Kogan Feels the Heat as Customer Complaints Surge in NSW

April Davis By April Davis | 01 Mar 2019

Kogan has surpassed Apple as the most complained about retailer in NSW, according to the latest figures from the state’s consumer rights regulator.

According to NSW Fair Trading, Kogan received 70 official complaints in January, after also receiving 27 complaints in December in what the NSW Minister for Better Regulation referred to as the “Christmas retailers’ naughty list”.

The number of complaints Kogan received following its busy Christmas trade period was up from 33 complaints in January 2017 and none in January 2016. Of the complaints received, 41 were related to the quality of its goods, while others were related to delivery times, refunds and warranties.

Second place on the Fair Trading list went to Apple, who received 39 complaints over January, coming in front of collapsed travel agent Bestjet and Samsung who each had 34 and Harvey Norman with 29.

Kogan, however, has become a regular on the consumer right’s monthly list, reportedly popping up as the most complained about retailer in October and July 2018 and in December 2017, with 36, 42 and 27 complaints respectively.

In response to the surge in complaints, a Kogan spokesperson has told the media that the company isn’t too concerned about the number of problems that arose in December and January, as they only represent a small fraction of total orders.

“When you deliver 4.5 million orders for tens of thousands of people around the country, a tiny fraction experience problems and we’re always looking to improve,” the spokesperson said.

This comes after Kogan released its ‘record-breaking’ trading update for the first half of fiscal 2019, achieving a gross transaction value of $277.3 million and revenue of $231.8 million.

In a statement, the Founder and CEO of Kogan, Ruslan Kogan said the company’s ongoing investments in its inventory and customer service is reflected in the company’s recent performance.

“In the first half of financial year 2019, we have continued our significant investments in our improved customer offering. We now have a nationwide logistics network, enabling us to delight customers all over Australia with faster and more cost-efficient delivery options,” he said.

“The Kogan retail business currently represents around two percent of the Australian e-commerce market – continuing to invest in our brand, and spreading our message, is an important part of our strategy to capture market share,” he continued.

Just over half of the products sold on Kogan.com are private-label goods, while the remaining items are made up of major Australian and international brands.

One of the main issues plaguing online marketplace-style retailers in today’s digital economy is monitoring the quality of goods that are manufactured by third-party businesses. In the US, Target is looking at tackling this problem by only allowing a small number of third-party products on its site, by invite only.

While Kogan has said the company will be working with its customers to resolve any issues, the Australian Competition and Consumer Commission Chairman, Rob Sis said last week that electronics and whitegoods retailers will be a “priority” for the watchdog in 2019.

“Electrical and whitegoods products are the second most complained about industry after motor vehicles,” he said in a statement.

“We’re concerned that many manufacturers and large retailers are not complying with consumer guarantee laws.”

In Australia, NSW is the only state that publicly publishes companies that have received more than ten complaints in a single month. Businesses appearing on the register, such as Apple and Kogan, reportedly receive a case manager to resolve complaints and improve complaint-handling procedures.

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