Online retailer Kogan.com is adding electricity and gas supply to its portfolio of consumer services.
The ASX-listed firm, which has already branched out from its core retail operations into mobile communications, home internet, insurance, super and travel, says it is partnering with NZ-owned Powershop to set up Kogan Energy.
“We generate some of the cleanest and greenest energy in Australia,” said Ed McManus, chief executive of Powershop owner Meridian Energy.
“Together with Kogan, we believe we can make a real difference to the energy space by delivering simple, great value, energy offerings.”
Kogan says it aims to make electricity and gas more affordable through “digital efficiency” when the service launches by the end of the calendar year.
Shares in Kogan initially gained at the open but were 2.1 per cent lower at $5.02 at 1300 AEST against the backdrop of a lower overall market.
Royal Bank of Canada analyst Tim Piper said Kogan’s strategy was to partner with service providers who have already invested heavily in infrastructure, providing the partner a low cost channel to distribute services to its 1.5 million active customers and nine million subscribers.
Mr Piper said Kogan’s energy tilt and the impending launch of credit card, car and NZ mobile phone units, created a wider opportunity to increase a potential customer’s basket value.
“These service verticals continue to be valuable low cost earnings streams for the overall earnings mix, contributing (about) 18 per cent of total gross profit in 2019,” Mr Piper said.
Shares in Kogan have climbed more than 45 per cent so far in 2019.