Kogan’s highly-touted third-party reseller marketplace has dragged down revenue as the online retailer looks to transform its sales mix.
Kogan Marketplace opened for business in March 2019, allowing third-party vendors and distributors to sell products via Kogan’s proprietary platform similar to e-commerce rivals Amazon.com and eBay.
Since its launch, Kogan has praised Marketplace as a “transformational” business unit, which helped grow gross sales by 16.4 percent to $322.9 million in the half-year ended 31 December 2019. At the same time, revenue fell 5.3 percent to $219.5 million as a direct result of Kogan Marketplace, which only recognised the $5.5 million it made in seller fees as revenue.
The introduction of Kogan Marketplace also meant that revenue from third-party brands dropped as well as customers move their purchases from Kogan’s existing online store.
The company said in its results announcement that the success of Kogan Marketplace had led to a “period of transition” for the business, as it focuses more on growth that doesn’t require investment in inventory.
Kogan also thanked Marketplace for the 10.6 percent gross profit rise to $49.9 million for the half-year. Adjusted EBITDA also grew 35.2 percent to $18.2 million, and net profit rose 20.8 percent to $8.9 million.
Exclusive (first-party) brands are still the biggest gross profit generator for Kogan, accounting for 46 percent, followed by third-party brands with 20.8 percent. Kogan Marketplace slipped into third place for the first time this half with 11 percent of gross profit.
The company also announced that its active customer base grew 10.2 percent in the half year to 1,699,000.