QVC Acquires Zulily for $2.4 Billion to Attract a Younger Demographic

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Zulily QVC

It’s a match made in retail heaven, adding bling to sass. QVC, the world’s leading video and e-commerce retailer is set to acquire Zulily, a leading e-commerce site serving millennial moms, for $2.4 billion.

Zulily has been delivering daily, curated flash deals on clothing, shoes, home decor, toys, gifts and more since its launch in 2010, exceeding $1 billion in annual net sales in five years.

With a network of 10,000 vendor partners, Zulily customers place 56 percent of orders on mobile devices. The acquisition augments QVC’s reach to young mothers who love to shop while accelerating an m-commerce leadership position.

“This will meaningfully increase its e-commerce revenue as well as attracting a younger demographic than QVC’s customer base,” noted Moody’s Investors Service in a report, as reported by Business Insider.

“As online shopping evolves, this partnership brings together two high-performing and highly complementary leaders in commerce,” said Mike George, President and CEO, QVC, in a press release.

George added that the overlap of customers is small, with QVC’s typical consumer between 35 to 55 years old and Zulily’s 25 to 45. He noted that the Zulily acquisition is a way to “further engage modern women who love to shop in new and compelling ways.”

Darrell Cavens, President and CEO, Zulily, added, “Together, Zulily and QVC have complementary philosophies about our approach to entertaining and engaging our customers, and we’ll now have the ability to unlock synergies for growth and deliver new ways to innovate on the discovery commerce model and change the way people shop.”

QVC and Zulily combined represent annual revenues of more than $10 billion and 230 million units shipped globally to 19 million customers in 85 countries.

“Zulily’s problem is it’s not sticky,” said Paula Rosenblum, managing partner at retail consultancy RSR Research in CNN Money. “Clearly they weren’t getting a lot of return business. This is QVC’s core. This is what they do. They create community. If you don’t know why you aren’t getting repeat customers, you can leverage this community to help you figure out what you’re doing wrong.”

Zulily was named one of Fast Company’s most innovative companies in retail this year, but growth has slowed recently due in part to delivery times of two to three weeks and a no-return policy.

The Wall Street Journal reports that Cavens “has often likened Zulily to the Web’s version of QVC, saying the two companies share similar selling approaches, which encourage impulse buying rather than planned purchases.”

The $2.4 billion dollar deal will also benefit Alibaba Group Holding’s, which has a 9.3 percent stake in Zulily.

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