I recently wrote an article for Internet Retailing magazine on the Turkish retail market and why its development is a key opportunity for both local and international retailers, stimulated by the steady increase in internet connectivity across the country.
That article is below in its entirety, and the Internet Retailing website can be found here: http://www.internetretailing.net/
Turkey’s retail industry is a barometer for the country’s general economic development. Turkey had a heavily statist economy until 1984 when limitations on private sector involvement were eased, creating a wave of rapid market-based economic and social growth. Today, Turkey has the 15th highest GDP in the world and as one of the largest Western Eurasian countries, Turkey is a significant area of opportunity.
Turkey’s bid to accede to the European Union has been in progress since 1987 and has been a key motivator for political, social and financial development in the country. While Turkey is still some way from qualifying to join the European Union, its ongoing determination to align its policies with the required standards highlights the country as a strategic growth sector worthy of early investment by keen-eyed retailers. Rapid expansion in tourism over the last decade has also helped to drive the retail industry, and encouraged adoption of Western retail trends and methods.
Many Oracle Retail customers have successfully used Turkey as a foothold for international expansion, and have been able to create a presence there from scratch with enthusiastic results from customers. Many of these retailers have been grocers, but a strong fashion manufacturing presence and a solid leadership in consumer technology manufacturing means that the country is a prime growth market for other retailers looking to create a presence with low overhead costs.
Later this year I will be visiting Turkey to explore the development in the retail industry in more detail. I will be updating the blog with more insights when I return.
Focus on Turkey by Sarah Taylor (originally printed in Internet Retailing, January issue)
The Turkish market has offered plenty of opportunity over the last decade for those organisations willing to invest in the region. International grocery retailers Metro, Carrefour and Tesco have been present for some time, whilst more recently the entrance of DSGi, Kesa and Best Buy have signified the growing importance of the market to consumer electronics retailers.
E-commerce in the region has been growing rapidly and has seen positive and consistent value growth through the recent economic challenges. Although it is not fully established, it does offer good opportunity.
Whilst most mid-to large retail organisations have their own websites, these are still mainly used for promotional activities rather than as an alternative sales channel. Commercial transactions online tend to be restricted to high-value items and services such as flights or electrical goods, which seems at odds with the rise of internet banking.
One reason for this may be the traditionally low penetration rate of internet access in Turkey. However, this is picking up with the number of internet users in Turkey now over 26 million* out of a population of just under 75 million. With this in mind, there is a great opportunity for those ready to take advantage. Discounting is the latest major retail trend in Turkey and if retailers can also bring the benefits of discounting online, there is tremendous opportunity.
One retailer already ahead of this curve is Migros Türk and its online shopping service, Kangurum, which currently hosts 25,000 products online. In fact, through its various channels, Migros Türk serves an estimated 160 million customers – statistics that can’t have passed unnoticed by the large international retailers seizing the opportunities to grow in the market.
Turkey is a fertile ground for retail with a growing young population. It can only be a matter of time before we see the increase in consumer spending moving online. *Source: Daily News & Economic Review, Turkey’s English Daily – Anatolia News Agency