Latest / Let's talk Marketplace / From Export Hub to Import Market: How European Brands Can Sell into Turkey #LTM167

Transcript

From Export Hub to Import Market: How European Brands Can Sell into Turkey #LTM167 · Let's talk Marketplace

• 0:00
  Local partners already have their own shops and act as the merchant of record and importer of record.
• 0:06
  They import your products and they locate your products in a warehouse, probably in Istanbul, and then do the local fulfillment.
• 0:18
  Let's Talk Marketplace.
• 0:19
  The Marketplace podcast with Ingrid Lommer and Vana Rie Dichter.
• 0:27
  Hello and welcome everyone back to let's Talk Marketplace.
• 0:30
  Great to have you again.
• 0:31
  Just me behind the mic today.
• 0:32
  Valerie couldn't make it this time, so you have to deal with me alone.
• 0:35
  But that's actually quite fitting because that topic has been grown solely on my soil, I would like to say, because as you might have heard, I was a while ago in Istanbul at the Istanbul E.
• 0:47
  Export Summit, was allowed to give a small speech there on Marketplaces in Europe.
• 0:53
  And the whole conference, it seemed, was about one topic, like how to get Turkish products to customers in Europe and in the rest of the world.
• 1:01
  That's sort of the.
• 1:03
  The main essence of it.
• 1:04
  And then just a few weeks ago at our last Marketplace Universe Connect event in Cologne, someone walks up to me and says, I saw you on Istanbul and by the way, I think the story is start starting to
• 1:15
  run the other way around.
• 1:16
  And so I was like, okay, tell me more.
• 1:19
  And then someone was Yaman, Yaman Alpata, who has joined me today.
• 1:23
  And it's really great that we could make it so fast that we get together here in the show and you tell me more about that theory posed to me.
• 1:31
  So great to have you.
• 1:31
  Jan, thanks a lot for the great introduction.
• 1:35
  Ingrid, I'm happy that you hosted me at this.
• 1:38
  You know, it's an honor to be here.
• 1:40
  I'm listening your podcast for a very long time and it's like very enlightening for me to understand the European marketplace because that's our like a core business and I'm learning every day new things thanks to your.
• 1:53
  Thanks to you and also your colleague and your hosts.
• 1:58
  So it's also like a great honor to be here and to be able to speak to your audience.
• 2:06
  That's really nice of you, thanks.
• 2:08
  Okay, if you are ever listener, then you know that we always introduce our guests a little more with our three questions or we give you the chance to introduce yourself.
• 2:17
  So let's go into that.
• 2:19
  So first question, most important one.
• 2:21
  Yaman, who are you?
• 2:22
  Tell me a bit more about yourself.
• 2:24
  Okay, firstly, I'm 40 something, 48.
• 2:31
  And you know, I have.
• 2:32
  I'm a.
• 2:32
  I'm a junior entrepreneur.
• 2:34
  I can say I established my company five years ago after I left Alibaba, but Before that, like I can switch off, I can divide my career into two.
• 2:45
  First one is like mostly I was into corporate finance and I was working for the family offices and helping them to invest into right areas, mostly into digital ones.
• 2:55
  And then in the second part of my career is basically in the E commerce.
• 2:58
  I joined first in Trend and then afterwards Hypsi Broda.
• 3:03
  While, you know, Trendio was like a very, back then, like a very scaled startup company.
• 3:08
  And after HIPS brought up in 2019, I went to Alibaba, I went to China and started working for AliExpress and mainly, mainly responsible for the global expansion into the local markets like Russia, Turkey, Europe and later on Brazil.
• 3:26
  I worked and, you know, lived in different areas of the part of the world.
• 3:31
  And then five years ago I decided to establish my own venture which is like a, you know, a similar business model that I've seen in China.
• 3:38
  It's a, you know, kind of accelerator and enabler for the local factories, manufacturers to sell in the global marketplaces.
• 3:47
  So yeah, now I'm here.
• 3:49
  Okay, right, good to know.
