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Kogan Technologies
Company typePrivate
IndustryConsumer electronics, online retail
Founded2006
FounderRuslan Kogan
HeadquartersMelbourne, Australia
Area served
Australia, United Kingdom
Key people
Ruslan Kogan, CEO
David Shafer, Executive Director
ProductsHigh-definition televisions, tablet computers, smartphones, digital cameras, home appliances, digital radios, PVRs, netbooks, Blu-ray Disc players, video cameras, e-book readers
Websitewww.kogan.com.au
www.kogan.co.uk
www.kogan.com

Kogan Technologies is an Australian manufacturer and retailer of consumer electronics devices. The company, founded in 2006 by Ruslan Kogan, sells products direct from Asia to customers in Australia and the United Kingdom.[1]

The company competes on price by selling a budget range direct to consumers, bypassing wholesalers, distributors, and retailers.[2]

This business model and some of the company's advertising tactics have resulted in high-profile controversies.

Kogan projects $100M+ in revenue in 2011-2012,[3] making it one of Australia's fastest growing companies and largest online retailers.[4]

Awards

Kogan have won the following awards:

  • BRW 2011 Fast 100 at rank 27, ranking the fastest growing companies in Australia in any sector and any size.[5]
  • BRW 2010 Fast 100 at rank 15, ranking the fastest growing companies in Australia in any sector and any size.[6]
  • BRW 2009 Fast Starters list at rank 37[7]
  • BRW 2010 Fast Starters list at rank 17.[8][9]
  • BRW named Kogan the 15th fastest growing company in Australia, with 106.74% growth.[10]
  • Australian Retailer's Association Retail Innovator of the Year 2010[11]

LivePrice

On 1 December 2010 Ruslan Kogan unveiled details of a Kogan invention called LivePrice[12] which he claimed was a world first.[13]

Revealed through a press conference in London streamed all around the world,[14] LivePrice is a dynamic price where customers have the opportunity to buy a product well before it is manufactured, for a heavily discounted price. This retail price will increase during the different stages of development and manufacturing until it becomes available to customers at full price.[15]

Kogan claims LivePrice cuts out the hidden cost of finance and gives power back to the consumer, whereas investors who usually fund the production of consumer goods expect a huge return.[16]

After launching LivePrice in Australia, Kogan had sold nearly $330,000 worth of products using the new pricing system in 24 hours.[17]

After being operational in Australia for under three weeks, LivePrice had resulted in over $370,000 of price deductions across the entire range.[18]

LivePrice has a patent pending.[19]

Hong Kong expansion

On 14 September 2011, Kogan began selling complementary products from a range of brands including Apple, Canon, Nikon, Samsung, Motorola and more, claiming to be the cheapest option for consumers.[20] They are shipped from Kogan's Hong Kong operation to customers around the world.[21]

In a statement, the company said:

"We are experts at finding new innovative ways of delivering the latest technology at market leading prices. Whether it is manufacturing our own Kogan brand of products, or now sourcing the World’s biggest brands, we can cut out all the middlemen to guarantee the best prices and service."[22]

United Kingdom expansion

In October 2010 Ruslan Kogan revealed plans for the Kogan business to expand to the UK. He said UK operations would begin in November.[23]

On 15 November 2010 Kogan officially entered the UK market[24] with a range of LED TVs and GPS units.[25]

Soon after, Ruslan Kogan announced a stunt to sell LED TVs on eBay starting at one penny.[26]

The expansion makes Kogan the only Australian-owned international consumer electronics brand.[27]

In July 2011 Kogan attacked high street retailers John Lewis and Currys for selling expensive HDMI cables to UK shoppers.[28]

Both retailers responded through UK media outlet PC Pro.[29]

The disagreement continued when Kogan posted on its blog:

"This appears to be massive hypocrisy by Currys and John Lewis and nothing more than a scam."[30]

Controversies

Apple vs. Samsung

Kogan began selling the Samsung Galaxy Tab 10.1 in September 2011. The Sydney Morning Herald reported that:

"Apple demanded Kogan immediately cease all sales, importation and marketing of the Galaxy Tab 10.1, refrain from selling it in future without Apple's permission, deliver all remaining stock to Apple and reveal complete details of who supplied Kogan with the products.

