Online electronics retailer Ruslan Kogan has today launched Kogan Pantry, a home delivery service for groceries, in a play that could introduce new competition for the major supermarkets.
Online retailers worldwide are starting to experiment with grocery delivery, using their expertise in data insights and lower cost structures to see if they can prise customers away from conventional supermarkets. Amazon has launched a grocery delivery service AmazonFresh and Google has Shopping Express.
Kogan Pantry is launching with over 600 products available at heavily discounted prices. It claims shoppers can save over 80% and have their groceries delivered directly to their door.
Kogan Pantry stocks a range of groceries and household items including pet food, toiletries, confectionery and cleaning products.
Founder Ruslan Kogan is using the same strategy he launched his online electronics site – cutting out the middleman to deliver supply chain efficiencies and cut costs.
David Shafer, Executive Director of Kogan.com, said the company would apply its online shopping experience to this segment.
“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-persihable groceries,” he said.
The company wants to shake up Australia’s supermarket “duopoly” and plans to take on Coles and Woolworths.
“In 1975, Coles and Woolworths accounted for just 34% of the market, by 2009 that share was up to 78%,” Shafer said.
“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.
“Through smart sourcing and efficient online retailing, Kogan.com wants to provide a better offer for Aussies, ultimately saving them money.”
The company will stock brands like Dove, Colgate, Palmolive, Pringles, Powerade, Gillette and Heinz.
The Kogan Pantry website offers products from those brands at steep discounts from prices at the major supermarkets.
US-based grocery-delivery startup Instacart announced a $US220 million Series C round at a valuation of $US2 billion earlier this month. The latest round took the total raised by Instacart to $275 million.
In what could be seen as a sign of how big investors see this space, in June Instacart raised $US44 million at a valuation of $US400 million.
Instacart launched less than three years ago but has grown to have more than 4,000 shoppers deliver groceries in about an hour to people across 15 different US cities with a delivery fee os $US5.99.
In Australia ShopWings, a Rocket Internet backed startup, launched this week offering grocery delivery in the Sydney Metro area in under two hours.