• 3:51
  As we already heard from what you told about yourself in your introduction, we could talk about lots of things of course, because you've got quite the marketplace route that you took in your business life so far today I,
• 4:03
  I want to talk about the Turkish side of your experiences, which there are also a lot about.
• 4:09
  I guess so.
• 4:10
  Okay.
• 4:11
  But with this broad, broad experience, what do you think you do best in your business?
• 4:17
  What is your personal usb?
• 4:20
  It's marketplace management.
• 4:22
  So my first experience in trendio was about like marketing.
• 4:27
  So I was the chief marketing officer there and then in Hepsiburada I switched to the merchandising and I led The Catego in AliExpress My main responsibility was of the like or main challenge was the supply chain.
• 4:44
  So I tapped into the supply chain part and now in my own venture I'm sitting on the other side of the table because in the first part while I was working for the marketplaces, I was managing sellers and
• 4:58
  helping them to succeed in the marketplaces.
• 5:01
  Now I'm on the other side of the table and now I'm trying to, you know, help brands and as a seller now and trying to work out the best way of the marketplace.
• 5:14
  So I've seen probably all in each and every aspect, both the marketplace side and the seller side, marketing, supply chains, fulfillment and also like merchandising.
• 5:27
  I think I have quite a bit of experience on all fronts of the marketplace business.
• 5:34
  Yeah, that you do, absolutely.
• 5:36
  Okay.
• 5:36
  And to round up introductions the traditional fun fact about yourself.
• 5:40
  Yeah, I think, you know, China has been probably the most, you know, interesting part of my life, the China experience.
• 5:49
  I lived and worked there for more than three years and went there in 2019.
• 5:54
  And then as you.
• 5:55
  As, you know, like, in 2020, the pandemic started in China.
• 6:00
  So the fun fact is that after the pandemic started, I went to China and I lived there.
• 6:06
  And basically it's quite interesting that, you know, I have been, like, quite open there and while everyone else in the world was in quarantine and.
• 6:16
  And I traveled a lot.
• 6:18
  And one day in Frankfurt, like, the police officer was checking my passport and then he was like, you know, quite, you know, surprised that, you know, I have so many stamps on my passport.
• 6:31
  And, you know, he was like, you traveled a lot, man, during the pandemic.
• 6:36
  And I, Yes, I had to.
• 6:38
  I traveled probably 15 countries during the pandemic time.
• 6:44
  It was from Brazil to Abu Dhabi, from China to Turkey, from Russia to France.
• 6:51
  I think I traveled.
• 6:53
  I should be one of the most traveled person during the pandemic time in the world.
• 6:59
  That sounds like a book title to me, Erwan.
• 7:02
  Yeah, I mean, my travels during pandemic could be really good.
• 7:06
  Okay, right.
• 7:07
  Thank you very much.
• 7:08
  Let me know a bit more about you and I guess then we can dive into today's topic, which is the Turkish market, but with a twist in a way, because as I said before, when I was at the
• 7:18
  Istanbul summit, I got that distinct feeling, okay, this.
• 7:22
  This conference is interesting for Turkish sellers who want to sell to Europe and to the US maybe, but it's not so interesting for me to get more.
• 7:31
  To get new contacts or to get more information about a market that I could bring to my audience, because I got that feeling of, okay, this is working the other way around.
• 7:40
  Sellers are looking for ways to expand in my area and are not really open for the other way around.
• 7:47
  And then you came up to me and said, yeah, actually that's not the truth anymore.
• 7:51
  Or at least things are starting to change.
• 7:54
  Maybe you can elaborate on what you said to me there.
• 7:57
  Why do you think that this reverse route is now becoming interesting for European sellers?
• 8:02
  Yeah.
• 8:03
  Okay, first of all, let me quickly, like, summarize the market size so that the listeners can grasp the size of the Turkish e commerce market.
• 8:14
  So right now, in 2025, I think according to the government statistics, the E Commerce size is around, like, more than 50 billion euros in total.
• 8:27
  So it is not a small market and it's like growing every year on average.
• 8:32
  For the last five years growing every like 30%.
