eCommerce in Turkey: Market Growth & Key Players

Turkish eCommerce Market: Key Insights

• Exhibiting promising growth, the Turkish eCommerce market revenue is expected to reach US$27.1 billion by 2027. Concurrently, the increasing online share of retail transactions, predicted to rise to 7.1% by 2027, reflects the escalating reliance on eCommerce platforms in Turkey. 

• The diversity of Turkey's eCommerce market is underscored by its sectoral composition, with Electronics leading the pack with 24.7% of the earnings. Remarkably, the Hospitality and Airlines sectors recorded substantial growth post-Covid-19 pandemic. 

• Turkish consumer engagement in eCommerce is ascending, with participation rates hitting 46% in 2022, a remarkable increase compared to the previous decade. This shift is primarily driven by competitive pricing and trust in online marketplaces.

Turkey stands as the 18th biggest eCommerce sector, forecasting revenues nearing US$23.8 billion by 2023. The estimated compound annual growth rate (CAGR) from 2023 to 2027 is set at 3.4%, pointing to a predicted sector volume of roughly US$27.1 billion by 2027. By this year's conclusion, growth in the Turkish eCommerce sector is projected at 8.9%, exceeding the expected worldwide increase of 8.7%.

The expected surge in Turkey's eCommerce realm is fueled by robust private spending, amplified by policies favoring low interest rates and a youthful, purchasing-focused populace. A jump in internet and credit card adoption, coupled with the emergence of prominent online platforms and global entities, further accelerates this momentum. Concurrently, the industry's movement towards integrated retail and platform unification bolsters upcoming growth.

eCommerce Online Share in Turkey is Projected to Rise

Moving from the larger perspective of market growth, let's delve into the eCommerce online share in Turkey, revealing more of the retail dynamics in the country. To clarify, the term “online share” describes the percentage of retail transactions carried out over the Internet – including purchases made through desktop PCs, tablets, or smartphones, whether via a website or an app – while only considering the retail of physical goods.

Up until last year, the eCommerce online share in Turkey had experienced a gradual increase since 2017. The increase in 2020 was particularly significant (reaching 6.7%), likely influenced by the Covid-19 pandemic, which boosted online shopping. Following a brief rise to 7.4% in 2021, the eCommerce online share dipped to 5.9% last year.

Generally speaking, several factors can cause a dip in eCommerce. Economic downturns or regulatory changes can directly impact consumer spending and market conditions. In addition, market saturation and return to physical retail have been common factors that have hindered growth in this context. Studying the biggest eCommerce markets, we see that the likes of Japan, the UK and Germany also experienced a decrease in eCommerce online share last year.

Looking forward, forecasts indicate a consistent upward trend for the eCommerce market share in Turkey: climbing from 6.5% in 2023 to 7.1% in 2027. This suggests an increasing dependence on eCommerce platforms for retail transactions in Turkey. However, this is still considerably less compared to a more digitally advanced country such as Germany. In the German eCommerce market, the online share stands around at 16% and is expected to rise by an average of 6.4% annually, reaching 20.5% by 2027.

Electronics Rule the eCommerce Market in Turkey 

Turkey's eCommerce story isn't just about growth rates or market shares, but also about how diverse sectors contribute to the market. The dynamic blend of various sectors not only shapes the market but reflects the evolving consumer behaviors and preferences. With these in mind, let's take a closer look at these key sectors within the Turkish eCommerce environment. 

Our data shows that the Electronics sector emerges as the largest, constituting 24.7% of Turkey's eCommerce earnings. This is trailed by Fashion, making up 20.3% of the revenue. Care Products comes in close at 16.9%, followed by Grocery at 13.7%. The remaining market share is split between DIY (11%), Furniture & Homeware (7.2%) and Hobby & Leisure (6.1%).