Kogan pulled the product from sale and agreed not to sell it until the patent dispute between Apple and Samsung was resolved. But it has refused to hand over any further information."[31]

David Shafer, Kogan's executive director, said in a statement to Fairfax Media: "There is a fine line between legitimately enforcing your intellectual property on the one hand, and just trying to stifle competition on the other - in our view Apple is very precariously walking that line."[32]

On 30 November 2011 the Federal Court overturned the injunction on the Samsung Galaxy Nexus Tab 10.1[33] Kogan began selling the product again soon after. Delimiter reported that: "Kogan have already started selling the handset, ahead of any planned Australian launch by Samsung itself or any mobile carrier partners." [4]

UK Cable Con

In July 2011 Kogan launched its 'Cut the Cable Con' Campaign in Britain,[34] targeting John Lewis and Currys,[35] claiming "...it’s extremely unfair for someone who shells out their hard-earned money on a new TV to be shafted on cables and accessories because of a deliberate misinformation campaign by the big retailers."

TechCrunch said:

"One Australian retailer is fed up with their fellow electronics stores’ habit of trying to sell expensive cables with new TVs and computers, and has decided they’re going to show them by just giving the cables away."[36]

Britain's Daily Mail published responses from the targeted retailers:

"A spokesman for John Lewis said: ‘Each of our HDMI cables offers excellent quality and value for money, and by providing our customers with a range of different cables which offer different specifications we are able to help them find one to suit their specific needs, with features such as different cable lengths, ultra-slim and high-speed.’

A Currys spokesman added: ‘Our entry-level HDMI cable is currently on sale at £7.99 and our most expensive cable is at £100.99."[37]

Speaking to the BBC, Ruslan Kogan responded:

"I think it's a bit misleading what they've said. When it comes to durability, it's an HDMI cable that you'll use to connect your TV to a Blu-ray player, or a Playstation, or another device. You're not using it as a skipping rope or to go rock climbing with."[38]

Divorce from traditional retail

In August 2011 Ruslan Kogan announced his desire for online retailers to be viewed separately from traditional retail by economists:

"Many economic commentators are today claiming that Australia is in a two speed economy – given the strong mining sector, and the purportedly slow retail sector. But Kogan is not an ordinary retailer – we are online only, and online retail is booming. Why do economists assume that online retail and traditional retail are married – grouping them together under the one family? If we have been grouped with traditional retailers, then we want a divorce!"[39]

Speaking to MTR Radio, he said "We've got two very different types of retail going on in Australia at the moment. We've got the traditional retail and bricks and mortar and then on the other side we've got online retail. And online retail is steaming [ahead] and growing at a very, very fast pace. It's where all the innovation is, and we've got some great companies in Australia that are doing it really well, and they're experiencing huge growth month on month like Kogan is. The other side of retail is reporting a slowdown and I think it's a bit unfair the way the retail sector is being reported at the moment".[40]

Business Magazine BRW noted the similarity of the "divorce" to a campaign by NAB.[41]

Website glitch

On 10 August 2011, Kogan's Australian Online store experienced a glitch allowing shoppers to incorrectly combine special promotions,.[42] Ruslan Kogan claimed:

"We know we could hide behind our terms and conditions to get out of having to honour these transactions. But, we believe the bug in our website was entirely our responsibility, and as a result will be honouring every single purchase made this morning at a significant cost to our business."[43]

The error cost the company nearly $50,000.[44]

Australian government set-top box scheme

In May 2011 the Australian Government announced a plan to provide set-top boxes to pensioners free of charge.[45]

Ruslan Kogan and other leading retailers slammed the scheme for spending far too much. The program has an estimated cost of $308 million, at over $350 per installation.[46] Ruslan Kogan said Kogan Technologies would be able to deliver it for $50 million.[47]

In February 2012 new figures revealed that costs per installation were growing to $698.[48]

Ruslan Kogan made public statements further attacking the Government's inefficiency in spending.[49][50] He was interviewed by radio stations 2ST[51] and MTR[52] to discuss the new figures.