• 8:35
  And the retail share of E commerce, like the share of E commerce in total retail is now close to 20%.
• 8:42
  So this indicates a growing market which is basically getting every day more and more interesting and probably will climb up more in the European size as well.
• 8:55
  Like now Turkey is almost as big as Italy and I think it will grow up quickly in the top five European markets in total.
• 9:06
  So in the next coming years.
• 9:08
  So I think having a footstep here is important for the European brands as well.
• 9:14
  So why is this happening and how is this like growing?
• 9:18
  First of all, of course the pandemic has kicked off things a lot as just everywhere in the world.
• 9:25
  But you know, it helped the Turkish e commerce ecosystem grow significantly during this time.
• 9:32
  So the whole payment system and logistics has become digitalized and the customers also become quite accustomed to E commerce during this time.
• 9:43
  We have around like 35 million people, which is getting closer to 90 million now, which is, you know, a growing population and it's young.
• 9:53
  The most important part it is that the people get quite easily attracted to E commerce and get quite easily adapted and they are all digital first, mobile first people, we can say.
• 10:08
  So compared to the European Union's seniority in terms of age and population, Turkey has a different kind of population which is young and digital first.
• 10:21
  So I think this makes it first of all structurally important and it's a good sign for European brands.
• 10:30
  Secondly, I think there are already like a lot of European and Western brands quite very popular and successful in Turkey for years operating there.
• 10:39
  And their E commerce operations are also quite stable and already quite good.
• 10:44
  So that gives us a chance for the other European brands which has been, you know, which, which are not in the physical retail.
• 10:53
  And so that the demand, the European brands already in Turkey I think gives a lot of potential for D2C brands or the brands who have like a not very physical experience in the, in Turkey.
• 11:09
  The other thing is that the, the Chinese competitors, so Turkey acted I think way faster than the European Union and they.
• 11:19
  And then the rules and regulations have changed for Timu and Shin and those and their ways has been like quite bit of difficult now and the regulations has changed so that the Chinese platforms have little chance now if
• 11:37
  they do not localize in the market.
• 11:40
  So again this is another structural thing which makes the market interesting and attractive.
• 11:48
  But the cherry on the top is I think the strong lira, which makes things interesting because it increases the, you know, the profitability or the, it makes the products cheaper from the Customer's perspective why?
• 12:07
  The manufacturing costs recently for local brands and manufacturers increased significantly.
• 12:13
  And the Turkish lira is quite bit of, you know, appreciated against US dollars and euro which makes things, especially imports cheaper for the Turkish consumers.
• 12:26
  And as they are price conscious, they are looking for alternatives.
• 12:30
  And the European or the US or you know, any other import products are getting more and more popular.
• 12:37
  Okay, I'll have to chime in here because you talk about the strong lira and of course we know that that is mostly due to what the Turkish government is doing and pushing the, pushing the lira up to hold
• 12:50
  it on value with euro.
• 12:52
  And that's fine working so far for the Turk economy obviously because the numbers as you said are really impressive.
• 12:58
  But of course how much of that development is policy and what happens if that policy changes?
• 13:06
  So first of all, the inflation is around like you know, decreased from 60, 65% in two years back now to 30%.
• 13:15
  However, especially in the past like a 12 or 6, 6 to 12 months, the decline has stabilized.
• 13:23
  So and, and of course like the war in Iran and the continuing aggression in the Russia and the Ukraine, these kind of like macroeconomic things impact the overall economics directly because of the energy prices which is like Turkey's
• 13:45
  dependent on energy imports.
• 13:48
  So this is basically, this has negative impacts on inflation.
• 13:53
  On the other side, the depreciation is less than that.
• 13:57
  So the Turkish Lira depreciated against euro in like, in euro terms around like for 15% where the inflation is 30%.
• 14:06
  So this makes, this makes the Turkish Lira appreciated.
• 14:10
  Actually even if there's the Turkish losing ground or losing value against Europe, this is completely policy.
