Online retail entrepreneur Ruslan Kogan has outlined an aggressive growth strategy that he says will lead to better deals for shoppers in electronics, travel, mobile and other products.
In an interview with The New Daily, the founder of online shopping website Kogan.com said he was looking forward to accelerating his plans following the $50 million initial public offering of Kogan on the Australian Securities Exchange early next month.
“The IPO will help us accelerate the growth of the business, which means our buying power will increase and we will become more efficient. This will result in more competitive prices and better deals for consumers,” Mr Kogan said.
In selling down part of his stake in the business, he and co-founder David Shafer will each take home $7.5 million from the share market float.
But Mr Kogan said most of the IPO proceeds will be funnelled into the business to create more opportunities for online shoppers.
“The majority of funds raised will be used for growth capital, including investment in new products and categories as well as marketing,” he said.
“We will use the capital to expand our strategy of assessing exactly what consumers want and delivering it to them at the best price.
“We’re a business that aims to deliver great value on the most in-demand goods and services – we’ll now be able to do more of that for more people.”
Expanding the range
Mr Kogan said a key plank in the group’s expansion program would be the development of Kogan’s private label product offering.
This, he said, would lead to an increase in buying power with the group’s suppliers and manufacturing partners.
“While most consumers identify Kogan.com with electronics, we have been operating in a number of categories for several years,” he said.
“Some of our categories include amazing deals on outdoor and camping, tools, homewares, pet supplies, travel accessories and more. Our analytics tells us there is significant opportunity to further develop our range beyond our current offering and this will be our focus.”
But Mr Kogan said it is ultimately the group’s customers who will dictate what Kogan’s product range will look like in the future.
“We don’t tell customers what they want,” he said. “We are there to meet their needs. Our ultimate goal is to increase the chances of converting any visitor into a customer.”
In that regard, he said it was important to offer both third-party branded products such as Apple as well as private label products.
Kogan’s travel and mobile plans
Mr Kogan said that having built up a loyal and engaged fan base over the past decade, Kogan had ample scope to expand into other areas.
“Our extremely active, engaged and large user base allows us to explore opportunities in other verticals while keeping to our principles of price leadership through digital efficiency,” he said.
“Having a strong brand and user base also enables us to make new initiatives successful very quickly.
“While Kogan Travel and Kogan Mobile are both in their infancy, they have both had strong growth and we believe there is significant growth potential, both through increasing our market share and also through growth in those markets.”
Mr Kogan added that through the integration of the Dick Smith online business, Kogan was now able to leverage an iconic Australian brand and interact with a new group of members.
Is Kogan the next Alibaba?
On whether Kogan could replicate the success of the global online trading portal Alibaba, Mr Kogan said his focus was to “increase our lead as the number one pure-play online retail website in Australia”.
“While we have had strong organic growth over the last decade, we look forward to releasing the capital constraints in the business to accelerate growth.”