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Kogan disputes connection between online and traditional retail

One of Australia’s most outspoken entrepreneurs, Ruslan Kogan, has announced he’s “divorcing” the traditional retail channel, arguing economists must stop grouping online retail with traditional bricks and mortar retailers.

According to Kogan, suggestions Australia has a two-speed economy ignore major structural shifts in how locals shop, and the emergence of online retail as the third speed.

“Many economic commentators are today claiming that Australia is in a two speed economy – given the strong mining sector, and the purportedly slow retail sector.”

“But Kogan is not an ordinary retailer – we are online only, and online retail is booming. Why do economists assume that online retail and traditional retail are married – grouping them together under the one family? If we have been grouped with traditional retailers, then we want a divorce!”

Kogan said “irreconcilable differences” exist between the two channels: “they are traditional where we are innovative, they want to raise taxes when we want open competition, they want fat margins when we want to please our customers, and most importantly they are slowing down while we are speeding up!”

His comments come after reports last week indicated the internet contributed $50 billion to Australia’s GDP in 2010.

“… this number will only continue to grow. This means that the Internet economy in our country rivals that of iron ore.”

“So, the time has come to stop treating online retail as part of the same family as traditional retail – we are running at our own speed – the new third speed in what was formerly the two speed economy,” Kogan added.

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Lorna Brett

Lorna Brett

Lorna was Dynamic Business’ Social Web Editor in 2011/12. She’s a social media obsessed journalist, who has a passion for small business. Outside the 9 to 5, you’re likely to find her trawling the web for online bargains, perfecting her amateur photography skills or enjoying one too many cappucinos. You can follow her on <a href="https://twitter.com/#!/dynamicbusiness">Twitter @DynamicBusiness</a>

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