Kogan pushes head first into online grocery sector

Posted by AFN Staff Writers on 2nd February 2015
Kogan pushes head first into online grocery sector
Kogan pushes head first into online grocery sector

Australia’s biggest online retailer, Kogan.com, has launched Kogan Pantry, a new online grocery service which it said will offer Australians groceries at cheaper prices.

Kogan Pantry is launching with over 600 products from some of the world’s most popular brands available at heavily discounted prices. Kogan said savvy shoppers will be able to save “over 80 per cent” and have their groceries delivered directly to their door.

Kogan Pantry includes a wide range of groceries and household items such as food bargains, health and beauty, pet food, toiletries, confectionery, cleaning, and more. As Kogan has done with many other categories, it is cutting out the middlemen to ensure supply-chain efficiency and the absolute lowest prices possible.

David Shafer, Executive Director of Kogan.com, said it was an exciting expansion for the company and a “great win” for Australian shoppers.

“We are bringing our years of experience in online shopping to grocery and pantry items, delivering Australians amazing prices well below average retail prices,” Mr Shafer said. “Kogan.com is famous for quality products at massive discounts and our aim is to bring those same savings to a core range of everyday household items and non-perishable groceries,” he said.

Taking on the major retailers

On a sample basket of 20 popular items, Kogan said Australians would save “over 50 per cent” when compared with supermarket giants Coles or Woolworths.

“For far too long Australia has had to put up with a supermarket duopoly,” Mr Shafer said.  “In 1975, Coles and Woolworths accounted for just 34 percent of the market, by 2009 that share was up to 78 percent. While Coles and Woolies certainly offer a fantastic selection of products, and are an important part of the Australian economy, the Aussie duopoly also has some of the highest profit margins of any supermarkets in the world,” he said.

“The Aussie supermarket duopoly has double or triple the margins of international peers like Tesco, Costco and Carrefour,” Mr Shafer said. “Through smart sourcing and efficient online retailing, Kogan.com wants to provide a better offer for Aussies, ultimately saving them money,” he said.

Mr Shafer said Kogan Pantry had secured “fantastic deals” on products from leading grocery brands such as Dove, Colgate, Palmolive, Pringles, Powerade, Gillette and Heinz.

Online groceries in Australia

Australian Food News reported in January 2015 that online groceries sales in Australia were predicted to grow, reaching $2,194 million in 2015, up 14.6 per cent from $1,914.2 million in 2014.

According to market research organisation IBISWorld, online grocery shopping has been slow to catch on within the Australian market, even as local online shopping as a whole has exploded in popularity over the past five years.

IBISWorld said the uptake of online shopping was typically driven by the improved ease of use of online stores and fast, affordable delivery options. As consumers become more adept at using online stores and gain more experience buying items online, online shopping expands.

Australian Food News also reported in September 2014 that Global retail giant Amazon could be preparing to enter the Australian grocery market, with Amazon advertising for a software development engineer in Brisbane for its AmazonFresh grocery delivery business.