Tag: Ebay

  • The Clone Wars of Istanbul

    The Clone Wars of Istanbul

    The entrance to the Markafoni offices were vast and empty.  They were on the outskirts of Istanbul, somewhere even the cab driver could not find.   The reception desk was new, the Marcafoni logo behind it still factory polished, and the expanse of warehouse space to left of it blocked only with a few bushes.   The company’s logistics team had moved out less than two weeks before, and the all the emptiness—it felt like acres of it—was to be converted to office space for Markafoni and its subsesidiaries.  The building smelled like ambition.

    The man driving the operation was Sina Afra, a german educated 44 year old that had been managing director of Ebay Turkey.  He founded the fashion flash sales company in 2010, and it has quickly become the largest ecommerce site in Turkey, with 8 subsidiaries that operate all over the Black Sea region.  Markafoni alone sells upwards of 600,000 articles a month.

    The company is sitting on top of one of the fastest growing ecommerce markets in the world.   Online sales make up only 1.5% of the Turkish retail market, according to Mr. Afra, but he predicts that there will rise to 6 or 7 percent in the next four years.   But they are far from the only ones trying to get at the market.

    “Turkey is a country of digital Darwinism,” said Sina, referring to the intense competition for market share in each tech vertical.

    70 other flash sales sites have sprung up since 2010, and 150 groupon clones.  A visit to the Startup Factory, Istanbul’s only incubator, yielded startups cloning everything from Quirky to Talkbin.  Almost all of them are doomed to failure before ever getting out of Beta.  Almost none had an original idea.

    The reason is that despite a city of 17 million people, the angel community is smaller than Princeton’s  crew team, and about as tight knit.  “There are about 20 serious angels, and 1000 qualified startups,” said Emre Kurttepeli, founder of Galatta Business Angels and MyNet, Turkey’s largest internet property.  The numbers are indeed a bit scary for someone trying to break into the tech industry.  “There have been less than fifty major deals made,” Cem Sertoglu, on of Turkey’s leading VC’s, told me.   Even if you do get an investment—it’s expensive.  Emre estimated that a 500,000 dollar investment would buy about 30% equity stake in an angel round.  But getting an investment is hard.  “Startups will talk to anyone with money,” he said emphatically.

    At the Startup Factory, Istanbul’s leading incubator, startups expressed their frustration.   “It’s really difficult to get investors.  They’re like banks, they want a proven idea,” said Dilfer Nasir, co-founder of TinkFabrik,  a crowd-sourced manufacturing site.  TinkFabric eventually garnered a small investment from a large Turkish Multinational.  “Entrepreneurs have been taken advantage of legally and financially.  They often didn’t know their options very well.” said Tugce Ergul, founder of Turkbridge, a nonprofit dedicated to bringing investors to turkey and educating entrepreneurs, and a partner at Startup Labs.

    Things are starting to change.  Kleiner Perkins and Tiger Global have made some significant investments in B and C rounds.   Cem is graduating from investing his and his friend’s private money to founding one of the city’s first VC firms, Young Turk Ventures, which is capitalized at just under 30 million. Major exits have also jumpstarted cash flow and advertised opportunity in the city.  The money is flowing in, if only your company can get big enough.

    But the problem of the angels persists, despite the fact that conditions seem to be ideal for encouraging investing.  Term sheets generally favor the investors, and the long term capital gains tax for Turks is a whopping zero.  The problem, according to Emre, is that many Turkish investors don’t know how to value tech companies, and aren’t willing to swallow investing in companies with no revenue.

    But even the elite club of twenty angels in Istanbul tend to be risk averse; they stick to proven business models.  The costs and risks of real innovation is left to the Californians.  “Models are replicated as a matter of course in business.  For the internet business, I think the topic is a silly debate,” said Cem.  Their attitude has created a tech community with a single goal: to clone startups and sell them to foreign companies who want a foothold in the Turkish market.

    It’s a controlled risk model that stands to make a lot of money, given the explosive growth to come in Turkey.  It’s even good enough to trigger a small “reverse brain drain,” a phenomenon that everyone I interviewed mentioned with pride.   But the truly ambitious will follow easier money that gives them a little more leeway.   Until angel capital starts to really flow in Turkey, and angels come who are willing to accept a higher margin of risk, Istanbul will remain short of its potential.  It will not found a company that will become a global force, nor one that disrupts an accepted way of doing business.  And in an economy of 80 million people whose average age is 29, the potential is enormous.

