From the family with only A $90 immigrants to the top of the Young Australia Rich list.
The Australian version of Jingdong, which continues to grow strongly in the controversy, is the second Amazon? Equity investment analysts seem to be less optimistic.
preface
One e-commerce company yesterday released extremely strong sales growth figures for the previous quarter and a business plan to expand the range of products sold against the backdrop of the overall downturn in Australia`s retail industry.
As soon as the news was announced, the company`s share price soared nearly 20%.
Kogan.com stock price changes April 18
The e-commerce, which has more than 8 million active users and has a market capitalization of 500 million Australian dollars, is also known as "Australian version of Jingdong"-Kogan..
Interestingly, it seems to resemble the fate of Liu Qiangdong, founder of Jingdong, and Ruslan Kogan (Kogan, founder of Kogan, who started a self-made venture from the "grass roots" of nothing.
In fact, at Year Nineteen Eighty-nine, when six-year-old Kogan came to Australia with his family from Belarus, his parents had only A $90 in their pockets and could afford to live in government`s "cheap public housing".
But in 2011, 22 years later, Cogan was Australia`s richest young man.
Ruslan Kogan
Although the company does not have a flow boost like Jingdong`s "milk tea sister", it still does not prevent its exposure in Australia-even though most of it is negative and "bad".
The New South Wales Fair Trade Commission, for example, recently put Kogan at the top of customer complaints.
In February 2019, the New State Fair Trade Commission registered 72 complaints about Kogan, of which 11 were recorded by its brand, Dick Smith. According to statistics, the number of complaints involving Kogan accounted for 17.5% of the total number of complaints, more than Apple (Apple) ranked first.
And in these almost never-ending skepticism and critical arguments, consumers and investors who are "at odds" are comparing the Australian version of Jingdong with the seemingly ordinary and legendary founder. Step by step to push the capital market to the forefront of the storm.
From a family with only A $90 immigrants to the top of the Young Australia Rich list
The story begins with Year Nineteen Eighty-nine, the Kogan family`s decision to leave Belarus.
Belarus, at that time, was still part of the pre-Soviet Union that had not yet disintegrated.
The Chernobyl nuclear power plant accident in neighbouring Ukraine three years ago has become a trigger for a total loss of confidence in the Soviet Union government. Some parts of Belarus were also affected by the accident because of the relationship between wind direction and terrain.
Chernobyl Nuclear Power Plant
"I thank my parents for bringing me to Australia," Kogan said in a subsequent interview. If I stay in Belarus, I may also need to post pictures of the president on my website. And in Australia, I don`t need a picture of the Australian Prime Minister at all. " He said with a grin.
He recalls that in the city of Babruysk, where he was born, everyone`s life was a similar gray. "everything in Belarus is controlled by the government, the media is censored, there is no Nintendo-even eating bananas is a big deal."
One view of the Babruysk block
Although his parents were both highly educated in Belarus, they decided to come to Australia with leave. When we first arrived in Australia, the whole family was stretched. His father never seemed to have taken a day off, Cogan said, and his mother even needed to work as a janitor during the day and at night as a waitress.
His parents` efforts to make a living in Australia also strongly influenced Kogan.
"she is a person who is constantly challenging the status quo and breaking the line," Kogan said, adding that his mother always urged him to do more, work hard and be a better person.
For a while, his mother even knew that every product that was first displayed on Kogan.com was a low-cost TV set imported from China, chosen by Kogan himself.
Today, the 12-year-old website has nearly one hundred thousand products, and the mother and child, who used to do it in person, have to leave their work to someone else.
Koegan`s business consciousness enlightened, starting with a golf ball.
On his way to tennis training, as he walked along the fence of the local golf course, he noticed some discarded golf balls near the fence.
After that, Kogan also noted that at the boutique, the price of secondhand balls was A $2.
So he picked up the balls, shoved them into his tennis bag, and took them home and cleaned them up. Over the weekend, he went back to the course to sell the ball to golfers at a $0.50 each. The business gives young Kogan between A $20 and A $30 a week.
Kogan`s real first "start-up" came when he noticed a $40 car wash ad near his home.
Kogan, who had washed his parents` car for A $5, knocked on a neighbor`s door and asked if he was willing to pay A $15 to wash his car. Soon he bought a pressure hose and sponges and opened his car wash business.
