Kogan.com has taken the brave step of becoming another player in the online supermarket industry with its new site Kogan Pantry. The site boasts (and consumer group Choice agrees) they offer products 40 to 50 per cent cheaper than their rivals Woolies and Coles.

In its first six hours of operation the site clocked sales of 30,000 items.

“We knew there was a lot of negative sentiment around supermarkets in Australia,,” said company founder and chief executive officer Ruslan Kogan. “We knew people didn’t like them very much, but we had no idea to what extent.”

Mr Kogan warns his online supermarket has several limitations:

  1. As yet of writing Kogans Pantry doesn’t have the range of the other two. It focuses mainly on non-perishable items. The website currently offers about a thirtieth (500-600) of the 15,000 items Coles does. But these do include major brands like Colgate, Dove, Gillette, Palmolive, Powerade, and Pringles.
  2. Delivery is offered at a fixed shipping rate of $9.99 to anywhere in Australia. According to Choice, the shipping may take between one and three weeks; as compared to 12 hour pick up or 24 hour delivery window for $2 a week by Woolies.
  3. The products may vary slightly from the ones you usually buy. A product disclaimer on the website says, “This product may be an international variation and may differ in some respects from other similar products available from local retailers in various countries around the world.”

But if you’re prepared to accept these limitations then the savings on products is substantial.

Grocery analysts have long lamented the two-horse race holding Australian consumers hostage. In a recent analysis by Roy Morgan group it was found that Coles and Woolworths control 72.5 per cent of the $82 billion grocery market in Australia. This translates into higher prices through less competition and the ability of the two giants to dictate terms to suppliers.

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