Kogan announced record results for fiscal year 21, exceeding $ 1 billion in gross sales for the first time.
Kogan topped $ 1 billion in gross sales for the first time, outperforming key FY21 metrics, with strong revenue growth, rising 56.8 percent to $ 780.7 million.
In addition, its gross margin increased 61% to $ 203.7 million. For Ruslan Kogan, CEO and founder of Kogan, the retailer is only scratching the surface of its potential. “Even though we’ve just celebrated our 15th anniversary, we feel like we’re just getting started,” Kogan said.
The gross sales growth in July 2021 is 5.1% higher than the previous year, and although the gross margin showed some improvement in June 2021, it is lower than the previous year. The first half of August showed further improvements, with a “strong acceleration” above July 2021; Gross sales are now 24.5% higher than July 2021, and the gross margin has also increased by 25%.
The retailer faced “volatile” and dynamic business conditions with the pandemic, and there had been no increase in consumer demand. This has led to a higher inventory level in the second half of FY21 – to address this, the retailer will invest more in its marketing and promotion activities to support the inventory rebalance.
As such, free traffic accounts for over 66% of all traffic. “Why would you want to start fighting the parking lots and the crowds again?” Kogan told investors.
Kogan Marketplace has been an “outstanding performer in FY21,” Kogan said. Kogan Marketplace’s gross sales grew 91 percent year-over-year, and although still in their “early stages,” they will create “huge benefits” for its consumers and investors, the CEO said. In June 2021, Kogan launched its market platform in the New Zealand market.
Kogan has grown its active customer base by 46.9% in the past 12 months to 3.2 million. Likewise, its acquired New Zealand platform, Mighty Ape, also saw an increase to 764,000 active customers. Going forward, the retailer plans to strategically increase its marketing activities to continue this upward trajectory of the active customer base.
Immediate investment will be made to further expand its customer base, primarily through membership in Kogan First. Its loyalty program has grown to over 120,000 members as of June 30. “Kogan First is more than just free shipping,” Kogan said of the loyalty program. Kogan First members received an average of $ 105 in benefits in FY21, with revenues reaching $ 8.9 million.
“It’s the most incredible loyalty program in the country,” Kogan told callers. “There is no better loyalty program out there.”
Membership benefits increased to $ 12.7 million during FY21. Looking ahead, Kogan plans to reach one million Kogan First members as part of its mid-term goals and will invest more in member benefits to reach this milestone.
The retailer explained that Australian e-commerce is “in its infancy”. Over the next 12 months, Kogan plans to expand its Kogan First membership programs, expand its exclusive brands, and invest more in its Marketplace platform. Kogan will also retain cash for other business investments and for growth purposes. It has also suspended dividends and will not declare a final dividend for fiscal 21 – it’s not meant to be an indefinite decision.
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