Every weekend, he recruits from the apartment building. He told them how to clean the car and sent them to do business. Kogan even realized the importance of "after-sales service": after the end of the business, he would call his customers to make sure they were satisfied.
He was only 12 years old.
In addition to his business talent, he also showed an early fascination with technology.
At the age of nine, he finally persuaded his father to buy cheap parts and put together a computer himself. Every week, he goes through the computer ads in the Times Green Guide magazine. In addition, he can repair mobile phones, design websites.
Although Kogan`s heart does not agree with the university`s education system, he has been admitted to Monash`s business school with outstanding grades.
"the digital world is growing so fast today that when everything is unified, it`s an old message," he said.
In fact, there has never been formal training in various institutional organizations within Kogan; Kogan believes the answer to the question can be found at Google.
"formal training is for those who want to look like they are studying," says Kogan.
Google is for those who really want to learn. You don`t have any skills you can`t learn these days. You can find everything online anyway-just type it into Google. "
As a college student, Kogan also briefly worked for some big companies-Bosch,GE,Telstra. But I always felt that it was not as good as it was supposed to be.
Until the age of 23, a "grand idea" was born.
Kogan, who wanted to buy a LCD TV at the time, found that Australian TV was very expensive while walking around the street. He surveyed Chinese manufacturers and found that the actual cost was only 1/3 of the Australian market price.
As a result, the idea of a discounted online TV retailer was born.
In this way, Kogan "alone" in his parents` garage, unswervingly opened the door to his e-commerce business: Kogan.com.
But his first hurdle was getting Chinese manufacturers to accept such a relatively small order.
Kogan won their support by reworking the company`s poor English promotional materials.
After solving this problem, another obstacle is the payment of money to manufacturers to book Kogan televisions. He almost ran out of his credit card, and even his friend`s credit card.
Kogan has been practicing a basic business philosophy: controlling what you can control.
He went to Shenzhen, south of China, to check the TV himself and turn on each to make sure it worked.
He would watch the goods go to the truck and then take a taxi to wharf.
"at that stage, my career was very dangerous, and I had to personally make sure everything went well," he added. "so everything went well."
In fact, Kogan started with electronics and is very similar to Amazon in the variety of products it sells. Today, the site sells a variety of products, including mobile phones (about 10 percent of the company`s profits), kitchen equipment, drones and sofas, health insurance and camping supplies.
"in the 2018 Youth Rich Australia list, 35-year-old Kogan became Australia`s 12th richest person under 40, worth about A $395 million."
In fact, before this, he has been under the age of 30 years in Australia`s list of rich only for many years.
Once he had to ask his parents for extra pocket money for snacks as a child, he didn`t hesitate to pay a A $ two hundred thousand deposit to become the first space tourist from Australia to take part in Richard Branson`s Virgin Galactic space flight program.
Richard Branson
"when I heard about Virgin Galactic, I was immediately in awe of Branson`s goal."
"the United States and Russia have spent A $500 billion on sending 498 people into space," Kogan added. This is equivalent to more than 1 billion Australian dollars per astronaut. Branson charges only 1/5 of that figure. "
2. The Australian version of Jingdong, which has maintained strong growth in the controversy
Kogan`s performance is booming every year.
According to Wall Street Weekly, Kogan`s annual turnover growth rate was between 200 percent and 300 percent between 2006 and 2014, according to Wall Street Weekly.
According to the company`s latest financial report from IBIS World, after 2015, although the increase in turnover was relatively slow compared with the previous period, the annual growth rate of after-tax net profit has reached a staggering 27.7% (2018) over the past two years. And 362% (2017).
Turnover and after-tax net profit of kogan.com for 2015-2018
In March 2016, Kogan acquired the online business of Dick Smith (Dick Smith) Holdings, a physical store that closed and transformed into an online consumer-only e-commerce company. In July 2016, Kogan was listed on the Australian Stock Exchange.
Although many retailers have struggled to match Amazon`s official arrival in Australia in 2017, Kogan.com reported profit and revenue growth in February. In addition, the company added two hundred thousand customers.
But business growth at the same time, and it is also accompanied by the accumulation of customer complaints.
The most important is the quality of the product, as well as delivery time, refund and warranty issues.