    It is a good time to enter Turkey as an investor.  Over the next few years, more companies will become profitable, and a larger amount of the retail economy will move online.  Traditional business will start to feel the pinch of their encroached market share enough that they will begin to build their own bids for internet market share, most likely through acquisitions. Nonprofit organizations like Turkbridge, and thought leaders already in the market will bring in more foreign capital as the market booms.   In short, the money will come soon enough, and the profits and investors with it.  The market will mature.  What will not come by itself is a culture of risk taking.  Turkey needs a real cowboy investor, someone with enough money and guts to back the crazy ones.  Until the cowboy comes, Istanbul will find it tough to attract the best talent, or to create truly disruptive companies that do not have to fight with foreign ones for market share.

  • Ebay office by OSO Architects, Istanbul

    Ebay office by OSO Architects, Istanbul

     by retail design blog

    Ebay office by OSO Architects Istanbul Ebay office by OSO Architects, Istanbul

    The new office of “E-bay – Gitti Gidiyor” which is one of the most important players of e-trade in global and local markets is located in My Office Building in Istanbul Atasehir. The office is positioned on one floor of 2000m² with a ceiling height of 530cm.

    Ebay office by OSO Architects Istanbul 02 Ebay office by OSO Architects, Istanbul

    In line with the global trend of change in today’s modern offices, E-bay Istanbul office is planned as an “open office”. Accordingly, the inside office areas can be described by 4 functions:
    – The entrance hall & social facilities
    – Open office
    – Meeting rooms
    – Technical & service areas

    Ebay office by OSO Architects Istanbul 03 Ebay office by OSO Architects, Istanbul

    The entrance hall that will build the initial perception of visitors for the office is designed as an impressive & inviting place. The desired “inviting sense” is emphasized by the natural wood work at the floor and ceiling and by the reception desk positioned at the back. The wooden pergola representing the entrance hall and invites people to walk through the reception.

    Ebay office by OSO Architects Istanbul 04 Ebay office by OSO Architects, Istanbul

    The semi permeable pergola ensures the building of a visual relationship with the “social area” behind the entrance, whereas strengthening the building of an effective impression with this visual sophistication. “E-bay” s globally existence and the fact that you are in the Turkish office in time being is symbolized with the stilized world map and red colour Turkey perception in the left of entrance hall.

    Ebay office by OSO Architects Istanbul 05 Ebay office by OSO Architects, Istanbul

    The “social place” positioned behind the entrance hall is the only place visitors allowed to see, besides the meeting rooms. So, the place welcoming the visitors and used for celebrations of office staff in-house also includes various services like; cafe-bar, library, on-line music, TV, projection and play station games. This place gathering improvised activities such as quick meetings as well as international presentations, serves as an “agora” where the staff can entertain & interact. A terrace is related with this place which can also be used as a smoking area.

    Ebay office by OSO Architects Istanbul 06 Ebay office by OSO Architects, Istanbul

    The open space working area holds 164 staff on 1.100m2 with a maximum of 225 seats. The ceiling design of the open space -which is a challenge to overcome the typical acoustical problems encountered in such areas, reflects an irrational order of lighting instruments and acoustical panels.

    Ebay office by OSO Architects Istanbul 07 Ebay office by OSO Architects, Istanbul

    The ordered and monotonous effect of furnish plan is avoided by the chaotic and colorful design of this cavernous suspended ceiling which enables to perceive the full height of the space. The circle carpet pattern which is used in other branch offices as well is applied to reflect the company’s corporate identity.

    Ebay office by OSO Architects Istanbul 08 Ebay office by OSO Architects, Istanbul

    There are 12 meeting rooms with different sizes 7 of which are used externally. Each meeting room has a name and a digital door print symbolizing a historic place such as Boğaziçi, Efes, Nemrut, Galata, etc… The hi-tech infrastructures of the rooms are export from UK. Acoustical panels are used in ceiling design of these rooms where international meetings are held.

