2020-04-04 12:03:571970-01-01 00:00:00

Industry News

& Articles

Kogan remains under ACCC’s watchlist

Facebooktwitterlinkedin

The owner of online retail giant, Kogan.com, was warned not to label his firm’s end-of-financial sale a “discount” to avoid landing into legal problems. The Australian Competition and Consumer Commission (ACCC) has kickstarted its case against Kogan.com over misleading offers, which is expected to have subsequent significant ramifications for e-commerce players.

During the hearing, correspondence between members of Kogan’s marketing team was read aloud where team members came to a consensus that they will not label the promotion as a “discount”. Specifically, at one point in time, founder Ruslan Kogan was corrected after he wrote “discount” in an e-mail. Thus, Kogan.com has been accused by the competition watchdog of falsifying a sense of urgency by incorporating advertisements such as “Ends midnight tonight!” and “48 hours left!”.

Regulator barrister, Penny Neskovcin, was of the view that a typical consumer would have comprehended these messages to imply that prices to be reduced were equal to that of prices before the promotion. However, that was not what the firm has done. Instead, Kogan.com was accused of marking up prices by an average of 12 per cent on more than 600 products before advertising an end-of-financial-year promotion code for 10 per cent of back in 2018.

Yet, when the firm’s chief operating and financial officer, David Shafer was called in to be a witness for the case, he did not regard the action to be surprising. Instead, Mr Shafer viewed it to be reasonable given that the firm was overseeing many other promotions concurrently. Kogan, who has a market capitalisation of $375 million, has therefore denied the allegations while asserting that price fluctuations were not rare in the e-commerce industry.

Nevertheless, this isn’t the first time the firm has found itself to be in such a position. Kogan was previously fined $32,400 in 2017 over a Father’s Day promotion and was demanded to edit advertisements in 2009 after the ACCC raised issues over the way the firm displayed price comparisons. The ACCC has since launched legal action in 2019, claiming that the advertising was misleading.

Presently, the firm has been grappling with the outbreak of the coronavirus which originated in China. It warned that the virus could hinder growth in 2020 should factory closures persist, and travel restrictions continue to disrupt its supplies from China. More notably, Kogan is particularly susceptible to the virus as it locates majority of its private label products and third-party brands from China.

Over the course of the past twelve months, Kogan has since introduced Kogan Energy, Kogan Super and Kogan credit cards. Additionally, its results for the half-year ending December 31, 2019, the firm reported revenue of $219.5 million – a 5.3 per cent drop from the previous year, which the firm attributed to a successful launch of Kogan Marketplace. This is because, within Kogan Marketplace, only sellers’ fees are counted towards revenue. Meanwhile, Kogan.com declared an interim dividend of 7.5 cents a share, relative to the 6.1 cents a share compared to the previous period.

By Caroline Wong 

Click here for a 7 days access to our Lotus Blue Portal.

Comment on this company

Latest Stories

Coronavirus Boosts Sales For Fisher & Paykel’s Respiratory Products

As the global coronavirus cases surpassed the 1 million mark, merely 20 per cent among all victims.. …

Kogan.com Benefits As Consumers Resort To Online Shopping

Back in Mid-February, shares in Kogan have slumped after CEO Ruslan Kogan indicated that his.. …

Woolworths Extends Helping Hand To Those In Need

Amid the current pandemic, supermarket giant, Woolworths Limited (WOW) is widely regarded…..

More for you

Austal Limited Plays Critical Role in US National Defence

Australia’s shipbuilder and contractor for some of the most advanced defence vessels has been.. …

Smartgroup Outperforms Despite Industry Headwinds

Salary packaging and administration services company, Smartgroup has been faced…..

Energy and Industrial Services Push Seven Group Higher

In its first-half report, the industrial services and energy sectors outperformed other aspects…..

Link Administration Suspends Earnings Guidance

Link Administration Holdings Limited (Link Group) has finalised its agreement to acquire Pepper…..

Altium Limited On Track To Achieve Goals

Altium Limited, one of ASX ‘WAAAX’ tech stocks along with WiseTech, Afterpay, Appen.. …

Reliance Worldwide Downgrades Earnings Guidance

Back in 2019 when President Donald Trump announced plans to increase tariffs in the…..