• 14:19
  So the government is using the, the suppressed exchange rate against the inflation which worked until now at some point, but still there's a lot of way to go because 30% inflation is still structurally super high as you can
• 14:41
  imagine.
• 14:41
  And my personal opinion is that and everyone else is basically expecting this is to stay relatively strong in real terms for Turkish lira and imports will continue to stay competitive because the government policy is to basically decrease the
• 14:59
  inflation to 1 digit numbers which is like in the long term it's like it's expected to be around like 8 to 10%.
• 15:07
  But there's like a lot of way to go there.
• 15:09
  And while we are going there, I think there's no other way to increase the inflation to these terms because it's basically the inflation is being kicked off by the exchange rate.
• 15:25
  So you need to keep the exchange rate below the exchange rate, depreciation below the inflation.
• 15:31
  So It's a policy and I think in the foreseeable future, at least maybe like two to three years, this will continue.
• 15:39
  And afterwards also I think inflation and depreciation will be similar and will be balanced.
• 15:46
  So I don't expect like a huge depreciation in the Turkish lira because the government also has like a strong reserves now.
• 15:57
  So they can control it and they will continue probably the stable policy for some time more.
• 16:03
  All right.
• 16:05
  Yeah, that's an interesting lookout.
• 16:07
  Right.
• 16:10
  Okay.
• 16:11
  Yeah.
• 16:11
  So maybe let's come back from the policy to you know, the things in hand that we can actually influence as merchants and as marketplaces who are active in Turkey.
• 16:23
  So tell me a bit more about how the Turkish shop is.
• 16:26
  How do they tick?
• 16:27
  You just said they are price, price conscious, which might of course also be due to inflation of above 30%.
• 16:34
  But what are they looking for?
• 16:36
  Where are they particular and what categories or areas or price points is something that European sellers could address?
• 16:45
  Okay, first of all, we are talking of a, you know, country or like consumer panel which is not as diverse, which is quite diverse.
• 16:54
  And the income equality is not as in Europe.
• 17:00
  So there are like some significant portion of the consumers do have like a very limited of a purchasing power while the others, while there's also significant percentage which is like a, has a quite bit of good or of
• 17:15
  purchasing power.
• 17:16
  So it's not as equal.
• 17:18
  The income equality is not as good in Europe.
• 17:23
  So that's why there's also like a significant percentage of people who have significant purchasing power.
• 17:32
  So on the other side, of course like each and every Turkish shopper on E Commerce are quite value conscious.
• 17:38
  So that's a fact.
• 17:40
  On the other side, there are also quite a, you know, brand aware, I can say as well, like, you know, mostly most European brands are quite well known in, in Turkey and the customers are, you know, shopping for
• 17:53
  that, but they are looking also for the right time to purchase those products.
• 17:59
  So here of course as the, for probably in Europe, for instance, there's not much of a credit card usage.
• 18:06
  But in Turkey, credit card is the main source of, you know, purchasing.
• 18:12
  On the, on the, especially on the marketplaces, maybe more than 90% of the transactions go through the credit cards and everyone in Turkey is like a 3, 4, 5, you know, credit cards.
• 18:21
  So that's quite a bit of different than Europe.
• 18:24
  But all of the marketplaces they, you know, provide these kind of, you know, installments and credit card options already built in to the consumers.
• 18:33
  So that's, that's already comes built in to the Sellers as well.
• 18:37
  On the other side, of course like campaigns are quite bit of important to the seller, to the, to the consumers.
• 18:44
  So and when I say campaigns, yes of course, like in all and European marketplaces there are campaigns as well, but it's more campaign driven and more campaign heavy.
• 18:55
  I can say in the Turkish marketplaces you can easily see banners like 50 plus 50% discount and for like, you know, take two, one is for free or if you buy the second product, it's only one Turkish lira.
• 19:12
  So they're interesting campaigns that you would probably never seen on a European marketplace.
• 19:18
  So of course the pricing is also goes around it.
• 19:22
  So profitability and campaign analysis is quite a bit of important.
• 19:26
  But of course like these kind of campaigns drive sales and the sellers have to be actively looking for these campaigns as well.
