By Ben Rooney
Turkey is that rare thing; a growing European economy. Investors are starting to pay attention to the burgeoning internet economy there. So news that Amazon has taken a stake in a leading Turkish e-commerce site should come as no surprise.
The global retail giant has taken an undisclosed stake in Ciceksepeti, a Turkish ecommerce site based in Istanbul that delivers flowers and other gifts across the country.
Back in the summer Tech Europe visited Turkey to take the temperature of the start up scene there. Even in the few months since my visit, the climate has changed. With a population of 77 million (and another 3 million Turks in Germany), a growing middle class, a strong network in the urban centers and high credit-card penetration, it is becoming an increasingly attractive market.
According to Arda Kutsal, the Founder of Webrazzi, Turkey’s leading site for the burgeoning start-up scene there, and who broke the story, it is a very good deal for Amazon, and an indicator of things to come.
“We don’t have the details yet, but it is a good move by Amazon. The company is growing very fast, we see a lot of advertisements on TV for them, and they have attracted new funding recently. Hummingbird Ventures made an investment in CicekSepeti in January 2011.
For the last three years we have been waiting for Amazon to invest
“I think Amazon is using this to test the market, they want to see the market dynamics here in Turkey.
“For the last three years we have been waiting for Amazon to invest in the market here. EBay is already here.”
eBay owns approximately 93% of GittiGidiyor, Turkey’s leading online marketplace.
Mr. Kutsal expressed some surprise that Turkey had not bought a stake in Hepsiburada. “If you had asked anyone who Amazon should buy, everyone would have said Hepsiburada.com ”
Mr. Kutsal predicted there would be more.
Turkey has attracted a lot of interest from leading VCs
“This is just the first step,” he said. “We think they will be in the market fully in the next few years.”
Turkey has attracted a lot of interest from leading VCs recently. Kleiner Perkins Caufield & Byers recently took a stake in Trendyol, a Vente Privee-style flash sales site and Hummingbird Ventures was an investor in Ciceksepeti.
Jeremiah Daly of Accel Partners recently returned from Istanbul on a fact-finding mission. ”The payment systems are in place. Everyone said the logistics are good. I spent a lot of time talking to eCommerce sites. It is not like Russia where you have to build your own. They build relationships with third party providers who are cost efficient and reliable.” Furthermore Turkey has high credit card penetration, some 60%, as well as some interesting mobile banking developments coming from Turkcell, the country’s largest mobile network operator.
“There are some interesting opportunities in marketplaces, online retail and classifieds,” he said. He said that because smartphone penetration across the country is not yet at the levels of other European markets, investment opportunities in mobile were not as advanced as in other areas. “However, it is just a matter of time.”
Mr. Kutsal said that Turkey was also attractive to investors looking to use Turkey to expand either into the Central Asian Republics or into the Middle East.
Amazon,
Arda Kutsal,
Turkey
via Amazon Turkey Deal May Be First of Many – Tech Europe – WSJ.