    Ebay office by OSO Architects Istanbul 09 Ebay office by OSO Architects, Istanbul

    Designer: OSO Architecture
    Project Team: Okan Bayık, Serhan Bayık, Ozan Bayık, Armağan Ekiz
    Floor Area: 2.000 m²
    Project Management, Mechanical Project, Electrical Project: EE Istanbul
    Construction: Decart Insaat, Ege Klima , Ozısık Elektrik
    Wood Works: Trimline
    Lighting Design: OSO Architecture
    Lighting: Demiralp Aydınlatma
    Photos: Gürkan Akay

    Ebay office by OSO Architects Istanbul 10 Ebay office by OSO Architects, Istanbul

    Ebay office by OSO Architects Istanbul 11 Ebay office by OSO Architects, Istanbul

    Ebay office by OSO Architects Istanbul 12 Ebay office by OSO Architects, Istanbul

    Ebay office by OSO Architects Istanbul 13 Ebay office by OSO Architects, Istanbul

    Ebay office by OSO Architects Istanbul

  • Why Turkey is the next raging e-commerce hotspot

    Why Turkey is the next raging e-commerce hotspot

    November 26, 2011 | Matt Marshall

    turkey investment

    Last week, I visited Turkey, and discovered what a lot of people are saying about this fascinating country: It’s the next developing hotspot for technology startups, especially for e-commerce.

    The sector is exploding: The Turkish e-commerce market hit $10.6 billion in the first six months of the year, compared to $16.3 billion for all of 2010.

    And after years of neglecting Turkey, U.S and other investors are now starting to flock there. Investment capital isn’t gushing full-bore yet, as investors assess this still-emerging market. But 2011 is the year when the spigot was first turned on.

    Until this year, Turkey looked like a backwater. Silicon Valley regularly sees private companies valued in the hundreds of millions — even billions — of dollars by venture capitalists who invest in them. But in Turkey, no private company had been valued as high as even $100M, according to Sina Afra, co-founder of one of the largest e-commerce companies in Turkey, Markafoni, and a seed-round investor.

    But in 2011, that all changed: First, eBay acquired 93 percent of Turkey’s largest auction site, GittiGidiyor — in a deal rumored to value the company at $215 million. Then South African media conglomerate Naspers acquired 70 percent of Markafoni, one of Turkey’s largest private shopping companies, in a deal valuing Markafoni at about $200 million, a value confirmed by my sources. Markafoni is also owner of Zizigo, the largest online shoe retailer in Turkey (yes, an a self-acknowledged copycat of the U.S. shoe retailer, Zappos).

    The list of “firsts” this year continues: Kleiner Perkins, one of Silicon Valley’s preeminent VC firms, made its first deal in Turkey, pumping $26 million into Trendyol, a large private shopping site. Tiger Global joined Kleiner in that investment. Intel, the chip giant, also made its first Turkey investments this year, initially backing a leading online media company Nokta, then a week later, a group shopping site Grupanya. Finally, hot social gaming site Peak Games, attracted $11.5 million from EarlyBird Venture Capital, Hummingbird Ventures and an unnamed investor. (Here’s an outdated list of Turkish start-up investments so far.)

    Naturally, there’s great excitement here, and it was palpable at a the 4iX Istanbul investors conference I attended in Istanbul last week. The event’s producers, BootCamp Ventures, said it was the largest entrepreneur-investor gathering so far. It attracted investors from a dozen countries. In e-commerce, it feels a little frothy, even. By one count, there are 200 daily deal sites in Turkey — far more than in even bigger European countries.

    Top 20 Turkish e-commerce companies. Average growth since Oct 2010 was 60%. Source: Comscore

    Why is this all coming together now? Well, it helps that Turkey has got its act together at a time when everyone else seems to be fumbling. Turkey is on pace to grow faster than 6 percent this year. It’s gotten its relatively high rate of inflation under more control, and its debt is low. It still has more work to do (mainly on the political and social fronts, and it has some weird censorship policies), but it remains relatively unscathed by the mess going on in the EU to its west — and the main progress indicators point upward (see our recent piece about Turkey’s restructuring and mobile boom).

    The prime minister Tayyip Erdogan’s swagger, underscored by his assertiveness abroad, has boosted national pride too, even as he has concerned liberals suspicious of his pro-religious agenda.

    Specifically, though, Turkey has got great fundamentals for Web start-ups. Turkey has got one of the youngest, most dynamic populations in Europe. Some 35 million people are Internet users — 12th in the world, and fifth largest in Europe, after Germany, UK, Russia and France. The median age is 28. Turks spend more time online than the average European. And they’re more interactive when they do get online: They’re the fourth most active in the world on Facebook, up from fifth a few months ago.  They’re the eighth most active on Twitter.

    Markafoni’s Afra points to two fundamental drivers of the country’s e-commerce boom:

    1) One prerequisite of e-commerce is a credit-driven economy, and Turkey has this big-time.

