Zalando buffs up beauty credentials with new Berlin shop

Europe's biggest online fashion retailer Zalando is opening its first bricks and mortar beauty store in Berlin this week, seeking to buff up its credentials in the market for cosmetics, skin care and fragrance products.

Zalando started selling branded beauty products online in Germany in March this year, and its first foray into a physical store is aimed at establishing its reputation in beauty by hosting make-up masterclasses and exclusive product launches.

Other ecommerce players are also recognising the limitations of pure online and experimenting with stores, most notably Amazon , which last year bought the Whole Foods chain and has been testing grocery stores without checkout lines.

Fashion retailers such as H&M and Inditex's Bershka and Oysho are rolling out their own cosmetics lines. Zalando's British rival ASOS launched the sale of more than 100 beauty brands on its site last October.

"We are still at the very beginning with beauty at Zalando," Claudia Reth, director of beauty, told Reuters. "We are a fashion expert and we have to build up a reputation to become a beauty expert."

Zalando already sells around 140 beauty brands and 5,000 products online and plans to launch big-name brands Estee Lauder, Mac, Clinique and Origins this week, and add many more in coming months.

Around 70 percent of beauty orders so far were mixed with fashion, Reth said.

At the store in Berlin's trendy Mitte district, which opens to the public on Saturday, visitors will also be able to have express manicures, skin-care consultations and makeovers.

When it comes to cosmetics and skin care products customers often want advice, Reth said.

Apart from some discount outlets to shift excess stock, Zalando does not yet have a physical flagship shore.

In terms of the market as a whole, only around 5 percent of beauty sales are currently online compared to about 15 percent for fashion, but it is growing fast as more brands increase their digital presence, Reth said.

Reth said Zalando was looking at expanding beauty beyond Germany and had drawn up a short-list of potential markets but declined to say when they could make a move.

Launched in Berlin in 2008, Zalando has grown fast to sell almost 2,000 brands in 15 countries, mostly in western Europe. In June, it said it planned to expand to Ireland and the Czech Republic.

Unlike British rival ASOS , which launched has its own line of cosmetics, Zalando has no plans to sell its own-label lipstick or mascara at present.