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00:00LACKLUSTER PERFORMANCE AND ITS IPO IN OCTOBER. SHARES HAVE BEEN ON THE RISE. FOR MORE, WE'RE JOINED BY ZALANDO'S MANAGING DIRECTOR . WHAT IS GOING ON RIGHT NOW? STARTING TO HEAR EVIDENCE THAT THE EUROPEAN CONSUMER IS BACK SPENDING MONEY. ARE YOU SEEING EVIDENCE OF THAT? >> YES. WE SPENT TODAY ANNOUNCING OUR RESULTS ARE GROWING CLOSE TO 30%. WE HAVE BEEN RE-ACCELERATING OUR GROWTH SIGNIFICANTLY COMPARED TO PREVIOUS QUARTERS. THAT IS DUE TO A POSITIVE MARKET ENVIRONMENT. YOU MENTIONED POSITIVE CONSUMER SPENDING TRENDS. IT IS ALSO DUE TO MANY INVESTMENTS WE HAVE MADE OVER THE LAST YEAR. WE THINK MOMENTUM IN THE BUSINESS IS GOOD. FRANCINE: YOU ARE ALSO HIRING. WHAT KIND OF PEOPLE ARE YOU HIRING? DATA CRUNCHERS, PROGRAMMERS, SOMETHING ELSE? THAT IS WHERE YOU ARE TRYING TO GROW. MR. RITTER: WE ARE SET AT THE BEGINNING OF THE YEAR, TACK HIRING WILL BE A MAJOR INVESTMENT IN 2015. WE SET A TARGET TO REACH ABOUT 10,000 EMPLOYEES AT THE END OF THE YEAR. WE ARE HIRING IN ALL AREAS -- OPERATIONS, FASHION BUT PREDOMINANTLY IN TECH. WE LOOKS TO DOUBLE OUR TEAM. CURRENTLY WE EMPLOY ABOUT 7 TECH PEOPLE IN BERLIN. IN ORDER TO GROW, WE HAVE RECENTLY OPENED A NEW TECH HUB IN DUBLIN WHERE WE EXPECT TO HIRE UP TO 200 ENGINEERS. GUY: HOW HARD IS IT TO HIRE ENGINEERS? EVERY TECH COMPANY TELLS ME THIS IS THE REAL CHALLENGE -- TALENT. FORGET ABOUT CONSUMERS, FORGET ABOUT FIGURING OUT HOW THE STRATEGY IS GOING TO WORK. THE BIGGEST CHALLENGE TO ANY TECH BUSINESS IS FINDING THE RIGHT PEOPLE. MR. RITTER: I WOULD NOT SAY FORGET ABOUT THE CONSUMER. WE SHOULD NEVER FORGET WHO OUR CUSTOMER IS. BUT HIRING TECH TALENT IS A HUGE CHALLENGE. WE HAVE BEEN VERY SUCCESSFUL TO SCALE OUR TEAM IN BERLIN THAT WE SEE THE MARKET THE COMING INCREASINGLY COMPETITIVE. ON THE OTHER HAND, ZALANDO IS BECOMING MORE AND MORE EFFECTIVE AS AN EMPLOYER SO WE ARE CONFIDENT WE CAN REACH TARGETS IN EUROPE. OPENING DUBLIN WAS THE FIRST STEP. WE ARE LOOKING TO OPEN MORE TECH HUBS TO BROADEN OUR SCOPE. IN BERLIN WE WILL CONTINUE TO HIRE A LOT OF TALENT. A LOT OF OUR FUTURE GROWTH IS GOING TO DEPEND ON WHETHER OR NOT WE CAN BUILD THE BEST TAX LOTIONS FOR THE CUSTOMER. WE NEED TO MAKE SURE WE HAD THE BEST ENGINEERS. FRANCINE: ARE YOU THINKING ABOUT HAVING A FOOTHOLD IN THE U.S. OR IS IT TO COMPETITIVE? MR. RITTER: WE HAVE ANY FOCUSED ON EUROPE IN TERMS OF OUR BUSINESS. WE ARE OPERATING IN 15 EUROPEAN MARKETS. WE ARE TARGETING A 420 BILLION EURO FASHION MARKET. WE STILL HAVE A TINY MARKET SHARE SO THERE IS A LOT OF ROOM TO GROW. WE WANT TO MAKE SURE WE IS ON EUROPE -- WE FOCUS ON EUROPE. THAT WILL BE ENOUGH TO HAVE THE OPTION TO BUILD A 10 BILLION PLUS REVENUE COMPANY. WE DO NOT HAVE ANY PLANS CURRENTLY TO MOVE OVER TO THE U.S. GUY: IS YOUR BIGGEST