Tech entrepreneur Ruslan Kogan is hitting back at Gerry Harvey with a range of home appliances including coffee machines, microwaves and vacuum cleaners designed to expand the company’s range, putting it in direct competition with department stores.
The announcement comes just weeks after Kogan and Harvey were embroiled in a vicious war of words regarding the nature of online retail and the health of bricks and mortar department stores, with Harvey calling the online entrepreneur a “con”.
But although Kogan says in its press release the products will put the online retailer in direct competition with Harvey Norman, Ruslan himself says the company is focused on what customers demand more than any other factor.
“We’ve got our blinkers on when it comes to how we run our business. We know that we do the best research, we’ve got the best processes, and I would not make a business decision as a response to any battle or argument with anyone else.”
“The reason this decision was made is because these are products that people are getting charged too much for at the moment, and we believe we can bring in a quality product at a much better value.”
Kogan says the decision to introduce new appliances is an “expansionary” plan, with the company hoping to introduce a range of new products over the next few months. Currently it offers a bagless vacuum cleaner for $139, an espresso coffee machine for $499 and two versions of a microwave, one for $199 and one for $249.
“Even though that battle was going on, and these products are all available at Harvey Norman, this is about expansion. People buy them because people want them, and we’re going to have our blinkers on in that regard,” he says.
Kogan says the idea for distributing appliances was based on consumer need, saying there had been “heaps” of requests for such products.
“We received all these requests from people saying that there are other products people want, and so on. So we just asked and investigated what products people wanted the most, and what was in demand, and we discovered this is what people want.”
The manufacturing process won’t differ at all from current methods, Kogan says. Parts will still be sourced from individual manufacturers and then constructed and sold for cheap prices online. The only that that will change, he says, is the location of those individual parts.
“There are obviously different factories that specialise in different things, but essentially the idea behind the marketing is the same. We find the best factories out there and source products and get the best value for money.”
“You’ll notice that in our coffee machines, we know which parts are important. So we use parts from Germany for the pump, and Italian parts as well. These are all high quality.”
Moving forward, Kogan says the company is still well-set on its flagship tech products, including the expansion of IPTV in Australia. But he says the Kogan name will be made to include a wide of range for products from now onwards.
“In technology it’s all about IPTV, and we’re pursuing research and development in that area. But there are also bigger areas we can touch in home appliances and that’s one of the big areas we want to focus on.”
Gerry Harvey is on leave was not available for comment.
Patrick Stafford is a freelance journalist and a former deputy editor of SmartCompany.