• 19:35
  The second thing, the other things are quite, I think common.
• 19:38
  Like you know, customers are looking for ratings and reviews.
• 19:42
  Obviously in each and every other marketplace, delivery, same day delivery or next day delivery, you should provide this option.
• 19:50
  Free returns and free delivery.
• 19:52
  These are, you know, important aspects.
• 19:56
  The only thing, like for instance, if I would compare Germany and Turkey, the return rates are structurally way less compared to Germany.
• 20:05
  Like you know, on trendy or on Ipsibrada.
• 20:08
  On marketplaces I think like 10 to 15 depending of course on the category.
• 20:13
  But 10 to 15%, you know, return rates are quite normal where I would say like 25% is a high, very high return rate which is on the other side quite normal in Germany or even, you know, you would
• 20:26
  say 25% on Zalando would be, you know, exceptionally good for instance.
• 20:30
  So that's why, you know, some metrics are different from there.
• 20:35
  And also like Made in Europe I think is also like important for the customers and that also drives signature, significant CTR and also conversion on the customer's minds.
• 20:46
  So they're looking for you know, high quality products at some categories and like for electronics, DIY et cetera, or in categories like cosmetics for instance, where the customers are looking for, you know, for compatibility and for reliability, they
• 21:08
  are, are choosing the imported products.
• 21:11
  Especially made in us, Made in Europe.
• 21:14
  These are significantly driving things.
• 21:18
  So that's why sometimes for certain products, customers are looking for quality rather than the price.
• 21:26
  Interesting.
• 21:27
  Let's talk marketplaces.
• 21:28
  What are the main platforms?
• 21:30
  I mean of course trendy old comes to mind.
• 21:32
  So what are the other ones apart from trendy or.
• 21:37
  Normally there are like, you know, when we count five, six marketplaces, but I think I would name three of them.
• 21:45
  One is Trendio, the other One is Hepsibrada, which has been like a.
• 21:52
  Which has been structurally the market leaders until Alibaba.
• 21:57
  Until Alibaba acquired Trendio.
• 22:02
  Yeah.
• 22:03
  And there's Amazon.
• 22:05
  So Hypsberta is the first and most well known actually marketplace.
• 22:09
  It's been more than 25 years now.
• 22:12
  So and until probably 2000s Hepsberda has been the market leaders after Alibaba bank didn't know that.
• 22:20
  Okay, yeah, yeah.
• 22:21
  After Alibaba acquired Trendiol in 2018, if I'm not mistaken, Trendio started advertising heavily and you know, integrated all Alibaba capabilities and also like the money of course poured into the market.
• 22:35
  So it quickly grew the market share and especially in the, in the pandemic time.
• 22:41
  So after the pandemic Trendiol has been the market leader and already beaten Trends brother and the market size and number of customers.
• 22:52
  So and Amazon has always been a, you know, silent and follower and it started as probably as number six, number five, number four and now it's number three.
• 23:05
  It has never been super aggressive in the market and mostly like building and building the infrastructure silently and patiently let's say now it has been like number three and probably in the future we can see that for the
• 23:20
  number two position Epsobrata and Amazon will be fighting over time.
• 23:27
  So that's how the market has evolved over the past years.
• 23:32
  But still certain, you know, Trendial has like certain capabilities or like certain more direct leadership in certain categories like fashion because it has been structurally or like originally a fashion platform.
• 23:47
  Beauty and home products.
• 23:49
  When I say home products mostly like smaller home textile or accessories like this.
• 23:55
  So these are like number, number one by far number one categories for Trendo.
• 24:01
  On the other side, Hubsburgh is still strong in electronics and large home products like furniture and also DIY products.
• 24:10
  So we cannot say like each and every category belongs to the trendy.
• 24:14
  So Ipsibroda is like a very still strong penetration.
• 24:18
  So for instance, even like as a customer, speaking of myself, if I buy electronics I still buy from Ipsibrada.
• 24:25
  If I buy something else, I buy from Trend.
• 24:28
  You and Amazon also like, you know, increasing its penetration.
