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Kogan delivery firm hit by cyber attack amid COVID-19 sales surge

Kogan delivery firm hit by cyber attack amid COVID-19 sales surge

Led to loss of tracking information for thousands of items in transit

Credit: Kogan

Kogan has admitted one of its delivery companies suffered a cyber attack during one of its biggest shopping seasons since going public four years ago. 

The retailer claimed the attack on the unnamed partner resulted in the loss of tracking information for thousands of transiting items alongside other operational issues.

In an update to shareholders, Kogan claimed it used different delivery companies while the disruption was in place, adding that its own systems were not compromised.

The incident took place as Kogan experienced one of its biggest sales uplifts as the coronavirus pandemic escalated in Australia and New Zealand since early this year.

While Kogan has been careful not to name the delivery partner that was affected, one of the country's largest logistics companies, Toll, was hit by a ransomware attack at the end of January, with the company reporting on 18 March that its core services had finally returned to normal. 

As Toll's IT services were returning to normal, it emerged that another local freight and logistics firm, Henning Harders, had run into IT issues after dealing with what it referred to as an "organised attack" on its systems on 15 March.

It was during March that Kogan’s online marketplace saw its biggest gross sales on record as  Australia and New Zealand entered lock downs to curb the spread of COVID-19. 

The marketplace also gained a spike in the number of sellers, with the retailer claiming the number of new sellers waiting to go live is more than half of the number of current active sellers. 

In addition, Kogan claimed it had witnessed its largest monthly increase in active customers since listing on the Australian Securities Exchange (ASX) in 2016

Meanwhile, Kogan saw its sales in the third quarter grow by more than 30 per cent year-on-year, reporting a 50 per cent uplift in March. 

Its quarterly revenue grew by more than 6 per cent, as March alone gained a spike of 19 per cent.

Gross profit also rose by around 23 per cent during the third quarter ended 31March, with the previous month again seeing a 50 per cent rise compared to the same time last year.

The company also claimed its active customers base grew by more than 13 per cent year-on-year to 1,809,000 as at 31 March 2020, with an incremental 62,000 active customers in the month of March.

The uplifts came amid further operational disarray due to the coronavirus pandemic. During the quarter, a Kogan Travel supplier became insolvent, which necessitated Kogan crediting customers the full value of their travel purchases.

Kogan Insurance has suspended sales of landlords insurance and travel insurance due to COVID-19 impacts, while it was forced to suspend shipments of certain items to New Zealand after the government temporarily banned non-essential imports. 

“I am extremely proud of the way our team has risen to the challenge of the current environment,” Kogan.com founder & CEO Ruslan Kogan said.

“Even more so, I am proud that the portfolio of businesses our team has created over the years has made us so resilient and foundationally strong.”

Other Australia-based retailers have also gained sales increases during the pandemic. JB Hi-Fi  reported growth of 9.1 per cent growth overall in the period from 1 January to 22 March, and 8.8 per cent year-on-year in Australia during the period.

Harris Technology also saw a surge in revenue from its online IT and electronics sales, as March sales increased to $1.63  million, compared to $716,000 the year before. 


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