Kogan.com’s 38% profit growth shows strength of e-commerce

The ASX-listed company issued a quarterly cash flow statement and trading update, which outlined impressive earnings growth of 37.7 per cent, built largely from a 35.9 per cent surge in revenue.

Its gross margins also ticked upwards to 18.2 per cent for the first quarter of the 2018 financial year, up from 17.9 per cent in the same quarter last year.

Kogan.com is also expecting a strong Christmas trading period, with inventories since the end of June this year rising by $12.8 million.

“We are pleased to deliver a trading update that demonstrates ongoing strong year-on-year growth in revenue and profitability,” the company’s founder and CEO Ruslan Kogan said.

“Our new verticals continue to shine and attract customers … Kogan Mobile had impressive growth this quarter and, in October, celebrated its second birthday with an exceptionally popular promotion. Also, Kogan Insurance is off to a promising start after launching in August”.

However, with global retail giant Amazon due to announce an Australian launch date any day, it remains to be seen whether Kogan.com can sustain this impressive growth with a new rival competing for a slice of the pie.

On the flip side, though, strategies of both players in driving further growth in online sales may help boost the volume of online sales, in a ‘rising tide lifts all boats’ scenario for smaller businesses.