Kogan catching up on marketplace opportunity
Online retailer Kogan.com announced the launch of Kogan Marketplace on Thursday, calling it a “win-win” for customers and businesses.
The marketplace currently offers more than 100,000 products from brands such as Microsoft, Breville, Lego, Fisher-Price, Paw Patrol, SodaStream, Gillette, Gucci and Philips.
That number is set to grow after today, when brands can apply to sell via the marketplace. According to Kogan.com’s most recent annual report, select brands and distributors were already selling on the marketplace in FY18.
“With today’s launch, there are now over 100,000 products available to purchase on Kogan.com — meaning customers have more choice than ever before,” Lazar Monin, Kogan.com’s director of marketplace, said in a statement. “Our mission is to make the most in-demand products and services more affordable for all Australians.”
The marketplace gives brands and retailers access to more than 1.5 million active customers on Kogan.com, as well as the retailer’s marketing and online distribution capabilities.
“We’re obsessed with creating a great experience at Kogan.com for our customers and sellers alike,” Monin said.
The marketplace also gives Kogan.com an opportunity to expand its range, reach new customers and increase sales, without having to buy and hold inventory or lose margin to the new low-value GST, which has dampened its global brands business over the last eight months.
The potential for growth through an online marketplace is perhaps best demonstrated by Kogan.com’s rival Catch, which has seen significant success since launching a marketplace in 2017. The former ‘deal-of-the-day’ site now carries nearly two million SKUs and has roughly the same number of active customers as Kogan.com.
According to a UBS forecast reported by the Australian Financial Review in October 2018, Kogan.com currently has a bigger share of the online retail market excluding food in Australia, but Catch, thanks to its marketplace, was expected to leapfrog Kogan.com to grab a bigger share of the market after FY19.
Meanwhile, Catch has been diversifying its offering into telecommunications and financial services, a strategy that Kogan.com has been executing in a bid to meet more of its customers’ needs. Catch last year launched mobile phone plans with Optus called Catch Connect, and recently partnered with Now Finance to offer small personal loans to customers.
Kogan.com has been launching similar services for the past few years and now has a portfolio of insurance offerings, credit cards, internet plans and even superannuation.
The online retailer recently reported record trading during the peak Christmas period, driving first-half revenue to $231.8 million, up 10.6 per cent on the previous corresponding period. Gross profit in the half was $45.1 million, up 10.8 per cent on first-half trading in FY18.