Apple

At a technology media conference in Queensland, Australia, Ruslan Kogan revealed that he had been told 30% of Australian retailer JB Hi-Fi's revenue in 2010 had come from Apple or Apple related products. He said this meant some of the country's biggest retailers were too reliant on the success of Apple for their own survival.[53]

Terry Smart, CEO of JB Hi-Fi, responded by saying "That figure is not even close to reality. We don't have a big enough supply that represents such a substantial part of the business."[54]

JB Hi-Fi

Ruslan Kogan then bet Terry Smart, the CEO of JB Hi-Fi A$1,000,000 that they would not stock Apple hardware by 14 March 2014.[55] The deed for the bet is still available online, though it has not been accepted.[56]

In March 2011, Kogan began giving away free HDMI cables to anyone who had bought a TV from JB Hi-Fi in 2011.[57] This was, Kogan said, a bit to expose that "JB are trying to trick people into thinking they need a $200 cable after buying a FULL HD TV. This is simply not the case."[58]

At the JB Hi-Fi Annual General Meeting in October 2011, a JB shareholder claimed consumers were "being screwed," when responding to the comment, the chairman and CEO of JB Hi-Fi acknowledged the "challenging conditions" they face due to the cheaper prices online.[59]

In October 2011, Kogan took out a full page ad in Australia's biggest newspaper calling for JB Hi-Fi to change their slogan, "Always Cheapest Prices."[60] JB Hi-Fi did not respond to the challenge.[61]

2009 advertising controversy

In April 2009 the company was ordered by the Australian Competition and Consumer Commission (ACCC) to modify its advertising, after it was accused of possible misleading conduct. The ACCC stated that price comparison's in the retailer's advertisements in the Herald Sun newspaper and on its website may have misled customers, and the ACCC's chairman Samuel said the advertisements may have breached sections of the Trade Practices Act 1974. In response, Kogan Technologies agreed that it would not advertise its products at a discount unless that product had been advertised for sale at a higher price, that it would implement a trade practices law compliance program, and that it would not make representations about the savings available to consumers unless the basis by which those savings are calculated was also stated.[62]

Ruslan Kogan vs Harvey Norman

In 2010 founder and CEO of Kogan Technologies, Ruslan Kogan, challenged well known Australian retailer Gerry Harvey to a televised debate.[63] The ensuing "War on cheap TVs"[64] declared by Harvey generated significant national media attention, including much discussion from within the media and marketing fraternity.[65]

The dispute erupted when Ruslan Kogan challenged Gerry Harvey to a debate on national TV, which he declined.[66] Ruslan Kogan claimed Gerry Harvey "chickened out".[67] Gerry Harvey replied by calling Ruslan Kogan a "con" in an interview with a national newspaper.[68]

Kogan responded with two satirical advertisements, criticising Harvey Norman.[69]

In December 2010, Gerry Harvey announced plans to follow Myer and open up an online store based in China in order to avoid GST and cut costs.[70]

Kogan responded by claiming that Harvey Norman and Myer were only posturing to force the Government to change import laws,[71] and that their China-based stores were a complete hoax.[72]

Ruslan appeared on Australian breakfast TV show Sunrise (TV program) claiming Harvey Norman was "full of it."[73]

In July 2011, Ruslan Kogan came to the public defence of Gerry Harvey when he came under fire for Harvey Norman's alleged logging practices.[74] In a public statement, Ruslan Kogan said:

Like him or hate him, Gerry Harvey is not a criminal – he should not be singled out for some supposed moral crime simply because he has complied with the law, and has sought Australian timber to use in his furniture. If anything, the use of Australian timber likely keeps more Australians in jobs, and puts bread on the table for many families.[75]

Free TV offer

On 1 September 2011 Kogan Technologies announced that any Australian shopper who finds a lower advertised price at either JB Hi-Fi or Harvey Norman on LED or LCD TVs would get an equivalent Kogan TV for free.[76]

Product range

Televisions

High Definition LCD televisions and LED televisions make up the bulk of Kogan Technologies' products.

Because Kogan Technologies sells direct to customers through its website, customers are unable to see and feel the product before making a purchase.

Kogan 3D TV series

Kogan has a history of asking their customers what they want the company to manufacture and stock. [77] Based on the response for 3D TVs,[78] Kogan unveiled a range of TVs with active and passive technology.[79]

Kogan Agora laptop powered by Google's Chromium OS

On 17 June 2011, Kogan released the world's first laptop featuring Google's Chromium OS, beating Samsung, Acer and other brands.[80]

It is yet to be reviewed by a well-known media outlet, however some customers have begun posting impressions online.[81]

PC Advisor awarded the sister laptop, the Kogan Agora Pro, 4/5 stars, saying that: "This Kogan Agora PRO 'ultraportable' is basically a netbook – but a netbook with a difference. It looks smart, feels quite solid and runs the Ubuntu operating system with ease."[82]

Kogan Agora tablet range

In October 2011 Kogan Technologies released their 8" and 10" tablets powered by Android.

