Turkey E-commerce Market - Growth, Trends, COVID-19 Impact, and Forecasts (2022 - 2027)

Turkey E-commerce Market - Growth, Trends, COVID-19 Impact, and Forecasts (2022 - 2027)

Key Highlights

• The growing penetration of the internet in Turkey is expected to support the market growth. The internet users have increased in the country, while household access to the internet has also seen a growth in users. According to the Turkish Statistical Institute, the rate of internet users reached 82.6% in 2021 compared to 79% in the previous year. This is due to an increase in the spending of people aging between 16 and 74. The internet penetration also increased in the household sector from 90% in 2020 to 92% in 2021, further supporting the demand for the studied market.
• An increase in online shopping has also surged, which can be seen from the growth in the percentage of people using the internet to buy goods has reached 44.3% in 2021 from 36.5% in 2020. The low pricing, ultrafast delivery, discount coupons, COD, loyalty points, and easy return features adopted by the players in the region have also influenced the buying pattern of men in 2021. According to the Turkish Statistical Institute, 70.7% of people purchased goods online in the first three months of 2021, including clothing, shoes, and accessories, while 40.8% used the internet to order food online.
• The rapid increase in mobile traffic from B2C e-commerce websites is being witnessed in the country. The convenience of using the Mobile phone for purchasing goods for eCommerce websites has supported the demand for the market. Additionally, E-commerce transactions amount to approximately 18% of trade in Turkey, out of which cell phone applications made nearly 70% of the transactions.
• However, increasing cybercrime incidents on e-commerce platforms are expected to hinder market growth. Also, the E-commerce companies generally store customers' bank account and credit card details, mailing addresses, Email addresses, passwords, and usernames, exposing them to cybersecurity attacks.
• COVID-19 has given an impetus to E-commerce across Turkey, encouraging people to make use of contactless and timely delivery in the comfort of their homes. Also, the future of electronic groceries is bright in the country, especially with the increase in Turkey's online shopping users due to Covid-19. COVID 19 has changed the purchasing behavior and buying patterns of customers.

Key Market TrendsFashion Industry to have a Significant Growth in the Country

• Fashion and fashion Apparel products are some of the most targeted product categories on Turkey’s e-commerce website. Additionally, according to the Turkish Statistical Institute and the ministry of trade, apparel exports from Turkey increased by 14.71% Y-o-Y in January-February 2022. Turkey has exported apparel worth USD 3.074 billion in the first two months of 2022, compared to USD 2.680 billion in 2021.
• The Turkish fashion industry seems dominated by multi-category retailers, online marketplaces, and private shopping sites. Renowned online stores in Turkey are Hepsiburada, Gitti Gidiyor, Trendyol and Araba.com. Also, the online store is cost-effective and has a low monthly cost of these websites compared to opening an actual store. These factors contributed to passing on the low-price benefits to the customer.
• Many brands also focus on extending their business in other regions as a business expansion. For instance, in May 2022, Trendyol, a Turkish eCommerce firm, opened its first office outside of its home country in Berlin. The company is also focusing on opening offices in Amsterdam and London by 2023 and will be hiring 200 employees in Berlin. Additionally, Trendyol will focus on fashion, with the expectation of offering more categories In Germany.
• In addition, the E-commerce industry is experiencing growth in the forecast period. For instance, according to eticaret.gov.tr, the percentage of e-commerce retail in Turkey reached 20.4% in December 2021, while in January 2020, it was around 11.7%.

Advancements in Technology to Propel Market Growth

• The Increasing internet penetration and the growing use of smartphones are expected to support the growth of the e-commerce sector in the country. Change in taste of consumers towards online buying as the smartphones and Internet has become more widely used. According to the survey done by the Turkish Statistical Institute, 92% of the households had access to the Internet from home in 2021, which was an increase from 90.7% in 2020.
• Additionally, according to eticaret.gov.tr., the Ecommerce sales value from Household & small appliances and appeals & footwear accessories in the first half of 2021 were the top contributor to e-commerce sales in Turkey, followed by electronics, supermarket, and food. Household & small appliances sales were around TRY 22.4 billion while appeals & footwear accessories sales were at TRY 10.9 billion.
• With the growing use of smartphones and tablets in the country, online retail eCommerce continues to grow. Thanks to technological advancements such as 5G wifi, branded shopping apps, and social shopping, people can shop on their phones.
• Several e-commerce companies provide virtual try-on solutions primarily for the Beauty and Retail markets. Also, other features such as push notification for change in price and stock has made it convenient for customers to get information with just a click. All of this will support the growth of the eCommerce market in Turkey.

Competitive Landscape

• August 2021: Turkey-based Trendyol has raised EUR 1.28 billion in new funding round. Turkey-based Trendyol has been valued at EUR 14 billion. This makes the e-commerce platform one of Europe's 30+ decacorns and the first one in Turkey. The new financing was co-led by high-profile global investors, including SoftBank Vision Fund 2, General Atlantic, Princeville Capital and sovereign wealth funds, ADQ, and Qatar Investment Authority.

Additional Benefits:

• The market estimate (ME) sheet in Excel format
• 3 months of analyst support

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