By James Wells
SYDNEY, NSW: Ruslan Kogan has confirmed he will be opening a business in the UK within weeks, in a move which is likely to re-open the conflict between the online retailer and its arch-rival Gerry Harvey who operates stores in Ireland.
“We will be in the UK by mid-November – we have containers on the way there at the moment and I can confirm that we have www.kogan.co.uk domain in our possession,” he told Current.com.au.
“There is no reason why Kogan can’t be successful there.”
Kogan, who was ranked last month on the BRW Young Rich List with a value of $29 million, claims that the UK market is ideal for online retailing as it has a higher engagement with online purchasing.
“It is a market representing 60 million people which is three times the size of Australia. A recent survey showed that 99 per cent of UK web users over 18 years of age have made a purchase online, which is mainly performed using a credit card. This compares to just 65 per cent in the Australian market. So the UK consumers are 50 per cent more likely to shop online.”
The UK office will be a branch of the Australian operation. While there will be warehousing and logistics in the UK, the business will be managed from the Melbourne headquarters.
While some may believe this will result in a reduced focus on the Australian market, Kogan believes it is an opportunity for local customers.
“Our buying capacity will increase and Australian customers will see the benefits.”
When asked about the inevitable competition with recent public rival Gerry Harvey, who also sells in the region with stores throughout Ireland, Kogan was diplomatic.
“We will be selling in the UK, which means we will be delivering to all countries including Northern Ireland. It is a small mass of land, so we expect to be successful over there.”
Kogan added: “Gerry represents a 40 year-old business model, while we are a 2010 business model. We don’t make business decisions to piss [Gerry Harvey] off. We have our blinkers on and we operate with the belief that there is always a better way. Will we keep doing business the same way next year, hell no. We will always find a better way to manufacture and to deliver our products.”
“Steve Jobs did not release just one model of iPhone. Bill Gates didn’t release Windows 3.1 and say that is the ultimate operating system for your computer. But then again, look at Kodak, they had too much invested in the old world and were living in denial.”