,” recognized Pablo Isla.
In 2017, the company’s global sales reached 25.336 billion euros, 9% more than the previous year. Online sales grew 41%, reaching 10% of the total. But there are more figures that explain Inditex’s eCommerce growth during the past year: 2.418 billion visits to the group’s web pages with peaks of up to 249,000 orders in an hour.
2018 meant good results for the Galician fashion company, with the opening of Zara online in Australia and New Zealand, Massimo Dutti’s alliance with Zalando to strengthen the chain’s online distribution, and with new digital moves that prioritize its omnichannel shopping experience integration strategy.
In its online channel during 2018, Inditex’s sales increased by 27% compared to the figures shown the previous year, achieving an online turnover of 3.2 billion euros. Although this is a less substantial growth than what it has presented over the last 5 years, it still shows the great potential of this fashion eCommerce giant.
This has been a challenging year for the fashion industry, including Inditex, which saw losses for the first time in the company’s history during the first half. However, even with 5% of physical stores closed and capacity and schedule restrictions in 88% of the Group’s stores, Inditex’s online sales continued to grow at a high rate, reaching 75% year-on-year during the first nine months of the year and 76% during the third quarter.
Between August and October, Inditex managed to record a profit of €866 million. However, this figure is far from the company’s best moment, representing a 26% decrease from the same period the previous year.
The goal for this year was to increase Inditex’s online sales to more than 25% of the total by 2022, a percentage that the company could easily surpass this year due to the boost its online channel received during the pandemic. In fact, the same group’s forecast is that by the end of this year, Inditex’s online sales will reach around €6.5 billion, representing around 30% of total sales, according to Bloomberg’s estimates.
Inditex surpassed itself by increasing sales by almost 50% compared to the first quarter of 2020. Taking into account that at the beginning of the pandemic it had suffered losses of 409 million euros, we are talking about an enormous capacity for resilience and adaptability to new online sales channels.
In fact, online sales explain much of the success, as it grew 67% in the first quarter of the year (which Inditex counts from February to April), an even greater percentage than what it experienced in the same period in 2020, when lockdowns boosted demand for this service by 50%.
One of the most important data reflected in the report is that gross margin grew to 59.9%, “as a result of the execution of the business model and the efficiency resulting from the full implementation of the digital transformation strategy,” the statement said.
At the end of 2021, the Inditex Group announced a significant internal restructuring of positions. After serving as chairman for 17 years, Pablo Isla stepped down, and Marta Ortega officially assumed the role of chairwoman on April 1, 2022. Meanwhile, Óscar García Maceiras became the CEO of Inditex, a position he still holds today, and Carlos Crespo, who had previously served as CEO, moved to oversee operations. However, in 2022, Crespo left the company.
During its first fiscal quarter of 2022 (from February to April), the Spanish giant of the textile industry earned €760 million. This represented an increase in net profit of 80% compared to the same period last year.
The group’s total sales played a large part in these positive results, as they reached €6.742 billion (a 36% increase from a year ago). However, another factor to consider is the effect of the sale and closure of physical stores and the benefits this brings, as Inditex closed 335 stores in one year, leaving a total of 6,423 worldwide.
On the other hand, the online channel was hit hard, with eCommerce sales decreasing by 6%. These figures differ from those reported during the equivalent period of 2021, when online sales experienced a 67% growth. Inditex linked the return to “normality” with the decrease in demand and announced its intentions to make the group’s online sales account for more than 30% of its total sales in 2024.
It should be noted that on March 5, 2022, Inditex ceased the activity of its 514 stores and its online platforms present in Russia.
In Inditex’s 2023 results, the group’s net profit increased by 30.3% year-over-year, reaching €5.381 billion. The group’s total sales rose by 10.4%, amounting to €35.947 billion. According to the results report, the company experienced “very satisfactory growth both in-store and online, positive across all geographic areas and in all formats.”
Online sales reached €9.064 billion, reflecting a 16% growth. Meanwhile, in-store sales increased by 7.9%. According to the company, the positive growth in the online channel is linked to strengthening customer relationships. During this period, online visits reached 6.5 billion (+10%), active apps reached 152 million users, and their social media followers totaled 251 million.
Furthermore, the company aims to enhance the online experience by developing new ways to connect with and strengthen relationships with customers. One of Inditex’s most notable initiatives is the upcoming launch of weekly livestreaming events for Zara in the U.S. and the U.K.
Inditex was not a pioneer in eCommerce and, in fact, took quite some time to enter this channel, while its main competitors had already been selling online for some time. The company’s philosophy has always been to meticulously care for its physical stores, attending to every detail.
Inditex has designed its eCommerce platforms with a minimalist aesthetic, reflecting the understated and functional style that characterizes most of its stores. These platforms are highly functional and free of excess, focusing on synergies and the integration of online and offline channels through the application of cutting-edge technologies such as logistics, radio-frequency identification (RFID), and augmented reality.
In recent times, Inditex’s roadmap for driving long-term organic growth has highlighted several clear priority areas. These include continuous improvement in its fashion offerings, optimizing the customer experience, strengthening its focus on sustainability, and nurturing the talent and commitment of its employees.
Additionally, the group is making key investments to develop innovations in its online channel, alongside improvements in its logistics platforms. All of this is being pursued through an innovative and technological approach, with sustainability playing a central role. One good example is the rcent live streaming with Kaia Gerber and Cindy Crawford.
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