Online Hospitality Sector in Turkey More Than Tripled in 2022

The bounce-back from the pandemic has been instrumental in reshaping eCommerce across sectors in Turkey. The surge in online interactions in some sectors, however, is quite noteworthy. According to a report published by the Turkish Ministry of Trade, in 2022, the Hospitality sector experienced the most substantial growth in eCommerce volume in Turkey, compared to the previous year. Following the rebound from the pandemic, the Hospitality sector saw a growth of 222%, while the Airlines sector enjoyed an impressive 156% growth in the same year. The Travel, Transportation & Storage sector ranked as the third fastest-growing category, witnessing a growth of 132%.

The growth in these sectors can be attributed to several key factors. Post-pandemic recovery and vaccination progress have renewed global travel demand and restored confidence. Government initiatives, including tourism-promoting campaigns and financial support, have further boosted the sector, while Turkey's appeal as a rich historical and cultural destination has continued to attract global tourists.

Half of Internet Users in Turkey Partake in eCommerce  

While we have assessed the broad scope of the eCommerce market in Turkey and its various sectors, it's essential to recognize the underlying force driving this growth - the consumers. Let's first explore the increasing involvement of Turkish individuals in the eCommerce space and their contribution to the ever-expanding digital economy.

The findings from the Turkish Statistical Institute (TurkStat) indicate that the proportion of internet users involved in buying or selling goods or services online in Turkey has been on an upward trajectory over the years under review. In 2022, the participation rate in eCommerce activities reached a high of around 46%, marking a 36 percentage point increase in comparison to 10 years prior. A further breakdown of gender reveals that the rate of purchasing or ordering goods or services online was 49.7% for men and 42.7% for women in 2022. 

Having considered the rising participation of Turkish consumers in the eCommerce scene, we need to get behind these figures and find out why consumers are making this switch for a deeper understanding. So, let's probe into the reasons that make online marketplaces increasingly appealing to Turkish shoppers.

Pricing & Trust: Key Factors for Turkish Online Shoppers

As per a survey carried out by Istanbul Economics Research in 2022 in Turkey, 69.2% of those polled preferred shopping from online marketplaces due to the more competitive prices offered on these platforms. An additional 12.3% attributed their online shopping habits to their confidence in these marketplaces. The other reasons included a better user experience (9.5%), the guarantee of the originality of the products (5.7%) and membership of a marketplace loyalty program (3.3%).

While consumer preference for online marketplaces in Turkey is driven by factors such as competitive prices and trust, it's important to note that this trend of trust as a crucial factor extends beyond national boundaries and is common among consumers in various parts of the world. For instance, research shows that 75% of online buyers in Spain list trust as a reason for shopping online. Furthermore, when asked about barriers to online shopping, a significant share of consumers in France and Belgium mention concerns about payment security, privacy and reliability.

The preference for online marketplaces may be influenced by a myriad of factors including price and user experience, yet, it is clear that establishing trust forms the bedrock of a successful market.

Turkish eCommerce: A Lucrative Investment or a Risky Bet?

The rise of eCommerce in Turkey offers intriguing investment opportunities, yet caution is needed due to certain market dynamics.

1. Growth Potential: The Turkish eCommerce market has demonstrated strong growth over recent years, and forecasts suggest that it will continue to expand. The revenue for the sector is projected to reach US$27.1 billion by 2027, up from an estimated US$23.8 billion in 2023. This represents a promising opportunity for investors looking for growth markets.

2. Increasing Internet Penetration: The number of internet users in Turkey is on the rise, leading to increased digital literacy and usage of eCommerce platforms. As of 2022, about 46% of internet users in Turkey were participating in eCommerce activities. This number is expected to grow, further boosting the eCommerce market.

3. Young, Consumer-Oriented Population: Turkey has a relatively young population that is becoming increasingly tech-savvy and consumer-oriented. This demographic trend bodes well for the future growth of the eCommerce sector.

