Kogan Marketplace shines despite declines in overall business

Kogan.com's third party reseller platform, Kogan Marketplace, saw an increase in its sellers, sales and revenue despite the overall business posting a sharp decline in profit and revenue in FY2022.  

Kogan Marketplace’s revenue grew 31.2 percent year over year to $30.6 million, and the number of sellers on the platform increased 49.1 percent for the year ended 30 June 2022.

The hybrid marketplace’s 20.3 percent year over year bump in gross sales contrasts with a decline of Kogan.com’s Exclusive Brands' gross sales’ by 14.7 percent year over year to $335.1 million for the year ended 30 June 2022. 

Kogan.com’s three main revenue streams are the sale of products and services through its Exclusive Brands, Third-Party Brands such as Apple, Canon, Swann and Samsung, and seller fees from Kogan Marketplace.

“The continued growth of Kogan Marketplace demonstrates the scalability of the platform and the strong customer and seller engagement achieved to date.” 

The company said it would invest in an advertising platform during the 2023 financial year “for marketplace sellers to gain further reach within the Kogan website.”

Despite Kogan Marketplace’s strong performance, the company reported an overall 9.3 percent year over year decline in profits to $184.4 million, an eight percent year over year decline in revenue to $718.5 million, and gross sales growth year over year of only 0.1 percent to $1.18 billion, for the year ended 30 June 2022. 

Kogan.com founder and chief executive officer Ruslan Kogan said the company overinvested in inventory to prepare for continued, Covid-fuelled online shopping, which did not persist as expected. 

“We were wrong. As the true volatility of the situation settled in — caused by stay-at-home orders and lockdown ambiguity — eCommerce did not continue to grow as anticipated.” 

“This led to us holding excess inventory, and an associated increase in variable costs and marketing costs to sell through the inventory.”

The ASX release also attributed the loss to the $17.0 million cost of paying tranches three and four of its 2020 acquisition of New Zealand-based PC and consumer technology reseller Mighty Ape.