    Turkey has an astonishing 62 percent credit-card penetration rate among consumers. My trip was limited to Istanbul, which is a relatively modern city as far as Turkey cities go, to be sure. But almost anywhere I went, even the smallest shop-owners accepted credit cards. In the free-wheeling Grand Bazaar, I bought a pair of jeans from a small vendor, and he took my card gladly, as did a small shop where I bought a ceramic bowl. Even a small, dilapidated snack stand, where I bought a bottle of water near my hotel, welcomed credit cards — and they did so without the wince that you often get from small U.S. business owners when you pull out a credit card. Turkey’s credit penetration rate is second only in Europe to the UK. But I’ve got the feeling Turkey might overtake the UK soon. Businesses seem more eager to take cards than in the UK. I say this more anecdotally, to be sure, but it hit me when two relatively established grocery merchants in respectable north London declined to take my credit card (one of them did accept a debit payment) last week.

    2) Another e-commerce prerequisite is logistics: And here, too, Turkey has a grouping of shipping firms that can deliver products anywhere in a radius of more than 350 miles around Istanbul within 24 hours.

    Markafoni’s Afra credits this factor for of his company’s own success in penetrating countries outside of Turkey.

    The Turks have one major weakness when it comes to e-commerce, and that’s marketing, Afra told me in an interview. While Americans have experimented with behavioral targeting for at least five years, Turkey has barely started. Still, this void represents a great opportunity for investment, Afra said.

    And Turkey domestic market size is limited, and so startups need to be clever about their expansion plans — a drawback suffered by other European countries. Startups can use Turkey to test out their products and services, but the tendency is for entrepreneurs to rely on that home market, and not think big enough, several investors told me. Companies that do go global often take the route first through Eastern Europe, Russia and even Asia before going after the U.S. — a uniquely Turkish recipe, Mae Ozkan, an investor in the seed fund Golden Horn Ventures, tells me.

    Ozkan, one of the earliest seed investors in Turkey, said Turkey needs to build a vibrant ecosystem of managers, repeat entrepreneurs and other professionals before start-ups can be truly competitive with U.S-based startups, and she’s been working hard to foster that. Her work has apparently started to pay off. Other seed investors are starting to pile in: Murat Aktihanoglu, a Turkish investor now based in New York, said he refused to invest in Turkey three years ago because there was “too much country risk.” But now, he told the audience last week, he’s back and snooping around, and other U.S. investors are asking him for tips.

    [Update: Just posted about 20 more Turkish start-ups.]

    Image credits: Top: Kivanc Nis/Flickr, lower right: Trendyol.

  • EBay raises stake in Turkish site in latest deal

    EBay raises stake in Turkish site in latest deal

    By Phil Wahba

    NEW YORK | Tue Apr 12, 2011 11:05am EDT

    ebay

    NEW YORK (Reuters) – EBay Inc will buy most of the stake it does not already own in a Turkish auction website, in its latest move to strengthen its main marketplaces business.

    EBay took a minority stake in Istanbul-based GittiGidiyor in 2007 and said on Tuesday that it would buy more shares to raise its ownership to 93 percent. The companies did not disclose the terms.

    The move comes two weeks after eBay said it would buy e-commerce service provider GSI Commerce for $2 billion, a deal seen as an attempt to take on No. 1 Web retailer Amazon.com Inc.

    “EBay definitely has the acquisition machine cranked up again — and it’s focused toward marketplaces,” said BGC Partners analyst Colin Gillis.

    While its PayPal payment system has been driving eBay’s growth for years, the company is also trying to lift its more familiar marketplaces unit. The unit, a high-margin but mature business that connects online buyers and sellers, accounted for 62.5 percent of eBay’s sales last year.

    The president of the marketplaces unit left the company in September, but that has not prevented Chief Executive Officer John Donahoe from making deals while he looks for her replacement, Gillis said.

    “He needs to get the marketplaces turned around in order to be seen as a successful CEO,” Gillis said.

    EBay said that it did not expect the transaction to affect the 2011 profit outlook it gave last month and anticipated the deal would close in the second quarter, subject to regulatory approval.

    The company, which generated about 54 percent of its 2010 revenue of $9.16 billion outside the United States, has made other overseas deals. In December, it bought Germany’s brands4friends for $200 million.

    GittiGidiyor has 6.4 million registered users in Turkey and employs 150 people. At the end of 2010, eBay had 94.5 million registered users.

    Shares of eBay were down 1.6 percent at $30.69 in morning Nasdaq trading.

    (Reporting by Phil Wahba, editing by Gerald E. McCormick and Lisa Von Ahn)

    via EBay raises stake in Turkish site in latest deal | Reuters.