The Kogan.Com Ltd (ASX: KGN) share price is down 3% as news came of ACCC proceedings.
Kogan.Com is an online business that was set up by Ruslan Kogan in 2006 in his parent’s garage. Kogan.Com offers a variety of products and services including Kogan Retail, Kogan Marketplace, Kogan Mobile, Kogan Internet, Kogan Insurance and Kogan Travel. The company plans to launch Kogan Super in the near future. Kogan.Com aims to offer consumers price leadership through digital efficiencies.
What’s Going On With The Kogan Share Price?
The Australian Competition and Consumer Commission (ACCC) has started proceedings against Kogan saying that it has engaged in misleading conduct regarding to a promotion done for four days in June last year.
Kogan said that the ACCC has ignored critical facts and matters which Kogan said are very relevant to assess the overall impression of the promotion by consumers who are intimately familiar with online retailing and how a discount code functions.
Kogan.Com said at all times it made clear that the price reduction applied at the time of checkout.
Kogan said: “Our aggressive discounting, quality product range, excellent delivery standards and innovative promotions sets us apart in a highly concentrated market. We will of course continue to ensure that we maintain these excellent standards for the benefit of our valued customers.
“Kogan.Com did not gain any material financial benefit as a result of the promotion. Kogan.Com does not expect any adverse change to its ongoing promotional activities as a result of this matter.”
Is Kogan.Com A Buy?
Kogan has a lot of useful attributes including network effects, a variety of services and a growth tailwind with online shopping.
However, Kogan faces a difficult time with a huge competitor like Amazon which has much stronger brand power and is willing to operate at a loss to grow its business.
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Disclaimer: Any information contained in this article is limited to general financial/investment advice only. The information has not taken into account your specific needs, goals or objectives, so please consider consulting a licenced and trusted adviser before acting on the information. Please read The Rask Group’s Financial Services Guide (FSG) for more information. This article is authorised by Owen Raszkiewicz of The Rask Group, which is a corporate authorised representative No. 1264179 of Strawman Pty Ltd (ACN: 610 908 211) (AFSL: 501 223).
At the time of publishing, Jaz does not have a financial interest in any of the companies mentioned.