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Kogan launches Kogan Marketplace: Should you buy its shares?

I think it is fair to say that it has been a disappointing few weeks for the Ltd (ASX: KGN) share price. Since this time last month the ecommerce company’s shares have lost 18% of their value.

Shareholders will no doubt be hopeful that an announcement out of the company this morning will lead to an improvement in investor sentiment and a rebound in its share price.

What was announced?

This morning Kogan announced the launch of Kogan Marketplace, which will give customers more choice and allow businesses to reach more customers through the platform.

According to the release, many leading retailers have already signed up to participate. These include household brands like Microsoft, Breville Group Ltd (ASX: BRG), Lego, Fisher-Price, Paw Patrol, SodaStream, Gillette, Gucci, and Philips.

Lazar Monin, the director of Kogan Marketplace, believes the launch of the platform is a big positive for both retailers and consumers.

He said: “The launch of Kogan Marketplace is a win-win-win for everyone. Retailers on the Kogan Marketplace Platform will get market-leading infrastructure and the ability to offer their goods to the Kogan Community. With today’s launch, there are now over 100,000 products available to purchase on — meaning customers have more choice than ever before.”

Kogan will earn a commission on transactions that take place on the platform, but no further financial details have been provided.

Should you invest?

I suspect that the market will like this announcement. Amazon Marketplace has been a big winner for the US-based retail and tech behemoth, so if Kogan can successfully copy this side of its business model then it could be a much-needed boost to its profits in the future.

However, I’m going to wait and see how Marketplace performs over the next 12 months before considering an investment. In the meantime, I would sooner buy retail shares such as Accent Group Ltd (ASX: AX1) and Super Retail Group Ltd (ASX: SUL).

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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of Super Retail Group Limited. The Motley Fool Australia has recommended Accent Group and ltd. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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