The Kogan.com Ltd (ASX: KGN) share price is going around in circles, range bound between highs of $13 and lows of around $9.
Why is the Kogan share price struggling?
eCommerce is not a hot space right now
ASX-listed e-commerce shares have struggled to outperform for the past few months, weighed down by broader themes such as the cycling of elevated sales and supply chain issues.
Kogan peers such as Redbubble Ltd (ASX: RBL) and Mydeal.Com Au Ltd (ASX: MYD) have also struggled this year, posting major share price declines between February and June.
After a sharp selloff in the first half, most of these e-commerce shares, including the Kogan share price, have been trading sideways ever since.
Cycling of elevated sales
Growth expectations for e-commerce players might have moderated following a strong COVID-19 driven performance in FY20.
This morning, Redbubble for example, provided a first-quarter trading update that flagged a significant year-on-year decline across key financial metrics.
For the first quarter ended 30 September, gross transaction values declined 21% on the prior corresponding period, marketplace revenue fell 28% and gross profit was down 34%.
This might not necessarily be the case for Kogan, as its FY21 full-year results said that its July unaudited gross sales increased 5.1% compared to July 2020.
Despite a solid FY21 performance and upbeat outlook, the Kogan share price still tanked 15% on the day of its results announcement.
Headwinds for tech shares
Another factor weighing on the Kogan share price could be the concerns surrounding higher bond yields and interest rates.
Tech shares tumbled earlier on in the week following a jump in US 10-year Treasury yields.
Treasury yields have rallied in recent weeks amid increasing concerns that the US Federal Reserve will hike interest rates in late 2022.
Richly valued and high growth sectors are most vulnerable to rising interest rates, which make future cash flows appear less valuable in the present.