COMPETITOR IN EUROPE? DO YOU THINK THAT STORY IS GOING TO CHANGE? ICM IS AMAZON PUSHING INTO THE FASHION SPACE AND OTHER BRANDS UPPING THE DIGITAL PRESENCE. THE U.S. IS COMING TO YOU. MR. RITTER: I THINK MANY PEOPLE HAVE UNDERSTOOD THAT IT IS AN INTERESTING AND FAST GROWING BUSINESS TO SELL FASHION ON THE INTERNET. OUR SUCCESS HAS PROBABLY ENCOURAGED MONEY TO INVEST MORE IN THE SPACE. AT THE SAME TIME, UNDERLINED BY FAST GROWTH IN THE FIRST QUARTER, I THINK WE HAVE BEEN DOING A GOOD JOB TO CONVINCE CUSTOMERS TO SHOP WITH US. TO BE HONEST, OUR BIGGEST COMPETITOR IS EVERYBODY WHO IS SELLING FASHION. IT IS AN EXTREMELY FRAGMENTED MARKET. THE BIGGEST FASHION COMPANIES ONLY HAVE SMALL MARKET SHARES. I THINK WE ARE ON A GOOD TRACK TO CONTINUE TO WIN MARKET SHARE IN THIS COMPETITIVE MARKET. FRANCINE: YOU HAVE MANAGED SOME DEALS, I'M THINKING OF TOP SHOP AND GAP. WHEN WILL WE SEE A DIRECT TRANSLATION IN YOUR SALES? MR. RITTER: WE WATCHED TOP SHOP LAST YEAR, QUITE A SUCCESS STORY ON ZALANDO. IT HAS PROVEN HOW BIG BRANDS CAN USE ZALANDO AS A PLATFORM TO CONQUER EUROPE. WE LAUNCHED A CAMPAIGN WITH TOP SHOP FEATURING A MODEL WHICH WE HAVE PLAYED ACROSS EUROPE AND WHICH HAS SHOWN GREAT CUSTOMER ENGAGEMENT. I THINK THAT IS A GREAT EXAMPLE. THE GAP CAMPAIGN WILL COME OVER THE NEXT COUPLE WEEKS. IT IS OUR JOB TO CONTINUE TO BRING THE MOST ATTRACTIVE BRANDS TO OUR EUROPEAN CUSTOMERS. THAT HAS BEEN AN IMPORTANT PART OF THE ACCELERATED GROWTH IN THE FIRST QUARTER. GUY: WHAT IS MORE IMPORTANT TO YOU RIGHT NOW -- SALES OR MARGINS? MR. RITTER: I WOULD SAY THE CUSTOMER. I THINK WE REALLY TRY TO FOCUS THE COMPANY ON PUTTING THE CUSTOMER AND THE CUSTOMER'S INTEREST FIRST. MAKING SURE WE BUILD THE BEST PRODUCT. THAT WILL BE THE BASIS FOR US TO GAIN MARKET SHARE AND SHOW GREAT REVENUE GROWTH. FOR US, IT IS IMPORTANT TO WORK WITH A POSITIVE MARGIN. WE HAVE REACHED PROFITABILITY LAST YEAR AND AND THE FIRST QUARTER WE HAVE SEEN CONTINUED PROGRESS ON OUR MARGINS. FOR THE NEXT YEAR, OUR FOCUS IS ON THE CUSTOMER AND LONG-TERM PROJECTS LIKE TECH HIRING AND TO KILL OUR BUSINESS TO GAIN MARKET SHARE. MARGINS -- AND TO GROW OUR BUSINESS TO GAIN MARKET SHARE. IT IS TOO EARLY JUST TO FOCUS ON PROFITABILITY.

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Zalando’s Ritter: Tech Hiring a Priority in 2015

Zalando Managing Director Rubin Ritter discusses the outlook for the company amid a growing competitive market and hiring targets for this year. He speaks with Francine Lacqua and Guy Johnson on Bloomberg Television’s “The Pulse.” (Source: Bloomberg)

Bloomberg Technology
The only daily news program focused exclusively on technology, innovation and the future of business from San Francisco. Hosted by Emily Chang.
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