Kogan Portector

Kogan Technologies voiced its opposition to the Australian government's proposed Internet filter by releasing a fictional parody product, the Kogan Portector on 17 June 2010.[83]

Kevin 37

Kogan Technologies received media attention when it marketed a 37" television using the Australian Prime Minister Kevin Rudd's 2007 election campaign playfully, dubbing it 'Kevin 37' initially selling at the price of $900.00, the value of the economic stimulus payments made to many Australians in April 2009.[84][85]

Digital Internet radios

Kogan Technologies sell two models of Digital Internet Radios, a standard and deluxe model.

Kogan Agora

In 2008 the company announced it would be the second company in the world after HTC to release a mobile phone compatible with Google's operating system, Android.[86][87]

Months after the initial announcement, founder Ruslan Kogan announced that the phone would be delayed indefinitely.[88][89] No further announcement has been made.

Later Kogan released a series of tablets based on Googles Android operating system.

Kogan Agora netbook

Kogan announced the intention to sell Australia's "best value netbook in the market" in March 2009; the design and specifications were chosen after extensive community feedback through the Kogan online blog.[90] The product was well received by some reviewers,[91] but was noted by other reviewers for below-average wireless performance and shorter battery life than comparable models.[92]

Blu-ray player

In March 2007 Kogan Technologies released Australia's cheapest Blu-ray player.[93] It was also one of the first Blu-ray devices in the world to offer region-free playback. However, the unit requires constant, though simple, region swapping via the remote when going from region A to B and vice versa.[94]

Kogan financial results

Sales at Kogan's online store in November 2011 were $8.12 million, up 330% from $1.89 million in the same period in 2010.[95] During the period there were 708,525 visitors to Kogan.com.au, an increase from 222,411 the year before.[96]

In October 2010, BRW ranked Kogan as Australia's 15th fastest growing company with yearly revenue of $12.22 million.[97]

The company released Q1 FY11 growth figures,[98] with revenue up 48.12% on the previous quarter.[99]

Kogan Lifestyle

In a November 2010 interview, Ruslan Kogan revealed that he had begun plans to create a Kogan sub-brand, Kogan Lifestyle, that would sell jetskis, boats and potentially cars through an online store.[100]

Appliances

In August 2010 Ruslan Kogan revealed in an interview with retailing news site Current that the Kogan range would soon expand to include a vacuum cleaner, automatic coffee machine, and microwave.[101]

Kogan launched their home appliance range with two convection microwave models, an automatic coffee machine and a vacuum cleaner.[102][103]

Channel 7's Today Tonight program tested the Kogan Convection Microwave Oven[104] on 16 December 2011.[105]

References

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  2. ^ "Entrepreneur cuts TV middle men". The Sydney Morning Herald. 27 March 2007.
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  5. ^ [1] BRW Magazine. Retrieved November 2011.
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  97. ^ http://www.kogan.com.au/media/uploads/20101028_brw_fast_100_kogan.pdf
  98. ^ http://www.itwire.com/it-industry-news/market/42810-kogan-announces-record-sales-growth-disses-gerry-harvey
  99. ^ http://www.dynamicbusiness.com.au/articles/articles-entrepreneur-profile/kogan-growth-gerry-harvey-2172.html
  100. ^ http://www.current.com.au/2010/11/01/article/Kogan-Lifestyle-to-sell-boats-jet-skis-and-maybe-cars/OGRNFMUJNN.html
  101. ^ http://www.current.com.au/2010/08/25/article/Watch-out-Dyson-Kogan-set-to-invade-the-small-appliance-space/CUICWZNAAI.html
  102. ^ http://www.gizmodo.com.au/2010/09/kogans-home-appliances-now-available/
  103. ^ http://www.startupsmart.com.au/sales-and-marketing/2010-09-29/kogan-escalates-battle-with-harvey-norman-with-new-range.html
  104. ^ http://www.kogan.com.au/shop/25l-convection-microwave-oven/
  105. ^ http://www.youtube.com/watch?v=jxBJaHqp9jc&feature=youtu.be

Official website

Official website

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