The Kogan.com Ltd (ASX:KGN) share price had a good week last week. It leapt 12% on Thursday after the company released a June trading update. By the end of the week, it had settled lower to remain 10% up for the week. This company is squarely in the line-of-sight of Amazon.com, Inc. (NASDAQ: AMZN) as it continues its growth in the Australian market.
The question every investor should be asking is: can they survive it?
Current performance
The June release painted a picture of a company doing well and growing rapidly. Comparing the fourth quarter to date against the same period last year, the company announced significant improvements in performance.
The company now boasts over 2 million active customers. It grew gross sales by 100% and, at the same time, grew gross profit by more than 130%. This supports recent reports across buy now, pay later companies showing increases in transactions and users while in lockdown. This is despite Amazon.com already existing in the marketplace.
Kogan.com also recently announced the purchase of furniture retailer Matt Blatt. The company is planning to relaunch it purely online. Throughout the short history of Kogan.com, it has shown a great understanding of online retail. In 2016 the company purchased electronics retailer Dick Smith, successfully relaunching it as an online retailer.
On my figures, Kogan.com has increased its sales revenues by, on average, around 14% every year during the past three years. This has enabled the company to grow its earnings-per-share by around 65% a year.
Can Kogan.com compete with Amazon?
Kogan.com has a few competitive advantages. First and foremost, as a company with own-brand products, Kogan.com sells products on Amazon. Second, the company has always had a 'best price' guarantee. While Amazon is known for efficient and, often criticised, work practices, Kogan is proudly miserly. Even to the point of running a paperless office.
Moreover, just as Amazon built the high margin Amazon Web Services to subsidise the entire business. Kogan.com has also grown additional verticals in the financial and telecommunications sectors. The company has services in mobile telephone coverage, nbn services, insurance, home loans and even cars. The company is adept at partnering with industry leaders.
Foolish takeaway
At least within Australia, I can see Kogan.com holding their own against Amazon or whoever the next challenger is going to be. The company deserves a place on your watchlist at the very least. Given the rate the company is growing its sales and earnings per share, I believe this is a share price with a lot of growth ahead of it.
