The Turkish eCommerce – “The Return of the Ottoman will be virtual”

In one of my last articles, I tried to summarize why I believe Turkey is one of the hottest countries in the internet space. The questions, mails, tweets and all other communication after that article was overhelming. And one of the most asked questions was about the Turkish eCommerce… This is how the story of this article started in my mind.

There are three main reasons why the Turkish eCommerce is, beside the Turkish Online Gaming Sector, the hottest piece in the hot Turkish market. First one is the incredible high credit card penetration of about 60%, making Turkey the second highest penetrated country after UK in Europe. Second reason is the local distribution speed and efficiency. Thirdly, the population is young and loves to consume. I am not getting deeper into these three structural topics as I have already wrote about them, here.

I will base my focus on the top 20 eCommerce Players as they have a good portion of the eCommerce market as well as they drive innovation. I have excluded all classifieds businesses as the bigger ones of them focus mostly on Vehicles an Real Estate.

Lets go back to 2010 October. One year ago, the top 20 eCommerce Players (ranked by Unique Visitors, Comscore Oct 2010) were split into 8 segments: Market Place (1 Player in top 20), General eTailer (1), Private Shopping Clubs (3), Consumer Electronics verticals (6), Price Comparison (5), Books (2), Ticketing (1) and Food (1). Eleven out of twenty players among the top 20 have been either Consumer Electronics Players or Price Comparison sites. The top site was GittiGidiyor (eBay Turkey). The picture below shows the relative share of each segment among the top 20 players (total).

Exactly one year later, in October 2011, the market structure has changed dramatically: Market Place (1 Player in top 20), General eTailer (1), Private Shopping Clubs (8), Consumer Electronics verticals (3), Price Comparison (3), Books (1), Ticketing (1), Food (1) and a Fashion Vertical (1). GittiGidiyor is still leading but the number of Consumer Electronics and Price Comparison players have come down to six (from 11). And, the Private Shopping segment has grown to eight players among the top 20. If you count one of the other newcomers into the Turkish eCommerce top 20, the shoes vertical zizigo, the share of fashion players among the top 20 is more than 40% (in 2010: 16.0%).

GittiGidiyor (eBay Turkey) is doing a great job in keeping the leadership. Hepsiburada has a strong Year-over-Year (YoY) growth and comes close to the neck of GittiGidiyor as never before. Number three is Markafoni. The biggest growth rates in in the last years come from Private Shopping Players, especially Vipdükkan, Limango and Markafoni. One of the major lovebrands of the Turkish eCommerce, Yemeksepeti, continued to stay among the top 20 with a tremendous growth rate of 51% (which is the 7th highest growth rate, and faster than the top 2 players). Same with Biletix which managed to reach 55% growth rate.

The big winner in the Turkish eCommerce is Private Shopping as a segment. Turkey is one of those countries accepting and loving this flash sales offering. The competition is tough. The Private Shopping sites discovered TV ads and started to reach out for new customer segments. And we might face some surprises as Vipdükkan is growing like hell (but from low levels) and has the chance to become the number three in this segment and pushing Trendyol down to number four. Hepsiburada is the big old lady of the Turkish eTailers. If we would do a ranking according the revenues, they would clearly lead the eCommerce. Yes, they are big but are growing in an impressive way: 43% is very respectable for a big player. Vatan is leading the Consumer Electronics Segment. Teknosa and Hizlial are following. And we have six newcomers among the top 20: Five Private Shopping Players and the shoes vertical zizigo. Vipdükkan made the highest new entry.

And here are the top 20 of the Turkish eCommerce. The average growth since Oct 2010 was 60% (Visitors, top 20). All data is from comscore.

My view for the next 12 months:
– The number of Private Shopping Players will get smaller, maybe downsized to 3-5 players among the top 20.
– We will have to expect more Fashion verticals among the top 20.
– Gittigidiyor and Hepsiburada will have a hard fight for the pole position. They will not be alone.
– Turkish eCommerce companies, following Yemeksepeti and Markafoni, will start expanding outside of Turkey. The return of the Ottoman will be virtual.
– Everything can happen anytime. Madness? This is Turkey!