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Read Ruslan Kogan’s letter to investors in full

Read the letter penned by founder and CEO, Ruslan Kogan, published in the prospectus.

Dear Investor,

Just over ten years ago, when I got the idea to create an online business model that sold private label LCD TVs directly to consumers, not everybody was as enthusiastic about it as I was. As a 23‐year‐old, I approached several business leaders and the overwhelming feedback was that online retail was just for books and CDs and nobody would buy a TV without seeing it in person.

At that point, I realised that in order to get the business off the ground quickly, it would need to be self‐funding and grow organically. Since then, has grown to become Australia’s largest pure‐play online retail website. By focusing on our customers and funding our growth from cash flow, we have been EBITDA positive since inception. has enjoyed strong growth for the past ten years and – up until this point – has never had any external equity funding. I am incredibly proud of’s track record and I believe this sets us apart from our peers. It also speaks volumes about our culture, which is underscored by high levels of personal responsibility, and demonstrates the strength and sustainability of our business.

I believe that has become a challenger brand that stands for price leadership through digital efficiency. Our goal is to make in‐demand products and services more affordable and accessible. We want to ensure that everyone who invests in and becomes a part of our story, believes in our mission, learns about what makes us tick, and understands why we have had 52 million visits to’s core website channels in the past 12 months.

The growth and success of the business is testament to the amazing commitment of the team who work relentlessly to ensure that the expectations of our customers are not just met, but exceeded every day.

We are proud of having assembled the most talented team of thought‐leaders in the local market. But building this incredible team has been far from easy because when we set out to build we were forging new ground. When we decided to develop a shopping personalisation strategy, we couldn’t just place an ad for an “Automated Algorithmic Channel Marketing Specialist”. We were defining these roles just as the local market was defining online retail.

We had to build our team from first principles and look at the core skillsets required for certain roles – no matter what role that person was performing in their previous job. For example, we have a lawyer and engineer driving our IT innovation and a PhD (Engineering and Medicine) in charge of our ERP implementation and automation.

As the market continues to expand and redefine itself, we will continue to evolve, inventing exciting roles the likes of which I hope are always new, always enterprising, and always pushing boundaries.

We often joke that “we’re a statistics business masquerading as a retailer”, but a lot of truth is said in jest. Analytics‐driven decision making is at the core of our culture. Our entire team is obsessed with analysing data to improve the efficiency of our business and drive a better customer experience. We make decisions based on facts, not gut feel. The team and culture has facilitated growth at a rapid rate – transporting us from start‐up to public company over the past decade.

It’s a pleasure to be able to use the Initial Public Offering (IPO) to share some of the company with our key senior management, keeping them incentivised and aligning their interests well into the future. Working with our brilliant team of innovators has been the most rewarding part of my role as CEO.

Incredible teams build incredible things. The backend and operations of the business are a testament to the capabilities of our team. While we think we’ve got an awesome homepage, in the same way that you can’t judge a book by its cover, you can’t judge an online retailer by its homepage. At, some of our competitive advantages include our brand, proprietary technology infrastructure, and operations systems, which we believe to be world class. Just some of the features include:

  • Our Brand. We haven’t just built a leading online retailer, we’ve also built a brand that is synonymous with online retail in Australia. 82 per cent of the traffic to our site is free and driven by our Brand. This is a huge moat around our castle. Our Brand also enables strong partnerships and expansion into new verticals, as we’ve demonstrated with Kogan Mobile and Kogan Travel.
  • Private Label. At inception, was purely a private label business selling consumer electronics. Private Label strategies are at the core of what we do and have been a pillar of since day one. Private Label is a great way to create consumer value through price leadership while maintaining higher margins. Our Private Label strategies have always been driven by our analytical approach which ensures that we allocate capital efficiently to service existing demand. We now have 13 Private Label brands in our stable and there is significant opportunity for us to accelerate growth by expanding the products available within those brands.
  • Private Supplier Marketplace. Many of our third party products are sourced through a proprietary Private Supplier Marketplace. We built a system where distributors and suppliers log in on a daily basis and bid against each other in a blind auction to fulfil our orders. By creating this level of competition on the supply front, we are able to secure better prices and contribute to our price leadership position.
  • End‐To‐End Automation. When a customer purchases one of our in‐stock inventory items (the majority of which consist of Private Label products), not a single staff member has to manually interact with the order. This ensures faster and more accurate dispatch, and happier customers. This automation has driven our very high Net Promoter Score (NPS). In most cases, an online customer is not looking to buy a product and a friend. They just want to be able to quickly and easily place an order, receive the tracking details quickly, and have the item arrive quickly.
  • Algorithmic Prediction Engines. We now have tens of thousands of products on our site. We don’t expect every visitor to scroll through every single product when they get to our site. It’s our job to show the right product to the right person at the right time. The internet is getting noisier, and we’re producing and consuming more information than ever before. I remember when people used to read long news articles that analyse a topic in depth, and now it seems they’re clicking on “12 reasons cats are better than dogs – you won’t believe reason #7”. It’s for these reasons that we have invested in our Algorithmic Prediction Engine. We analyse huge amounts of data on purchasing patterns and behaviour in order to show the right product to the right person at the right time. This improves the customer experience and increases our conversion rates. Our proprietary Algorithmic Prediction Engine integrates with our various marketing channels: Website, Mobile, Email and Apps.

These are just some of the innovations unique to and we intend to keep them coming. We love to compete. Competition drives innovation and it’s never been more challenging or rewarding to be a retailer.

By inference (and experience) that means there’s never been a better time to be a consumer! There are many great retailers out there and we’re all driving each other forward while fighting for every consumer dollar. We love this aspect of our job and it makes us jump out of bed in the morning.

One of the great things about being a retailer is that it’s not brain surgery or rocket science. If we make a mistake in our business – for example, someone might get the wrong item or an item might be delayed in shipping – we’ll know about it pretty quickly and nobody’s life will be at risk. We will continue to experiment and innovate to ensure we always stay ahead of the curve when it comes to using technology to drive price leadership and innovation in online retail.

We make a lot of decisions every day and we get most of them right. But we are human, and occasionally, we get some wrong. We’re not scared to admit when we get them wrong. But in our mistakes there are gems that help us learn, adapt and improve.

The other great thing about being a retailer is that you quickly learn to respect every dollar. A dollar represents our customers’ hard‐earned when it’s in their hands, and our hard‐earned when they choose to exchange it for a product or service.

It’s in our DNA to start new initiatives small, prove their value, and scale them organically in a profitable manner. We subscribe to the philosophy that “revenue is vanity; profit is sanity”. We will strive to strike a balance between short term profitability and investment in long term vision and growth for the company. We are mindful of both short term targets and long term returns for our shareholders, and our decisions will continue to be shaped by the most efficient use of capital. To put it simply, we don’t splash cash.

I would like to thank my business partner and fellow Director, David Shafer. For over a decade, David has been my first port of call when a difficult decision in business or life needs to be made. He has driven many of the critical business growth projects at and been a core contributor to developing our analytics‐based culture. I would also like to thank my family and friends for continuing to put up with me checking my phone hundreds of times a day and walking away from the dinner table to take calls. I live and breathe this business.

Finally, and most importantly, I’d like to thank our customers. We’ve had our critics over the years (which is inevitable when you’re changing the fundamentals of an industry), but ultimately it’s our customers’ feedback that we care about most. It’s our customers that have helped shape to become the retailer it is today.

The way people buy goods and services in Australia has undergone significant change in the past ten years. It’s a wave of change we have successfully ridden, and at the same time, one that we believe we have helped direct. The way we shop today is completely different to how we did ten years ago. I hope to look back and report the same after another decade of growth and innovation for On behalf of the company, we look forward to that journey with our current and future shareholders, as we drive our company and industry into the future.

Thank you,
Ruslan Kogan
Founder & CEO

PS. This Prospectus contains detailed information about the Offer, the industry in which operates and’s historical and forecast operating and financial information.’s business is subject to a range of risks, including reduced growth in the Australian retail market, stagnating or declining penetration of online retail in that market and increased competition. These risks, and other key risks relating to an investment in, are detailed in Section 5. I encourage you to read this document carefully and in its entirety before making your investment decision.

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