Cease-and-desist stoush as Kogan gatecrashes Click Frenzy: Kogan fires back

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Kogan.com.au has been issued with a cease-and-desist letter after it hosted a Click Frenzy sale despite not being part of the official event.

But Ruslan Kogan, the founder of the online electronics retailer Kogan, has fired back, questioning why the event has to be organised and hosted by a single body.

“No one company should own Christmas Sales, Boxing Day Sales, or Online Sales events – these events are not any individual person’s or company’s for the taking, they are ‘owned’ by the shopping community in general,” he said.

Click Frenzy managing director Grant Arnott tells SmartCompany Kogan’s attitude has come out of the blue. He says Kogan expressed a keen interest in participating in the event last year, and says the retailer’s stance now is hypocritical.

“I find Kogan’s misguided assertions about Click Frenzy absurd and baffling,” Arnott says.

Kogan however tells SmartCompany that while he applauds anyone who champions online retail in Australia, he never had any intention of signing on to an event run where another company takes a fee.

“Last year, they approached us and said they wanted to promote a massive online sales day in Australia. Naturally, being big advocates of online retail, we said yes. But then the next email detailed something like a $30,000 fee to be involved. We laughed and said ‘good luck’.”

Click Frenzy owns the trademark over its name, and hosts a yearly online sales event in the lead-up to Christmas. Its business model works with retailers paying it to advertise on the official Click Frenzy website. It then promotes and raises the profile of the Click Frenzy event, in turn benefiting the retailers who participate. The event is loosely inspired by America’s Cyber Monday sales, though it does differ in being run through a central agency. Click Frenzy launched this time last year. It began this year at 7pm last night, and will continue until 7pm this evening.

Arnott says it’s clear to him there’s huge demand for this kind of event. Last year, its website crashed due to the volume of traffic. This was bad news for advertisers, who paid $1 million in total to be involved (it costs $1500 to set up a basic listing, but most advertisers pay much more than that).

This year, more than 12 hours into the event, website traffic is strong.

“We are ecstatic with the results from last night and set for a massive second half today,” Arnott says.

“At the same point last year, I wanted to crawl into a hole, so for the whole team at Click Frenzy and our technology and marketing partners, this is a great feeling.

But Arnott’s had more to deal with than the launch, telling SmartCompany he became aware of Kogan launching a Click Frenzy sale yesterday, 12 hours ahead of the official launch. Kogan is not one of the participating retailers in Click Frenzy.

“As of Tuesday morning, he had a page on his website featuring the words ‘Click Frenzy’, which we have trademarked.

“We want to protect our intellectual property.”

Click Frenzy has served Kogan with a cease-and-desist letter, and Arnott says it will pursue legal action, including claiming for damages if it has basis to do so.

Kogan however says that like Boxing Day sales developed organically because retailers had excess stock after Christmas, so online sales days should develop.

“Of course there was some business out there who ran the first Boxing Day sale. But that doesn’t mean they get a cut of every subsequent sale.

“Ultimately, having someone else in the middle means the consumer gets ripped off. They loose that margin.”

“The thing that I applaud [Click Frenzy] for is that they have been speaking up about big events for online sales in Australia. There should be such events. But they’ve been making these comments while in the background, it’s about them building a business out of it. But there shouldn’t be another business in this.”

“We’re hoping to convince other retailers to put forward their best offers independently.”

In a written statement last night, Kogan took aim at the legitimacy of the Click Frenzy trademark.

“We congratulate Click Frenzy on achieving a registered trademark over the words ‘Click Frenzy’. While this is certainly a laudable achievement, we do question whether the registration of this trademark grants a monopoly to Click Frenzy over online frenzies, clicking or any other form of sale activity,” he wrote.

“In our view, no one person or company should be able to monopolise either frenzies or clicking. It is a basic right of online shoppers to click frenziedly, when seeking to take advantage of a hot online deal, and all online retailers should be free to offer awesome deals at any time of their choosing. 

“If Click Frenzy is truly an organisation devoted to establishing a day of awesome online sales, then they should be happy that Kogan is offering great deals right now. Unfortunately, the fact that Click Frenzy is upset with Kogan’s offers seems to imply that Click Frenzy cares more about profiting from an online sales day than it does about ensuring shoppers get the best deals possible.”

Responding to the statement, Arnott isn’t impressed.

“I find it quite offensive and absurd that Kogan, after being caught out using our trademarked term, now turns around and says we shouldn’t have the right to own that brand. I think it’s sour grapes.”

“We aren’t out to stifle sales activity or completion. We welcome that. You can call your sales event whatever you like. And if you’re a participant of Click Frenzy, we grant people the right to use that term to promote the event.

“When someone else is trying to leverage that brand equity and violate our intellectual property rights, we’re going to act on that.”

At 7am this morning, Click Frenzy had had half a million unique visitors to its site contributing 2.5 million page views, resulting in over one million clicks onto retailer sites from Click Frenzy.

The top categories at the half-way mark were women’s fashion, electrical goods and toys. The retailers who got the most clicks were Big W, Myer and Bonds.

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Myriam Robin is a reporter for SmartCompany and its sister site LeadingCompany. She has degrees in economics, international studies and journalism. She likes writing about businesses taking risks and doing new things.

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