• 24:33
  I can say still electronics, books.
• 24:36
  I recently started for instance buying books from Amazon recently.
• 24:41
  So that's why it is also like claiming some leadership or gaining more traction in certain categories and you know, especially especially promoting for same day delivery and if they're FBA solutions.
• 24:58
  The beginning of our conversation was that you told me about some brands that had done the other way around and it was working quite well for them.
• 25:05
  Can you give us a few examples?
• 25:07
  How does it look like when a European brand sells to Turkey?
• 25:11
  What is the setup like?
• 25:12
  Jeff, maybe a few examples that you can give us.
• 25:16
  Sure.
• 25:17
  So I think there are different ways, of course, but let's look at first the requirements.
• 25:23
  The first and the most important requirement is like you need to have a short shop on, on the marketplace which requires you to have a Turkish tax ID or a company and then a bank account.
• 25:36
  Yeah.
• 25:36
  So these are the basic things if you want to open a shop on Trendio or Etsy Brada.
• 25:41
  So, and these are generally like not super difficult, but you know, if you want to start and test the waters, probably you don't want to establish a country, you don't want to establish a company first and start building
• 25:55
  everything from scratch.
• 25:56
  So that's why I would recommend to work local partners first and then, you know, you start your venture and test the waters with the local partners.
• 26:06
  What the local partner does for this, you know, local partners generally they already have their own shops and act as the merchant of record and importer of record.
• 26:16
  They import your products and they generally, you know, locate your products in a warehouse probably in Istanbul, and then do the local fulfillment and collect, you know, sell products, localize the products, of course, list them through integration to
• 26:32
  Trendyole, Ipspirada, other marketplaces maybe and then, you know, collect the money and then send to you.
• 26:39
  So that's a local partnership does.
• 26:41
  And generally the D2C brands, they prefer this way.
• 26:46
  If you are like a, you know, global large brand, I don't know, then generally they establish their own company, et cetera, and they start the, they start the market.
• 26:59
  But you know, this is an easy way.
• 27:01
  By the way, establishing a company in Turkey is like, maybe only takes three days and it's, it's quite easy.
• 27:07
  And getting a tax ID and bank account, et cetera, these are like easy things I can say if you, if you know, if you know the rules.
• 27:19
  However, however, it's not only about starting but continuation.
• 27:28
  But the continuation of the business is also requires some, you know, babysitting.
• 27:34
  So the tax regulations, the accounting, these kind of things that generally the European brands do not want to deeply involve these kind of things.
• 27:44
  So generally I would recommend to work with a local partner and if everything goes well, they can easily establish a company in Turkey and then take over things and then start doing this by themselves.
• 27:59
  So I think that's one of the most important aspects to start and test and then in order to be able to scale, present yourself locally in the market.
• 28:11
  Okay.
• 28:12
  Right.
• 28:13
  I guess we could go on and talk a lot more about that market.
• 28:17
  Of course, 30 minutes or 40 nearly is never enough to really touched upon a new market.
• 28:23
  But I found your insights really interesting.
• 28:26
  It was nice to just look at this market that is being overlooked a little bit from the European side, from Central European side, I should say that might that hopefully gives one or two people out there an idea
• 28:39
  on what to look for next.
• 28:40
  Maybe.
• 28:41
  Okay.
• 28:41
  Yeah.
• 28:42
  Thank you very much for joining me today.
• 28:44
  It was really great to have you.
• 28:45
  My pleasure.
• 28:46
  Thank you very much.
• 28:48
  Yeah.
• 28:49
  And if you enjoyed this episode, please follow and subscribe to let's Talk Marketplace.
• 28:52
  You know how it goes.
• 28:54
  Spotify, Apple, podcasts, YouTube, wherever and yeah.
• 28:57
  And then I hope we'll see you next next time next week.
• 28:59
  Thank you very much.
• 29:00
  Bye bye.
• 29:06
  You listen to let's Talk Marketplace, the Marketplace podcast with Ingrid Lommer and Vana Ritisto.
• 29:13
  Sam.