KOSEC Terms & Conditions

Kodari Securities Pty Ltd (CAR 399556) trading as KOSEC is regulated by the Australian Securities and Investment Commission (ASIC). KOSEC is a financial services company and any information provided by its platforms, portals, reports and documents is protected by copyright. Any unauthorised production of this information is prohibited.
KOSEC reserves the right to change or remove any information provided on our website, reports or any documents including these terms and conditions at any time without notice. The change or modification to the terms and conditions will be effective immediately upon posting an updated version on our website, necessary platforms and documents. It is recommended that you review the information provided on our website, including these terms and conditions frequently for any changes.

Disclaimer
KOSEC provides general advice only. The information provided is of a general nature only and does not take into account your individual objectives, financial situation or needs. It should not be used, relied upon, or treated as a substitute for specific professional advice. KOSEC recommends that you obtain your own independent professional advice before making any decision in relation to your particular requirements or circumstances. Please make sure you read our Financial Services Guide (FSG).

KOSEC does not guarantee any returns. Past performance of any product discussed is not indicative of future performance. (We urge that caution should be exercised in assessing past performance. All financial products are subject to market forces and unpredictable events that may adversely affect their future performance). Investing in the stock market can incur huge losses. Please also be aware that fees will incur on every transaction regardless of the performance of your investments or returns generated. Employees and or associates of KOSEC may hold one or more of the stocks, securities or investments reviewed by the company.

Your use of information from our website, reports, documents and from talking to our representatives/associates is at your risk. Under no circumstance should the investment be based solely on KOSEC information and general advice. You should seek professional financial planning advice.
KOSEC aims to maintain the accuracy of the data and information provided on this website, by using information prepared from a wide variety of sources, which KOSEC to the best of its knowledge and belief, considers accurate and does not make any representations or warranties of any kind, expressed or implied, about the completeness, accuracy, reliability, suitability or availability of the information provided.

We may at times refer to third parties, which the details of these third parties have been provided solely for you to obtain further information about other relevant products and entities in the market. KOSEC has no control over the information third parties have, or the products or services offered, and therefore make no representations regarding the accuracy or suitability of such information, products or services. You are advised to make your own enquiries in relation to third parties. Our inclusion of any third party content is not an endorsement of that content or the third party.

Fees
As a client you will be charged a yearly service fee and a set brokerage fee per transaction. Your service fee will automatically renew at the end of your agreed 12 month period at the same rate advertised at the time. Your credit card or bank account will be charged for a further year following which will again auto renew until you cancel your yearly service fee. You can cancel the auto renewal at any time in advance of the renewal date by contacting us. KOSEC is aware of the need to ensure the security of your credit card details and our payment systems are compliant with the Payment Card Industry (PCI) Data Security Standard.

Privacy
You consent to receiving email correspondence from KOSEC, as well as companies KOSEC has an association with. These emails will be sent by KOSEC and third party companies. You can opt out of receiving any category of emails at any time by contacting us. We may from time to time inform you of special offers, or even ask your opinion of the services we provide, but your involvement is optional. Should you request us to do so, we will archive your details.

Indemnity and Liability
You indemnify KOSEC from all claims or threatened claims, suits, demands, damages, costs as well as including legal costs incurred in dealing with any threatened claim, expenses made by any person or corporation against KOSEC and any other amounts which is caused by KOSEC providing information, execution and General Advice.

You hold KOSEC harmless and release it from any liability in respect of any loss, harm or damage arising from a decision made by you on the basis of information obtained through the use of our portal, reports, documents or any General Advice given and any transaction taken place.

You hold KOSEC harmless and release it from any liability in respect of any loss, harm or damage arising from delays in executing orders for the client and acknowledges KOSEC makes no guarantees about the time taken to execute an order on behalf of the client. You acknowledge that KOSEC relies on third parties in providing technology and release KOSEC from any harm, loss or damage you may suffer as a result of the failure of such information technology.

Cookies and Links
KOSEC website, and its portal uses cookies, which lets us identify your browser while you are using the site or our portal. Cookies do not identify you personally. They simply allow us to track your usage patterns. If you prefer not to receive cookies, you can configure your browser to reject them or to notify you when they are being used. The functionality of the KOSEC website may be impacted if you restrict the use of cookies.

Fill up the form below and we will get back to you as soon as possible.

CLAIM YOUR FREE E-BOOK &
7 DAY ACCESS TO LOTUS BLUE

STOCK MARKET SUCCESS

KOSEC’s CEO, Michael Kodari’s new book, “Stock Market Success” valued at $39.95, available at Dymocks book stores with all the proceeds going to Dymocks Children’s Charities.

CLAIM YOUR FREE E-BOOK WHEN YOU LOGIN TO LOTUS BLUE INVESTMENT PORTAL

Latest TV Commercial