Maverick entrepreneur Ruslan Kogan has fired another salvo in his ongoing war of words with retail rival Gerry Harvey, declaring his company would aim to achieve ten times the $1 billion in ten years online sales market which the Harvey Norman chief executive set his company this week.
Harvey publicly stated this week that he had instructed his fledgling online team to turn over $100 million of revenue in the next three years, with the aim of hitting the $1 billion mark within a decade. Harvey Norman has previously been known for its antipathy towards the online medium, despite the decades-long international success of online retailers like Amazon.
In a blog post this afternoon, Kogan welcomed Harvey Norman’s entrance into the online market, but within paragraphs threw down the gauntlet, revealing he had instructed his team to achieve ten times $1 billion in the next ten years.
“We welcome Harvey Norman to the online space and we look forward to some healthy competition, which will ultimately benefit all Australians through greater choice,” Kogan said. “That is why, today, I have responded to Gerry by asking my team to do outdo Harvey Norman 10-fold — that means $10 billion in sales online within 10 years!” The latest figures available about Kogan Technologies show that the company made $12.2 million over the 2009/10 financial year, and had 22 employees.
In his blog, Kogan accused Harvey of having been a long-time internet skeptic, with a “long history of talking down online businesses”. He said Harvey’s change of mind was unexpected and would bring some healthy competition to the online industry; but added Harvey Norman would face the rules of Darwin’s theory of natural selection in the online environment.
“We are currently a small player in comparison to the likes of Harvey Norman,” he said. “But we do know one thing, as Charles Darwin said: It is not the strongest of the species that survive, nor the most intelligent, but the one most responsive to change.”
Despite the online plans, Harvey again noted this week that he still feared an online branch of Harvey Norman could have an impact on the profits of the franchise’s 173 stores around the country — a fear which competitor Kogan said was well-founded. “We think that retailers who try to do both bricks and mortar as well as online will end up stuck in the middle,” the entrepreneur wrote today. “Either they will have to cannibalise their physical sales by discounting their prices online, or […] their online prices won’t be competitive against the pure online players.”
Picking on his rival, Kogan wrote his strategy was simple and aimed at hitting new markets. “As for Kogan, we’ll get to our target by a pretty simple strategy. In the coming months and years, we will be expanding into new product lines and across new geographies,” he said.
Kogan concluded he was confident the online market was not big enough for Harvey Norman and pure online retailers to coexist. “We are confident that pure online players will continue to be able to offer the best value, both now and in the future,” he said. “This is why we have accepted Gerry’s challenge, and why we are happy to have Mr Harvey as an online competitor”.
Image credit: Kogan
Simple. Close 75% of HN Stores keeping only those in key strategic locations. Remodel the entire lot as ‘show rooms’. Then push volume through the online store with one distribution center per state for quick same day / next day delivery or pickups.
eh ? HN is all franchisee based. The superstores have several franchisees in them.. They can’t shut down stores on the scale you suggest without destroying ‘confidence’ in the HN brand via word of mouth.
Ruslan Kogan has always been good for a laugh, but this is just silly, saying Kogan will be a $10 billion company in 10 years is one thing, actually getting there is another. I’m actually a fan of his products and business model, but using obviously trollish antics like this to get publicity is wrong. And he disrespects the name of Charles Darwin by using it to further his petty agenda.. lol
Ruslan Kogan is Australia’s Donald Trump.. sans the casinos and terrible hair. What is the world coming to!?
Haha – I came to the comments to write ‘Koglan is Australia’s answer to Donald Trump’ and you’d beaten me to it. Curses!
Lol.. glad I’m not alone in making the association
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