Telecoms & IT
All a click away
E-commerce is impossible to ignore in Turkey, and not just for businesses, but in traffic on the street, where scooters branded with e-commerce company logos weave in between crawling rush hour traffic.
It is a traffic pattern that mirrors the economy itself. Multinational retailers in Turkey are mired in uncertainty over macroeconomic trends and slowed growth, while more nimble e-commerce companies take advantage of the literal and figurative agility of a mobile marketplace. What slows down bigger, brick-and-mortar shops does not slow down e-commerce services that connect smartphone owners with products on demand. However, just like driving a two-wheeled motorbike, there are risks. E-commerce is not only competitive, but also potentially subject to unexpected shocks in its way. Purchases from apps are sometimes impulsive and can easily entice customers to part with their money, but that process relies on what’s in their wallets to begin with. Companies that cannot adapt to the ebbs and flows of consumer desires and needs will suffer, just as they would in the analog marketplace.
As a middle-income country, international retailers should not expect to see the kind of big-ticket items flying off the digital shelves as they might in the US, so the name of the game is selling by volume. Deliverable lunches, last-minute gifts, and smaller, impulsive purchases, conducted at scale, are a better long-term bet than relying on more expensive selections. Those could be more vulnerable to currency shocks and credit crunches than the less volatile costs of fast-food or same-day-delivery flowers.
Turkey, however, offers a number of advantages for e-commerce companies, including the rapid growth rate of the industry itself. This signals consumers’ comfort with the practice of buying online for products they have never seen or tasted, a big psychological step.
Amazon and Alibaba are already on the scene, but are following different models. Amazon has opened its online marketplace, while Alibaba decided to purchase established Turkish e-commerce player Trendyol in 2018. Getir, Yemeksepeti, and Çiçek Sepeti are also popular marketplaces for consumer goods, meals, and gifts.
A report from market research firm Nielsen puts the overall value of e-commerce in Turkey at EUR5.7 billion, a 38% increase over 2017. That represents 5% percent of retail sales nationwide. On an individual basis, however, Turks spent EUR160 per capita in 2018. That is far lower than the global average per capita spending on e-commerce of EUR735. Nevertheless, the widespread acceptance of e-commerce should be read as good news for the industry overall and investors who dare to learn the rules of the road.
“The most popular product categories are shoes and clothes (68% of consumers buy these online), followed by consumer electronics (58%), personal care and cosmetic products (49%), and books, movies, and games. Ordering food from restaurants is also popular (47%),” according to the site ecommercenews.eu.
Growth trends are also strong for e-commerce, according to Eshopworld, an e-commerce branding company.
“There are currently 31.39 million e-commerce users in Turkey, with an additional 6.72 million users expected to be shopping online by 2021.” That figure could rise to 38.11 million by 2023, when the annual per capita spending on e-commerce is set to reach USD253.
Eshopworld also found that 76% of online sales are done on desktop, 16% on smartphones, and just 3% on tablets. The share of desktop purchases suggests that people make their shopping choices online at work or at home, and that the average shopper is wealthy enough to own such a device. A trend to watch would be more purchases by smartphone, suggesting that lower-income consumers are embracing the convenience of e-commerce as well. As that share increases, e-commerce companies may need to adjust what specific consumers they are targeting, expand or change product selection, or offer discounts to encourage repeat purchases. With per capita spending likely to remain relatively low, volume will remain the make-or-break factor in Turkey’s e-commerce sector.
ADVERTISEMENT
ADVERTISEMENT
Trending Videos
The Business Year Events - An Introduction
The Oman Business Forum
Jane McGivern, CEO of Sports Boulevard, outlines this Riyadh megaproject
You may also be interested in...

Real Estate & Construction
Qatar Investment and Innovation Conference to be held at Msheireb Downtown Doha
Msheireb Properties
SPONSORED CONTENT
Msheireb Properties

Transport
The Scramble for African Aviation
How did Turkish Airlines become the major player in African aviation in under 20 years?

Economy
Worst-Performing Currencies of 2022
As high inflation rates persist, many national currencies are struggling with devaluation in 2022.