Kogan and JB Hi-Fi thriving after Amazon’s arrival

JB Hi-Fi is one of the retailers that’s actually thriving since Amazon opened in Australia. Pic: Peter Wallis

Amazon opening its doors in Australia was meant to be a milestone for the local retail market.

And it has been significant, but not in the way many expected.

Two local companies — Kogan and to a lesser extent JB Hi-Fi — have quickly displayed an ability not just to survive, but to thrive in the new era.

The two brands represent the two arms of retailing — offline and online.

JB Hi-Fi is primarily a shopping chain competing on the back of in-shop customer assistance.

Newly-listed Kogan is a pure play online retailer winning on nimble pricing and logistics.

As two of the better managed companies in retail, investors might have expected some resilience from both operators in the face of what was billed as the biggest event for retail in decades.

But few would have guessed the share price of both stocks would be ignited once Amazon finally hit our shores.

JB Hi-FI is up 25 per cent since early December at $28.82, but it’s the online “e-tailer” Kogan which has been transformed by the arrival of Amazon.

Kogan shares are up about 60 per cent in two months as investors nominate the early winners in the Amazon era.

Analysts suggest the very presence of Amazon means local shoppers will become much more discerning, with a better ability to compare prices.

Kogan, as the new kid on the block in e-tailing, has been perfectly placed. It listed in early 2016 at $1.80. Today it is worth $6.80.

According to Kogan’s CEO Ruslan Kogan — who came to national attention when he bought the online operations of the former Dick Smith — Amazon can enter a market and stand alongside the best retailers, but not knock them out.

He constantly cites Amazon’s presence for more than a decade in the UK, where retailers such as John Lewis have thrived.

Ruslan Kogan, founder and CEO of Kogan

In contrast to some of the ominous warnings about Amazon from large retailers like ex-Wesfarmers boss Richard Goyder, who famously said Amazon will “eat all our breakfasts, lunches and dinners”, Ruslan Kogan has been on the front foot welcoming Amazon as an information service for shoppers seeking clarity on prices.

As the profit numbers improve for Kogan, iconic department store chain Myer is an early loser, with worse-than-expected numbers emerging from the department store group at the end of last year.

Adding insult to injury, Kogan is now bigger than Myer.

As it stands today after the January run up in its stock Kogan is worth $641 million and Myer is worth $533m, and that relationship is unlikely to change any time soon.