4. Sectoral Diversity: The Turkish eCommerce market is diverse, with different sectors contributing to its growth. The Electronics sector is currently leading, but other sectors such as Fashion and Care Products are also significant contributors. This diversity reduces dependence on a single sector and provides multiple avenues for investment.

5. Post-Covid Recovery: Certain sectors within the eCommerce market, such as Hospitality and Airlines, have experienced substantial growth post-pandemic, suggesting a resilience and adaptability that could be attractive to investors.

Potential Risks for Investors

1. Economic Challenges: Turkey is wrestling with high inflation, which could impact consumer spending power and consequently affect eCommerce growth.

2. Market Saturation: The dip in eCommerce growth last year could be indicative of market saturation or a return to physical retail, which could limit growth prospects.

3. Regulatory Environment: Any changes in regulation that affect online commerce could potentially impact the eCommerce market. It is important to stay updated with the country's digital and commerce policies.

4. Currency Fluctuations: Investors should also consider potential risks related to currency fluctuations, which could impact investment returns.

5. Trust and Payment Security: As the survey from Istanbul Economics Research in 2022 revealed, trust in online marketplaces and payment security are significant factors for Turkish consumers. Any breaches in these areas could affect consumer confidence and impact market growth.

6. Politics: The unstable political landscape in Turkey may create uncertainties that could impact the stability and growth of the eCommerce sector.

Who Are the Biggest eCommerce Players in Turkey?

In the bustling landscape of Turkish eCommerce, trendyol.com leads the pack, clocking a massive revenue of US$3.73 billion in 2022. This data, derived from the annual report and ECDB analysis, portrays a vivid picture of the country's digital marketplace, taking into account net sales after deducting returns, damages, and discounts. Trendyol.com's success doesn't stop, as they also hold a 20.2% global growth rate, with total global revenue touching US$3.86 billion. Their market presence is nearly absolute, with their share of Turkish revenue resting at 96.7%.

Following trendyol.com, hepsiburada.com, another dominant player, racked up US$769 million in 2022. They operate at full capacity in the Turkish market, while maintaining an impressive 11.1% growth rate.

Other key contributors include lcwaikiki.com and migros.com.tr, with revenues of US$613 million and US$596 million respectively, both focusing entirely on the domestic market. Amazon.com.tr also made a significant impact, pulling in US$350 million in revenue. The enormous revenues and healthy growth rates of these online stores underscore the dynamic, high-potential nature of Turkey's eCommerce market, suggesting a lucrative investment landscape.

What is Trendyol?

Trendyol is one of the largest eCommerce platforms in Turkey and has established itself as a prominent player in the country's digital marketplace.

Founded in 2010, Trendyol serves as a platform for a wide variety of goods, including clothing, accessories, electronics, and home goods, among others. With its user-friendly interface and a wide array of products, Trendyol has quickly gained popularity among Turkish consumers.

Trendyol has also branched out into private label products, and provides services such as instant delivery and mobile top-up. The company's success has been bolstered by significant investment, including from Alibaba Group, one of the world's largest eCommerce companies.

For more information on Trendyol and other top players in the Turkish eCommerce market, check out our detailed analysis.

What is Hepsiburada?

Hepsiburada.com is Turkey's leading eCommerce platform like Amazon. It offers a vast array of products, from electronics and fashion to groceries. With features such as same-day delivery and a user-friendly mobile app, Hepsiburada caters to a growing online shopping culture in the country, gaining popularity in Turkey's digital market.

What is LC Waikiki?

LC Waikiki (pronounced "el-cee vay-kee-kee") is a global fashion brand established in France in 1988, but now headquartered in Istanbul, Turkey. It is one of the largest fashion retailers in Europe and the Middle East, with over 1,000 stores in 50 countries. LC Waikiki sells a wide range of affordable clothing, shoes, and accessories for men, women, and children.

Sources: OOSGA, Turkish Ministry of Trade, TurkStat, Istanbul Economics Research, Statista, ECDB