On the Australian product review website Product Review, similar "complaint maintain legal rights posts" are often seen:
"it`s basically theft, terrible customer service, total disregard for Australian consumer law, and basically fraud," wrote a user named "h789." He bought a faulty drone device on the site and went through unpleasant maintenance negotiations with Kogan and manufacturers.
A user named "Wondersar" also went through a very painful and lengthy process of negotiation-after the problem had not been resolved, he spoke on the website, "terrible customer service: I bought a faulty Intel mini-computer."
In addition, the Australian Competition and Consumer Council (ACCC) had found that there was a "fraudulent price reduction" behavior, Kogan has also lost a wave of popular.
As part of the 2015 Fathers Day promotion, Kogan advertised in its eBay store that consumers would receive a 20% discount if they purchased the following computer monitors between August 24 and 29, 2015:
- Kogan 27” Cinema Display WQHD;
- Kogan 28” 4k LED Monitor;
- Asus 27” LED Monitor PB278Q.
But in fact, the discount, which seems to have been concessionary, has been "fully hydrated":
Before the promotion began, Kogan raised the price of three computer monitors in eBay stores. As a result, consumers receive a 20 percent discount on the new price increase, but are actually only 9 percent below the previously announced price of three computer monitors. At the end of the campaign, these prices have instead been adjusted to their previous lowest prices.
Dr Michael Schaper, acting chairman of ACCC, said, "it is totally unacceptable for companies to secretly raise prices before discounts are offered. This is done to give consumers a misleading impression that they are getting more discounts than they really are. "
Kogan also paid the price for the smart discount: a fine of A $32400.
Despite the Kogan scandals, it is clear that many consumers "say no in their mouths but honest in their bodies":
"the number of active consumers on the site rose 23 percent in nine months to 1.59 million, according to the latest figures."
The second Amazon? Stock investment analysts seem to be less optimistic
Uber has put aside its rhetoric to be Amazon in the transportation industry. (click to read from thwarting regulators to sweeping the Australian Market: the Battle of Australia for the Uber Empire).
Last month, Kogan, which had previously been self-employed, introduced a third-party direct shipping model similar to Amazon`s. Kogan no longer had to switch hands, but directly docked customer channels from third-party buyers.
Lazar Monin, marketing director at Kogan, said many major retailers and brands had signed up and increased the number of products on the site to more than one hundred thousand. These include Microsoft (Microsoft), Gucci (Gucci), Braille (Breville), Lego (Lego), Gillette (Gillette), and Philips (Philips).
Microsoft Surface Pro
After joining broadband, travel, car, home and health insurance and mobile phone products, Kogan.com recently introduced two more categories-cars and electricity bills-and said it would soon offer credit cards and pension.
In fact, Kogan has partnered with Eclipx Group, a listed company that manages auctions of vehicles, and says it will get new cars from dealers across Australia at competitive prices and allow customers to trade used cars freely.
According to Canacce Genity analysts, consumers can submit a new car they want to buy, and Eclipx will negotiate with multiple dealership groups to reach the best price.
The "Kogan tariff comparison" is a utility that allows customers to upload existing bills to see if there is any room to save. Kogan will draw commissions from them.
As competition from Amazon, eBay and Catch continues to intensify, these new products and services will also focus on increasing the relevance of Kogan to the three hundred thousand daily active users on the site.
But it seems that equity analysts are "not convinced" of these hot strategies.
"indeed, we think Kogan is a selling point," said Matt Booker from Spheria. They did a good job, you know, build up the business, but they`ve accumulated a lot of inventory. Their cash flows are weak and their returns are low. Although the stock price has recovered a lot, we actually think people should consider selling their shares. "
Roger from Montgomery Investment Management
Montgomery commented, "I don`t think Kogan`s business is structurally sound. After all, it is competing with much more powerful Amazon. Amazon has just hired another 500 people and is getting stronger. However, every time Kogan announces a new project, the `key people` sell their shares. It`s telling you something. "
No matter how bad the environment is, there are always people who make money.
Jack Ma once said, "many people say retail is hit, retail can not do well." I say retail is doing well, but we have to think of more innovative ways to use new technology, how to make consumers have a better experience, how to improve the overall supply more effectively, the entire management, and make it more rapid to adapt to consumers. "
He said that "who destroys, defeats, challenges who" is not the goal, but that the "new retail" model is to drive offline, through unique online technologies, data, innovative methods, and physical strengths.
