Amazon block ‘predictable’: Ruslan Kogan

Ruslan Kogan says the US retail giant’s decision was always likely, as he announced a foray into the whitegoods market.

Ruslan Kogan.

Australian online retail mogul Ruslan Kogan says Amazon’s US block was predictable, as he announced a move to take on JB Hi-Fi and Harvey Norman in the local whitegoods industry.

The ASX-listed firm said today it signed logistics and supply agreements that would allow it to offer fridges, washing machines, dryers, dishwashers, ovens, cooktops and rangehoods, items CEO Ruslan Kogan said were ‘must haves’ for every household.

In Australia JB Hi-Fi and Harvey Norman own nearly the entire market, and according to Mr Kogan the industry is crying out for more competition from a more efficient business.

“This is an industry in Australia that has lacked competition, its been controlled by a few big players and people are paying too much,” he told The Australian.

“Until now the brands operating in this space have been very scared of the incumbent players, so very few companies have had supply of these products. And it is an industry that brings with it additional complexity; bulky goods are harder to deliver, and require much larger logistics footprints than for example smartphones or LED TVs.

“We have an incredible track record with larger home appliances and we think our business model of price leadership through digital efficiency applies very well here.”

He added the new range would be available towards the end of the year.

Rules around GST are set to change from July 1, with the tax currently on charged on items bought from overseas and shipped to Australia if they’re worth more than $1000.

Amazon has reacted declaring it will block Australian users from using its US portal, and Mr Kogan described that as a predictable move.

$9.80 Kogan closed up 68¢ p

“There is additional complexity now for international platforms like the eBays and Amazons to be able to service the Australian market and give Australians more choice from around the globe,” he said. “I’d say it was a predictable change but ultimately Aussies now have less choice.”

The CEO said his business should not be strongly affected so long as the rules were the same for everyone.

“It was a political change, and the way I operate is you tell us what the rules are and we’ll play by the rules,” he said.

“Business people face an election every day of the week, consumers are deciding whether to buy from Kogan or somewhere else. We have an incredible business where thousands of people will make that choice today to buy from Kogan.

“Politicians face elections every four years, so they have a different time hozrion in their decision making.”